Based on his Dec. 30 Otherviews column, Blaming the victims, Edward Wasserman wants people to believe that insurance claims don't exist, that only the stock market causes insurance prices to rise (but not to fall) and that huge increases in medical-malpractice costs are all about bad doctors and not at all about some lawyers.

When costs rise, so does insurance. Floridians who experienced Hurricane Andrew 10 years ago know this well. Now medical-malpractice insurers are experiencing a disaster of their own, and the American Medical Association has named Florida one of 12 states facing a crisis. Across the country, the average jury award for medical malpractice more than tripled between 1994 and 2000, from $1.1 million to $3.5 million, and insurers now pay out $1.53 for every $1 they earn in premiums, a loss of $3 billion in 2001 alone.

Lawsuits against doctors, hospitals and nursing homes increase the cost of healthcare for Floridians. The frequency of million-dollar-plus medical-malpractice awards in Florida is well above the national average and 63 percent higher than in California, which passed medical-liability reform legislation in 1975.

California's reforms, which preserve the rights of those who have been truly injured, have stood the test of time and now serve as a model for state and federal reforms. Lawyers who have made careers out of suing doctors and hospitals are afraid of change that has become more likely now that a surgeon has become U.S. Senate majority leader.

Wasserman tries to shift the blame for medical-malpractice problems away from lawyers, claiming that bad investments in the stock market are the reason why insurers are raising rates. Yet only 17 percent of insurer-invested assets are stocks and fully two-thirds are bonds.

In fact, while overall investment returns have declined in recent years, insurers will still earn about $35 billion in 2002, money that will be used to keep premiums lower than they would otherwise be. Most of the industry's recent decline in investment returns is due to the record 12 rate cuts by the Federal Reserve that have brought yields to 40-year lows.

Blaming insurance rates solely on the stock market is an agenda for deflecting the heat from lawyers who sue doctors for a living. That is an agenda that Florida and the nation can no longer afford.

ROBERT P. HARTWIG

Senior Vice President

and Chief Economist,
Insurance Information Institute

New York, N.Y.