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Harry Potter wrote on Nov 4, 2009 11:17 AM:
The American Association for Justice the trial lawyers lobby group has just released an astounding statistic: medical malpractice insurance companies average profits are higher than those of 99 percent of Fortune 500 companies.
As the nation remains mired in a debate over health care reform and how to keep down the costs of expanding coverage, AAJ is trying to point out that Republicans claims that medical malpractice lawsuits are one of the big cost drivers is completely misleading. In fact, though malpractice claims and so-called defensive medicine does account for a small percentage of unnecessary costs, medical errors and the astronomical profits of malpractice insurers appear to be a bigger part of the problem.
AAJs report released today finds that the average profit of medical malpractice insurance companies is higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period; and malpractice insurers have seen their profit margins range from 5.9 percent to 74.8 percent, with an average of 31.2 percent. The report also finds that malpractice insurers have publicly overestimated their losses and underestimated their profits in an attempt to suggest the insurance business and medical practice in general faces a crisis that must be resolved by so-called tort reform i.e., making it harder for patients to sue and to collect damages for their injuries.
Oh yeah, sounds like tort reform is a real problem. A quick check with FactCheck shows that their other divisions are making about 6 percent, not the 2 percent claimed by the letter writer. Anyone who has ever worked in any large corporation knows that real profit is manipulated to be as low as possible to avoid taxes.
I'm having a hard time feeling the same sympathy for the poor insurance companies as the letter writer apparently has.
What's next, a letter telling us how bad off Ameren/CIPS has it? "