DOCTORS AND POLITICIAN MISS MOST OBVIOUS SOLUTIONS TO MEDICAL MALPRACTICE “CRISIS”:
THE FORGOTTEN MEMO OF SOLUTIONS.
Herb Denenberg Column for May 05, 2003
Doctors and politicians in search of the magic bullet to solve the so-called medical malpractice crisis have focused on a pie-in-the-sky solution that won’t fly politically or constitutionally – the $250,000 cap on pain and suffering. That would take a constitutional amendment, which requires something close to a political consensus. That political consensus will never happen due to the determined and effective opposition of the trial lawyers and most consumer organizations, and the difficulties inherent in passing any constitutional amendment at the state or federal level. What’s worse, the public, even if half-informed, would reject the concept, of a cap on damages. It is obviously unfair and off the wall.
In the process of primary focus on a solution that will never happen these interest groups are missing the more obvious, the more practical and the more immediate solutions that may produce bigger and quicker premium reductions. To find these solutions all the doctors and politicians would have to do is to read a memo dated February 28, 2002, entitled “Suggestions to Effect Immediate Premium Savings for Health Care Providers.” The memo was written by John H. Reed, then the Director of the Cat Fund (now an attorney in private practice in Sellingsgrove, Pennsylvania), and his Deputy Director, Robert W. Waeger.
Here are a few of their recommendations, which should be given immediate and serious consideration, but which have been ignored by doctors and politicians and legislators and by the insurance commissioner and the insurance industry (the latter two groups being in perpetual hibernation when it comes to new ideas or basic reforms of the present system).
LET STATE PROVIDE MEDICAL MALPRACTICE COVERAGE THROUGH CAT FUND. Now doctors have to go to commercial insurers for the first $500,000 of coverage (the excess over that $500,000 primary limit is now provided by the CAT Fund).
The commercial insurance companies don’t want to write the business. Fine. They should have no complaints when the state of Pennsylvania fills the vacuum. As the memo in question indicates, the Cat Fund could provide the first $500,000 coverage for 40 percent less than the commercial insurance industry. That would be possible, as the state through the Cat Fund, would have a lower expense ratio. They would not have to pay commissions to agents or support a major marketing structure. The Cat Fund would not have to earn and pay a profit to shareholders. It would not have to pay taxes. It would not have to support the corporate structure that goes with any commercial insurance operation. The CAT Fund pays out in claims 99 cents on the dollar of collected premiums; commercial insurers, in contrast, pay out 60 to 65 cents on the dollar in claims, with 35 to 40 cents going for marketing, commissions, profits, etc.
CUT REQUIREMENT OF $500,000 IN PRIMARY COVERAGE TO $200,000. Now each doctor must buy $500,000 in commercial insurance and the rest if sold by the state-operated CAT fund. If this $500,000 requirement were cut to $200,000, the Reed-Waeger Memo estimates premiums would be reduced by at least 25 to 35 percent. This would also increase the market for malpractice as commercial insurers would have to shoulder less risk, and that in turn would improve the competitive environment. It would also make it easier for doctors to use self-insurance, risk retention groups (RRGs), fronted captives and other alternatives to commercial insurance (see next reform on RRGs). This change could come about without adoption of the first recommended change.
PROMOTE USE OF RRGs. The Risk Retention Group is a self-insurance device, which involves doctors banding together in non-profit groups to self-insure their coverage. It is a min-insurance company. The reduction of the primary requirement from $500,000 to $200,000, as suggested above, would make this approach easier to undertake. Although not mentioned in the MEMO, Reed recommends that a solvency fund be created to cover RRGs for medical malpractice. This was a recommendation he did make in testifying before the U.S. House Committee on Energy and Commerce on February 10, 2003. Now RRGs are not so covered, and this means that doctors would have a dangerous exposure if the RRG would go under. With commercial insurance companies, there is a solvency fund back-up and if this were extended to RRGs, they would become more popular and could make a larger contribution to the solution of any problems in obtaining reasonably priced medical malpractice insurance. The MEMO estimates that some specialists could cut their premiums by 60 to70 percent with RRGs.
COMPRESS RATE SCHEDULE. Now there is incredible variation in premiums between so-called high-risk specialists and lower-risk categories of doctors. Premiums are so tailored to each category of doctors that the insurance function of spreading risk does not work as effectively as it might. Compressing rate schedules means that the differences between the highest and lowest risk categories would be reduced, thus lowering the burden on the higher risk specialties and spreading risk more evenly. The Memo says, if the lowest risk groups paid $1,000 more, the higher risks groups could be cut by up to l/3rd.
CONCLUSION. The MEMO has a good summary of what these recommended changes might do: “What now seems to be a looming crisis can be averted. All of the above options … will immediately reduce malpractice premiums to health care providers. Most importantly, they can accomplish that result without taking money from taxpayers, without triggering the additional expense of borrowing, without burdening future generations of health care providers, and without having to bar the door of the courthouse to those individuals having legitimate claims.” (c)2003 Herbert S. Denenberg All Rights Reserved.
Herb Denenberg is a former Pennsylvania Insurance Commissioner, professor at the Wharton School, and Pennsylvania Public Utility Commissioner. He is a member of the Institute of Medicine of the National Academy of Sciences and is a board member of the Center for Safe Medication Use. He is an adjunct professor of insurance and information science and technology at Cabrini College. You can write Herb at POB 7301,St. Davids, PA e-mail him at hdenenberg@aol.com or reach him at his two Web sites: thedenenbergreport.org or denenbergsdump.org
Friday, August 17, 2007
23281 Louis J Sheehan
DOCTORS AND POLITICIAN MISS MOST OBVIOUS SOLUTIONS TO MEDICAL MALPRACTICE “CRISIS”:
THE FORGOTTEN MEMO OF SOLUTIONS.
Herb Denenberg Column for May 05, 2003
Doctors and politicians in search of the magic bullet to solve the so-called medical malpractice crisis have focused on a pie-in-the-sky solution that won’t fly politically or constitutionally – the $250,000 cap on pain and suffering. That would take a constitutional amendment, which requires something close to a political consensus. That political consensus will never happen due to the determined and effective opposition of the trial lawyers and most consumer organizations, and the difficulties inherent in passing any constitutional amendment at the state or federal level. What’s worse, the public, even if half-informed, would reject the concept, of a cap on damages. It is obviously unfair and off the wall.
In the process of primary focus on a solution that will never happen these interest groups are missing the more obvious, the more practical and the more immediate solutions that may produce bigger and quicker premium reductions. To find these solutions all the doctors and politicians would have to do is to read a memo dated February 28, 2002, entitled “Suggestions to Effect Immediate Premium Savings for Health Care Providers.” The memo was written by John H. Reed, then the Director of the Cat Fund (now an attorney in private practice in Sellingsgrove, Pennsylvania), and his Deputy Director, Robert W. Waeger.
Here are a few of their recommendations, which should be given immediate and serious consideration, but which have been ignored by doctors and politicians and legislators and by the insurance commissioner and the insurance industry (the latter two groups being in perpetual hibernation when it comes to new ideas or basic reforms of the present system).
LET STATE PROVIDE MEDICAL MALPRACTICE COVERAGE THROUGH CAT FUND. Now doctors have to go to commercial insurers for the first $500,000 of coverage (the excess over that $500,000 primary limit is now provided by the CAT Fund).
The commercial insurance companies don’t want to write the business. Fine. They should have no complaints when the state of Pennsylvania fills the vacuum. As the memo in question indicates, the Cat Fund could provide the first $500,000 coverage for 40 percent less than the commercial insurance industry. That would be possible, as the state through the Cat Fund, would have a lower expense ratio. They would not have to pay commissions to agents or support a major marketing structure. The Cat Fund would not have to earn and pay a profit to shareholders. It would not have to pay taxes. It would not have to support the corporate structure that goes with any commercial insurance operation. The CAT Fund pays out in claims 99 cents on the dollar of collected premiums; commercial insurers, in contrast, pay out 60 to 65 cents on the dollar in claims, with 35 to 40 cents going for marketing, commissions, profits, etc.
CUT REQUIREMENT OF $500,000 IN PRIMARY COVERAGE TO $200,000. Now each doctor must buy $500,000 in commercial insurance and the rest if sold by the state-operated CAT fund. If this $500,000 requirement were cut to $200,000, the Reed-Waeger Memo estimates premiums would be reduced by at least 25 to 35 percent. This would also increase the market for malpractice as commercial insurers would have to shoulder less risk, and that in turn would improve the competitive environment. It would also make it easier for doctors to use self-insurance, risk retention groups (RRGs), fronted captives and other alternatives to commercial insurance (see next reform on RRGs). This change could come about without adoption of the first recommended change.
PROMOTE USE OF RRGs. The Risk Retention Group is a self-insurance device, which involves doctors banding together in non-profit groups to self-insure their coverage. It is a min-insurance company. The reduction of the primary requirement from $500,000 to $200,000, as suggested above, would make this approach easier to undertake. Although not mentioned in the MEMO, Reed recommends that a solvency fund be created to cover RRGs for medical malpractice. This was a recommendation he did make in testifying before the U.S. House Committee on Energy and Commerce on February 10, 2003. Now RRGs are not so covered, and this means that doctors would have a dangerous exposure if the RRG would go under. With commercial insurance companies, there is a solvency fund back-up and if this were extended to RRGs, they would become more popular and could make a larger contribution to the solution of any problems in obtaining reasonably priced medical malpractice insurance. The MEMO estimates that some specialists could cut their premiums by 60 to70 percent with RRGs.
COMPRESS RATE SCHEDULE. Now there is incredible variation in premiums between so-called high-risk specialists and lower-risk categories of doctors. Premiums are so tailored to each category of doctors that the insurance function of spreading risk does not work as effectively as it might. Compressing rate schedules means that the differences between the highest and lowest risk categories would be reduced, thus lowering the burden on the higher risk specialties and spreading risk more evenly. The Memo says, if the lowest risk groups paid $1,000 more, the higher risks groups could be cut by up to l/3rd.
CONCLUSION. The MEMO has a good summary of what these recommended changes might do: “What now seems to be a looming crisis can be averted. All of the above options … will immediately reduce malpractice premiums to health care providers. Most importantly, they can accomplish that result without taking money from taxpayers, without triggering the additional expense of borrowing, without burdening future generations of health care providers, and without having to bar the door of the courthouse to those individuals having legitimate claims.” (c)2003 Herbert S. Denenberg All Rights Reserved.
Herb Denenberg is a former Pennsylvania Insurance Commissioner, professor at the Wharton School, and Pennsylvania Public Utility Commissioner. He is a member of the Institute of Medicine of the National Academy of Sciences and is a board member of the Center for Safe Medication Use. He is an adjunct professor of insurance and information science and technology at Cabrini College. You can write Herb at POB 7301,St. Davids, PA e-mail him at hdenenberg@aol.com or reach him at his two Web sites: thedenenbergreport.org or denenbergsdump.org
THE FORGOTTEN MEMO OF SOLUTIONS.
Herb Denenberg Column for May 05, 2003
Doctors and politicians in search of the magic bullet to solve the so-called medical malpractice crisis have focused on a pie-in-the-sky solution that won’t fly politically or constitutionally – the $250,000 cap on pain and suffering. That would take a constitutional amendment, which requires something close to a political consensus. That political consensus will never happen due to the determined and effective opposition of the trial lawyers and most consumer organizations, and the difficulties inherent in passing any constitutional amendment at the state or federal level. What’s worse, the public, even if half-informed, would reject the concept, of a cap on damages. It is obviously unfair and off the wall.
In the process of primary focus on a solution that will never happen these interest groups are missing the more obvious, the more practical and the more immediate solutions that may produce bigger and quicker premium reductions. To find these solutions all the doctors and politicians would have to do is to read a memo dated February 28, 2002, entitled “Suggestions to Effect Immediate Premium Savings for Health Care Providers.” The memo was written by John H. Reed, then the Director of the Cat Fund (now an attorney in private practice in Sellingsgrove, Pennsylvania), and his Deputy Director, Robert W. Waeger.
Here are a few of their recommendations, which should be given immediate and serious consideration, but which have been ignored by doctors and politicians and legislators and by the insurance commissioner and the insurance industry (the latter two groups being in perpetual hibernation when it comes to new ideas or basic reforms of the present system).
LET STATE PROVIDE MEDICAL MALPRACTICE COVERAGE THROUGH CAT FUND. Now doctors have to go to commercial insurers for the first $500,000 of coverage (the excess over that $500,000 primary limit is now provided by the CAT Fund).
The commercial insurance companies don’t want to write the business. Fine. They should have no complaints when the state of Pennsylvania fills the vacuum. As the memo in question indicates, the Cat Fund could provide the first $500,000 coverage for 40 percent less than the commercial insurance industry. That would be possible, as the state through the Cat Fund, would have a lower expense ratio. They would not have to pay commissions to agents or support a major marketing structure. The Cat Fund would not have to earn and pay a profit to shareholders. It would not have to pay taxes. It would not have to support the corporate structure that goes with any commercial insurance operation. The CAT Fund pays out in claims 99 cents on the dollar of collected premiums; commercial insurers, in contrast, pay out 60 to 65 cents on the dollar in claims, with 35 to 40 cents going for marketing, commissions, profits, etc.
CUT REQUIREMENT OF $500,000 IN PRIMARY COVERAGE TO $200,000. Now each doctor must buy $500,000 in commercial insurance and the rest if sold by the state-operated CAT fund. If this $500,000 requirement were cut to $200,000, the Reed-Waeger Memo estimates premiums would be reduced by at least 25 to 35 percent. This would also increase the market for malpractice as commercial insurers would have to shoulder less risk, and that in turn would improve the competitive environment. It would also make it easier for doctors to use self-insurance, risk retention groups (RRGs), fronted captives and other alternatives to commercial insurance (see next reform on RRGs). This change could come about without adoption of the first recommended change.
PROMOTE USE OF RRGs. The Risk Retention Group is a self-insurance device, which involves doctors banding together in non-profit groups to self-insure their coverage. It is a min-insurance company. The reduction of the primary requirement from $500,000 to $200,000, as suggested above, would make this approach easier to undertake. Although not mentioned in the MEMO, Reed recommends that a solvency fund be created to cover RRGs for medical malpractice. This was a recommendation he did make in testifying before the U.S. House Committee on Energy and Commerce on February 10, 2003. Now RRGs are not so covered, and this means that doctors would have a dangerous exposure if the RRG would go under. With commercial insurance companies, there is a solvency fund back-up and if this were extended to RRGs, they would become more popular and could make a larger contribution to the solution of any problems in obtaining reasonably priced medical malpractice insurance. The MEMO estimates that some specialists could cut their premiums by 60 to70 percent with RRGs.
COMPRESS RATE SCHEDULE. Now there is incredible variation in premiums between so-called high-risk specialists and lower-risk categories of doctors. Premiums are so tailored to each category of doctors that the insurance function of spreading risk does not work as effectively as it might. Compressing rate schedules means that the differences between the highest and lowest risk categories would be reduced, thus lowering the burden on the higher risk specialties and spreading risk more evenly. The Memo says, if the lowest risk groups paid $1,000 more, the higher risks groups could be cut by up to l/3rd.
CONCLUSION. The MEMO has a good summary of what these recommended changes might do: “What now seems to be a looming crisis can be averted. All of the above options … will immediately reduce malpractice premiums to health care providers. Most importantly, they can accomplish that result without taking money from taxpayers, without triggering the additional expense of borrowing, without burdening future generations of health care providers, and without having to bar the door of the courthouse to those individuals having legitimate claims.” (c)2003 Herbert S. Denenberg All Rights Reserved.
Herb Denenberg is a former Pennsylvania Insurance Commissioner, professor at the Wharton School, and Pennsylvania Public Utility Commissioner. He is a member of the Institute of Medicine of the National Academy of Sciences and is a board member of the Center for Safe Medication Use. He is an adjunct professor of insurance and information science and technology at Cabrini College. You can write Herb at POB 7301,St. Davids, PA e-mail him at hdenenberg@aol.com or reach him at his two Web sites: thedenenbergreport.org or denenbergsdump.org
23281 Louis J Sheehan
DOCTORS AND POLITICIAN MISS MOST OBVIOUS SOLUTIONS TO MEDICAL MALPRACTICE “CRISIS”:
THE FORGOTTEN MEMO OF SOLUTIONS.
Herb Denenberg Column for May 05, 2003
Doctors and politicians in search of the magic bullet to solve the so-called medical malpractice crisis have focused on a pie-in-the-sky solution that won’t fly politically or constitutionally – the $250,000 cap on pain and suffering. That would take a constitutional amendment, which requires something close to a political consensus. That political consensus will never happen due to the determined and effective opposition of the trial lawyers and most consumer organizations, and the difficulties inherent in passing any constitutional amendment at the state or federal level. What’s worse, the public, even if half-informed, would reject the concept, of a cap on damages. It is obviously unfair and off the wall.
In the process of primary focus on a solution that will never happen these interest groups are missing the more obvious, the more practical and the more immediate solutions that may produce bigger and quicker premium reductions. To find these solutions all the doctors and politicians would have to do is to read a memo dated February 28, 2002, entitled “Suggestions to Effect Immediate Premium Savings for Health Care Providers.” The memo was written by John H. Reed, then the Director of the Cat Fund (now an attorney in private practice in Sellingsgrove, Pennsylvania), and his Deputy Director, Robert W. Waeger.
Here are a few of their recommendations, which should be given immediate and serious consideration, but which have been ignored by doctors and politicians and legislators and by the insurance commissioner and the insurance industry (the latter two groups being in perpetual hibernation when it comes to new ideas or basic reforms of the present system).
LET STATE PROVIDE MEDICAL MALPRACTICE COVERAGE THROUGH CAT FUND. Now doctors have to go to commercial insurers for the first $500,000 of coverage (the excess over that $500,000 primary limit is now provided by the CAT Fund).
The commercial insurance companies don’t want to write the business. Fine. They should have no complaints when the state of Pennsylvania fills the vacuum. As the memo in question indicates, the Cat Fund could provide the first $500,000 coverage for 40 percent less than the commercial insurance industry. That would be possible, as the state through the Cat Fund, would have a lower expense ratio. They would not have to pay commissions to agents or support a major marketing structure. The Cat Fund would not have to earn and pay a profit to shareholders. It would not have to pay taxes. It would not have to support the corporate structure that goes with any commercial insurance operation. The CAT Fund pays out in claims 99 cents on the dollar of collected premiums; commercial insurers, in contrast, pay out 60 to 65 cents on the dollar in claims, with 35 to 40 cents going for marketing, commissions, profits, etc.
CUT REQUIREMENT OF $500,000 IN PRIMARY COVERAGE TO $200,000. Now each doctor must buy $500,000 in commercial insurance and the rest if sold by the state-operated CAT fund. If this $500,000 requirement were cut to $200,000, the Reed-Waeger Memo estimates premiums would be reduced by at least 25 to 35 percent. This would also increase the market for malpractice as commercial insurers would have to shoulder less risk, and that in turn would improve the competitive environment. It would also make it easier for doctors to use self-insurance, risk retention groups (RRGs), fronted captives and other alternatives to commercial insurance (see next reform on RRGs). This change could come about without adoption of the first recommended change.
PROMOTE USE OF RRGs. The Risk Retention Group is a self-insurance device, which involves doctors banding together in non-profit groups to self-insure their coverage. It is a min-insurance company. The reduction of the primary requirement from $500,000 to $200,000, as suggested above, would make this approach easier to undertake. Although not mentioned in the MEMO, Reed recommends that a solvency fund be created to cover RRGs for medical malpractice. This was a recommendation he did make in testifying before the U.S. House Committee on Energy and Commerce on February 10, 2003. Now RRGs are not so covered, and this means that doctors would have a dangerous exposure if the RRG would go under. With commercial insurance companies, there is a solvency fund back-up and if this were extended to RRGs, they would become more popular and could make a larger contribution to the solution of any problems in obtaining reasonably priced medical malpractice insurance. The MEMO estimates that some specialists could cut their premiums by 60 to70 percent with RRGs.
COMPRESS RATE SCHEDULE. Now there is incredible variation in premiums between so-called high-risk specialists and lower-risk categories of doctors. Premiums are so tailored to each category of doctors that the insurance function of spreading risk does not work as effectively as it might. Compressing rate schedules means that the differences between the highest and lowest risk categories would be reduced, thus lowering the burden on the higher risk specialties and spreading risk more evenly. The Memo says, if the lowest risk groups paid $1,000 more, the higher risks groups could be cut by up to l/3rd.
CONCLUSION. The MEMO has a good summary of what these recommended changes might do: “What now seems to be a looming crisis can be averted. All of the above options … will immediately reduce malpractice premiums to health care providers. Most importantly, they can accomplish that result without taking money from taxpayers, without triggering the additional expense of borrowing, without burdening future generations of health care providers, and without having to bar the door of the courthouse to those individuals having legitimate claims.” (c)2003 Herbert S. Denenberg All Rights Reserved.
Herb Denenberg is a former Pennsylvania Insurance Commissioner, professor at the Wharton School, and Pennsylvania Public Utility Commissioner. He is a member of the Institute of Medicine of the National Academy of Sciences and is a board member of the Center for Safe Medication Use. He is an adjunct professor of insurance and information science and technology at Cabrini College. You can write Herb at POB 7301,St. Davids, PA e-mail him at hdenenberg@aol.com or reach him at his two Web sites: thedenenbergreport.org or denenbergsdump.org
THE FORGOTTEN MEMO OF SOLUTIONS.
Herb Denenberg Column for May 05, 2003
Doctors and politicians in search of the magic bullet to solve the so-called medical malpractice crisis have focused on a pie-in-the-sky solution that won’t fly politically or constitutionally – the $250,000 cap on pain and suffering. That would take a constitutional amendment, which requires something close to a political consensus. That political consensus will never happen due to the determined and effective opposition of the trial lawyers and most consumer organizations, and the difficulties inherent in passing any constitutional amendment at the state or federal level. What’s worse, the public, even if half-informed, would reject the concept, of a cap on damages. It is obviously unfair and off the wall.
In the process of primary focus on a solution that will never happen these interest groups are missing the more obvious, the more practical and the more immediate solutions that may produce bigger and quicker premium reductions. To find these solutions all the doctors and politicians would have to do is to read a memo dated February 28, 2002, entitled “Suggestions to Effect Immediate Premium Savings for Health Care Providers.” The memo was written by John H. Reed, then the Director of the Cat Fund (now an attorney in private practice in Sellingsgrove, Pennsylvania), and his Deputy Director, Robert W. Waeger.
Here are a few of their recommendations, which should be given immediate and serious consideration, but which have been ignored by doctors and politicians and legislators and by the insurance commissioner and the insurance industry (the latter two groups being in perpetual hibernation when it comes to new ideas or basic reforms of the present system).
LET STATE PROVIDE MEDICAL MALPRACTICE COVERAGE THROUGH CAT FUND. Now doctors have to go to commercial insurers for the first $500,000 of coverage (the excess over that $500,000 primary limit is now provided by the CAT Fund).
The commercial insurance companies don’t want to write the business. Fine. They should have no complaints when the state of Pennsylvania fills the vacuum. As the memo in question indicates, the Cat Fund could provide the first $500,000 coverage for 40 percent less than the commercial insurance industry. That would be possible, as the state through the Cat Fund, would have a lower expense ratio. They would not have to pay commissions to agents or support a major marketing structure. The Cat Fund would not have to earn and pay a profit to shareholders. It would not have to pay taxes. It would not have to support the corporate structure that goes with any commercial insurance operation. The CAT Fund pays out in claims 99 cents on the dollar of collected premiums; commercial insurers, in contrast, pay out 60 to 65 cents on the dollar in claims, with 35 to 40 cents going for marketing, commissions, profits, etc.
CUT REQUIREMENT OF $500,000 IN PRIMARY COVERAGE TO $200,000. Now each doctor must buy $500,000 in commercial insurance and the rest if sold by the state-operated CAT fund. If this $500,000 requirement were cut to $200,000, the Reed-Waeger Memo estimates premiums would be reduced by at least 25 to 35 percent. This would also increase the market for malpractice as commercial insurers would have to shoulder less risk, and that in turn would improve the competitive environment. It would also make it easier for doctors to use self-insurance, risk retention groups (RRGs), fronted captives and other alternatives to commercial insurance (see next reform on RRGs). This change could come about without adoption of the first recommended change.
PROMOTE USE OF RRGs. The Risk Retention Group is a self-insurance device, which involves doctors banding together in non-profit groups to self-insure their coverage. It is a min-insurance company. The reduction of the primary requirement from $500,000 to $200,000, as suggested above, would make this approach easier to undertake. Although not mentioned in the MEMO, Reed recommends that a solvency fund be created to cover RRGs for medical malpractice. This was a recommendation he did make in testifying before the U.S. House Committee on Energy and Commerce on February 10, 2003. Now RRGs are not so covered, and this means that doctors would have a dangerous exposure if the RRG would go under. With commercial insurance companies, there is a solvency fund back-up and if this were extended to RRGs, they would become more popular and could make a larger contribution to the solution of any problems in obtaining reasonably priced medical malpractice insurance. The MEMO estimates that some specialists could cut their premiums by 60 to70 percent with RRGs.
COMPRESS RATE SCHEDULE. Now there is incredible variation in premiums between so-called high-risk specialists and lower-risk categories of doctors. Premiums are so tailored to each category of doctors that the insurance function of spreading risk does not work as effectively as it might. Compressing rate schedules means that the differences between the highest and lowest risk categories would be reduced, thus lowering the burden on the higher risk specialties and spreading risk more evenly. The Memo says, if the lowest risk groups paid $1,000 more, the higher risks groups could be cut by up to l/3rd.
CONCLUSION. The MEMO has a good summary of what these recommended changes might do: “What now seems to be a looming crisis can be averted. All of the above options … will immediately reduce malpractice premiums to health care providers. Most importantly, they can accomplish that result without taking money from taxpayers, without triggering the additional expense of borrowing, without burdening future generations of health care providers, and without having to bar the door of the courthouse to those individuals having legitimate claims.” (c)2003 Herbert S. Denenberg All Rights Reserved.
Herb Denenberg is a former Pennsylvania Insurance Commissioner, professor at the Wharton School, and Pennsylvania Public Utility Commissioner. He is a member of the Institute of Medicine of the National Academy of Sciences and is a board member of the Center for Safe Medication Use. He is an adjunct professor of insurance and information science and technology at Cabrini College. You can write Herb at POB 7301,St. Davids, PA e-mail him at hdenenberg@aol.com or reach him at his two Web sites: thedenenbergreport.org or denenbergsdump.org
23289 Louis J Sheehan
23289 Louis J Sheehan
After the defeat of the Union forces at Bull Run on July 21, 1861, Lincoln summoned McClellan from West Virginia. He traveled by special train on the main Pennsylvania line from Wheeling through Pittsburgh, Philadelphia, and Baltimore, and on to Washington, D.C., and was overwhelmed by enthusiastic crowds that met his train along the way.
On July 26, the day he reached the capital, McClellan was appointed commander of the Military Division of the Potomac, the main Union force responsible for the defense of Washington. On August 20, several military units in Virginia were consolidated into his department and he immediately formed the Army of the Potomac, with himself as its first commander. He reveled in his newly acquired power and fame:
I find myself in a new and strange position here—Presdt, Cabinet, Genl Scott & all deferring to me—by some strange operation of magic I seem to have become the power of the land. ... I almost think that were I to win some small success now I could become Dictator or anything else that might please me—but nothing of that kind would please me—therefore I won't be Dictator. Admirable self-denial!
– George B. McClellan, letter to Ellen, July 26, 1861
During the summer and fall, McClellan brought a high degree of organization to his new army, and greatly improved its morale by his frequent trips to review and encourage his units. It was a remarkable achievement, in which he came to personify the Army of the Potomac and reaped the adulation of his men.He created defenses for Washington that were almost impregnable, consisting of 48 forts and strong points, with 480 guns manned by 7,200 artillerists.[24] But this was also a time of tension in the high command, as he continued to quarrel frequently with the government and the general-in-chief, Lt. Gen. Scott, on matters of strategy. McClellan rejected the tenets of Scott's Anaconda Plan, favoring instead an overwhelming grand battle, in the Napoleonic style. He proposed that his army should be expanded to 273,000 men and 600 guns and "crush the rebels in one campaign." He favored a war that would impose little impact on civilian populations, and one that would require no emancipation of slaves.
McClellan's antipathy to emancipation would add to the pressure on him, as he received bitter criticism from Radical Republicans in the government. He viewed slavery as an institution recognized in the Constitution, and entitled to federal protection wherever it existed. His writings after the war were typical of many Northerners: "I confess to a prejudice in favor of my own race, & can't learn to like the odor of either Billy goats or niggers." But in November 1861, he wrote to his wife, "I will, if successful, throw my sword onto the scale to force an improvement in the condition of those poor blacks." He later wrote that had it been his place to arrange the terms of peace, he would have insisted on gradual emancipation, guarding the rights of both slaves and masters, as part of any settlement. He made no secret of his opposition to the radical Republicans. He told Ellen, "I will not fight for the abolitionists." And this placed him at an obvious handicap because many politicians running the government believed that he was attempting to implement the policies of the opposition party.
The immediate problem with McClellan's war strategy was that he was convinced the Confederates were ready to attack him with overwhelming numbers. On August 8, believing that the Confederates had over 100,000 troops facing him (in contrast to the 35,000 they actually deployed at Bull Run a few weeks earlier), he declared a state of emergency in the capital. By August 19, he perceived 150,000 enemy to his front. McClellan's future campaigns would be strongly influenced by the overblown enemy strength estimates of his secret service chief, detective Allan Pinkerton, but in August 1861, these estimates were entirely McClellan's own. The net result was a level of extreme caution that would sap the initiative of McClellan's army and cause great condemnation by his government. Historian and biographer Stephen W. Sears has called McClellan's actions "essentially sound" if he had been as outnumbered as he believed, but McClellan in fact rarely had less than a two-to-one advantage over his opponents in 1861 and 1862. That fall, for example, Confederate forces ranged from 35,000 to 60,000, whereas the Army of the Potomac in September numbered 122,000 men; in early December 170,000; by year end, 192,000.
The dispute with Scott would become very personal. Scott (along with many in the War Department) was outraged that McClellan refused to divulge any details about his strategic planning, or even mundane details such as troop strengths and dispositions. (For his part, McClellan claimed not to trust anyone in the administration to keep his plans secret from the press, and thus the enemy.) During disagreements about defensive forces on the Potomac River, McClellan wrote to his wife on August 10 in a manner that would characterize some of his more private correspondence: "Genl Scott is the great obstacle—he will not comprehend the danger & is either a traitor, or an incompetent. I have to fight my way against him. Scott became so disillusioned over his relationship with the young general that he offered his resignation to President Lincoln, who initially refused to accept it. Rumors traveled through the capital that McClellan might resign, or instigate a military coup, if Scott were not removed. Lincoln's Cabinet met on October 18 and agreed to accept Scott's resignation for "reasons of health."
After the defeat of the Union forces at Bull Run on July 21, 1861, Lincoln summoned McClellan from West Virginia. He traveled by special train on the main Pennsylvania line from Wheeling through Pittsburgh, Philadelphia, and Baltimore, and on to Washington, D.C., and was overwhelmed by enthusiastic crowds that met his train along the way.
On July 26, the day he reached the capital, McClellan was appointed commander of the Military Division of the Potomac, the main Union force responsible for the defense of Washington. On August 20, several military units in Virginia were consolidated into his department and he immediately formed the Army of the Potomac, with himself as its first commander. He reveled in his newly acquired power and fame:
I find myself in a new and strange position here—Presdt, Cabinet, Genl Scott & all deferring to me—by some strange operation of magic I seem to have become the power of the land. ... I almost think that were I to win some small success now I could become Dictator or anything else that might please me—but nothing of that kind would please me—therefore I won't be Dictator. Admirable self-denial!
– George B. McClellan, letter to Ellen, July 26, 1861
During the summer and fall, McClellan brought a high degree of organization to his new army, and greatly improved its morale by his frequent trips to review and encourage his units. It was a remarkable achievement, in which he came to personify the Army of the Potomac and reaped the adulation of his men.He created defenses for Washington that were almost impregnable, consisting of 48 forts and strong points, with 480 guns manned by 7,200 artillerists.[24] But this was also a time of tension in the high command, as he continued to quarrel frequently with the government and the general-in-chief, Lt. Gen. Scott, on matters of strategy. McClellan rejected the tenets of Scott's Anaconda Plan, favoring instead an overwhelming grand battle, in the Napoleonic style. He proposed that his army should be expanded to 273,000 men and 600 guns and "crush the rebels in one campaign." He favored a war that would impose little impact on civilian populations, and one that would require no emancipation of slaves.
McClellan's antipathy to emancipation would add to the pressure on him, as he received bitter criticism from Radical Republicans in the government. He viewed slavery as an institution recognized in the Constitution, and entitled to federal protection wherever it existed. His writings after the war were typical of many Northerners: "I confess to a prejudice in favor of my own race, & can't learn to like the odor of either Billy goats or niggers." But in November 1861, he wrote to his wife, "I will, if successful, throw my sword onto the scale to force an improvement in the condition of those poor blacks." He later wrote that had it been his place to arrange the terms of peace, he would have insisted on gradual emancipation, guarding the rights of both slaves and masters, as part of any settlement. He made no secret of his opposition to the radical Republicans. He told Ellen, "I will not fight for the abolitionists." And this placed him at an obvious handicap because many politicians running the government believed that he was attempting to implement the policies of the opposition party.
The immediate problem with McClellan's war strategy was that he was convinced the Confederates were ready to attack him with overwhelming numbers. On August 8, believing that the Confederates had over 100,000 troops facing him (in contrast to the 35,000 they actually deployed at Bull Run a few weeks earlier), he declared a state of emergency in the capital. By August 19, he perceived 150,000 enemy to his front. McClellan's future campaigns would be strongly influenced by the overblown enemy strength estimates of his secret service chief, detective Allan Pinkerton, but in August 1861, these estimates were entirely McClellan's own. The net result was a level of extreme caution that would sap the initiative of McClellan's army and cause great condemnation by his government. Historian and biographer Stephen W. Sears has called McClellan's actions "essentially sound" if he had been as outnumbered as he believed, but McClellan in fact rarely had less than a two-to-one advantage over his opponents in 1861 and 1862. That fall, for example, Confederate forces ranged from 35,000 to 60,000, whereas the Army of the Potomac in September numbered 122,000 men; in early December 170,000; by year end, 192,000.
The dispute with Scott would become very personal. Scott (along with many in the War Department) was outraged that McClellan refused to divulge any details about his strategic planning, or even mundane details such as troop strengths and dispositions. (For his part, McClellan claimed not to trust anyone in the administration to keep his plans secret from the press, and thus the enemy.) During disagreements about defensive forces on the Potomac River, McClellan wrote to his wife on August 10 in a manner that would characterize some of his more private correspondence: "Genl Scott is the great obstacle—he will not comprehend the danger & is either a traitor, or an incompetent. I have to fight my way against him. Scott became so disillusioned over his relationship with the young general that he offered his resignation to President Lincoln, who initially refused to accept it. Rumors traveled through the capital that McClellan might resign, or instigate a military coup, if Scott were not removed. Lincoln's Cabinet met on October 18 and agreed to accept Scott's resignation for "reasons of health."
23288 Louis J Sheehan
23288 Louis J. Sheehan
McClellan's army began to sail from Alexandria on March 17. It was an armada that dwarfed all previous American expeditions, transporting 121,500 men, 44 artillery batteries, 1,150 wagons, over 15,000 horses, and tons of equipment and supplies. An English observer remarked that it was the "stride of a giant."[36] The army's advance from Fort Monroe up the Virginia Peninsula proved to be slow. McClellan's plan to seize Yorktown quickly was foiled when he discovered that the Confederates had fortified a line across the Peninsula, causing him to decide on a siege of the city, which required considerable preparation.
McClellan continued to believe intelligence reports that credited the Confederates with two or three times the men they actually had. Early in the campaign, Confederate General John B. "Prince John" Magruder defended the Peninsula against McClellan's advance with a vastly smaller force. He created a false impression of many troops behind the lines and of even more troops arriving. He accomplished this by marching small groups of men repeatedly past places where they could be observed at a distance or were just out of sight, accompanied by great noise and fanfare.[37] During this time, General Johnston was able to provide Magruder with reinforcements that were, even then, still far fewer troops than McClellan had miscalculated were opposite him.
After a month of preparation, just before he was to assault the Confederate works at Yorktown, McClellan learned that Johnston had withdrawn up the Peninsula towards Williamsburg. McClellan was thus required to give chase without any benefit of the heavy artillery so carefully amassed in front of Yorktown. The Battle of Williamsburg on May 5 is considered a Union victory—McClellan's first—but the Confederate army was not destroyed and a bulk of their troops were successfully moved past Williamsburg to Richmond's outer defenses while it was waged, and over the next several days.[38]
McClellan had also placed hopes on a simultaneous naval approach to Richmond via the James River. That approach failed following the Union Navy's defeat at the Battle of Drewry's Bluff, about 7 miles downstream from the Confederate capital, on May 15. Basing artillery on a strategic bluff high above a bend in the river, and sinking boats to create an impassable series of obstacles in the river itself, the Confederates had effectively blocked this potential approach to Richmond.[39]
McClellan's army cautiously inched towards Richmond over the next three weeks. He established a supply base on the Pamunkey River (a navigable tributary of the York River) at White House Landing where the Richmond and York River Railroad extending to Richmond crossed, and commandeered the railroad, transporting steam locomotives and rolling stock to the site by barge.[40]
On May 31, as McClellan planned an assault, his army was surprised by a Confederate attack. Johnston saw that the Union army was split in half by the rain-swollen Chickahominy River and hoped to defeat it in detail at Seven Pines and Fair Oaks. McClellan was unable to command the army personally because of a recurrence of malarial fever, but his subordinates were able to repel the attacks. Nevertheless, McClellan received criticism from Washington for not counterattacking, which some believed could have opened the city of Richmond to capture. Johnston was wounded in the battle, and General Robert E. Lee assumed command of the Army of Northern Virginia. McClellan spent the next three weeks repositioning his troops and waiting for promised reinforcements, losing valuable time as Lee continued to strengthen Richmond's defenses.[41]
At the end of June, Lee began a series of attacks that became known as the Seven Days Battles. The first major battle, at Mechanicsville, was poorly coordinated by Lee and his subordinates and caused heavy casualties for little tactical gain. But the battle had significant impact on McClellan's nerve. The surprise appearance of Maj. Gen. Stonewall Jackson's troops in the battle (when they had last been reported to be many miles away in the Shenandoah Valley) convinced McClellan that he was even more significantly outnumbered that he had assumed. (He reported to Washington that he faced 200,000 Confederates, although they actually numbered 85,000.)[42]
As Lee continued his offensive at Gaines' Mill to the east, McClellan played a passive role, taking no initiatives and waiting for events to unfold. He kept two thirds of his army out of action, fooled again by Magruder's theatrical diversionary tactics.[43] That night, he decided to withdraw his army to a safer base, well below Richmond, on a portion of the James River that was under control of the Union Navy. In doing so, he may have unwittingly saved his army. Lee had assumed that the Union army would withdraw to the east toward its existing supply base and McClellan's move to the south delayed Lee's response for at least 24 hours.[44] But McClellan was also tacitly acknowledging that he would no longer be able to invest Richmond, the object of his campaign; the heavy siege artillery required would be almost impossible to transport without the railroad connections available from his original supply base on the York River. In a telegram to Secretary of War Edwin Stanton, reporting on these events, McClellan blamed the Lincoln administration for his reversals. "If I save this army now, I tell you plainly I owe no thanks to you or to any other persons in Washington. You have done your best to sacrifice this army."[45] Fortunately for McClellan's immediate career, Lincoln never saw that inflammatory statement (at least at that time) because it was censored by the War Department telegrapher.
Cartoon of McClellan used in 1864 presidential campaign.
McClellan was also fortunate that the failure of the campaign left his army mostly intact because he was generally absent from the fighting and neglected to name a second-in-command to control his retreat.[46] Military historian Stephen W. Sears wrote, "When he deserted his army on the Glendale and Malvern Hill battlefields during the Seven Days, he was guilty of dereliction of duty. Had the Army of the Potomac been wrecked on either of these fields (at Glendale the possibility had been real), that charge under the Articles of War would likely have been brought against him."[47] (During Glendale, McClellan was five miles away behind Malvern Hill, without telegraph communications and too distant to command the army. During the battle of Malvern Hill, he was on a gunboat, the U.S.S. Galena, which at one point was ten miles away down the James River.[48] When the public heard about the Galena, it was yet another enormous embarrassment, comparable to the Quaker Guns at Manassas. Editorial cartoons during the 1864 presidential campaign would lampoon McClellan on the safety of a ship while a battle was fought in the distance.[49])
McClellan was reunited with his army at Harrison's Landing on the James. Debates were held as to whether the army should be evacuated or attempt to resume an offensive toward Richmond. McClellan continued his estrangement from Abraham Lincoln by his continuous call for reinforcements and by writing a lengthy letter in which he proposed strategic and political guidance for the war, continuing his opposition to abolition or seizure of slaves as a tactic. He concluded by implying he should be restored as general in chief, but Lincoln effectively responded by naming Maj. Gen. Henry W. Halleck to the post, without consulting, or even informing, McClellan.[50] Lincoln and Stanton offered command of the Army of the Potomac to Maj. Gen. Ambrose Burnside, who refused the appointment.[51]
Back in Washington, a reorganization of units created the Army of Virginia under Maj. Gen. John Pope, who was directed to advance towards Richmond from the northeast. McClellan resisted calls to reinforce Pope's army and delayed return of the Army of the Potomac from the Peninsula enough so that the reinforcements arrived while the Northern Virginia Campaign was already underway. He wrote to his wife before the battle, "Pope will be thrashed ... & be disposed of [by Lee]. ... Such a villain as he is ought to bring defeat upon any cause that employs him."[52] Lee had assessed McClellan's offensive nature and gambled on removing significant units from the Peninsula to attack Pope, who was beaten decisively at Second Bull Run in August.
McClellan's army began to sail from Alexandria on March 17. It was an armada that dwarfed all previous American expeditions, transporting 121,500 men, 44 artillery batteries, 1,150 wagons, over 15,000 horses, and tons of equipment and supplies. An English observer remarked that it was the "stride of a giant."[36] The army's advance from Fort Monroe up the Virginia Peninsula proved to be slow. McClellan's plan to seize Yorktown quickly was foiled when he discovered that the Confederates had fortified a line across the Peninsula, causing him to decide on a siege of the city, which required considerable preparation.
McClellan continued to believe intelligence reports that credited the Confederates with two or three times the men they actually had. Early in the campaign, Confederate General John B. "Prince John" Magruder defended the Peninsula against McClellan's advance with a vastly smaller force. He created a false impression of many troops behind the lines and of even more troops arriving. He accomplished this by marching small groups of men repeatedly past places where they could be observed at a distance or were just out of sight, accompanied by great noise and fanfare.[37] During this time, General Johnston was able to provide Magruder with reinforcements that were, even then, still far fewer troops than McClellan had miscalculated were opposite him.
After a month of preparation, just before he was to assault the Confederate works at Yorktown, McClellan learned that Johnston had withdrawn up the Peninsula towards Williamsburg. McClellan was thus required to give chase without any benefit of the heavy artillery so carefully amassed in front of Yorktown. The Battle of Williamsburg on May 5 is considered a Union victory—McClellan's first—but the Confederate army was not destroyed and a bulk of their troops were successfully moved past Williamsburg to Richmond's outer defenses while it was waged, and over the next several days.[38]
McClellan had also placed hopes on a simultaneous naval approach to Richmond via the James River. That approach failed following the Union Navy's defeat at the Battle of Drewry's Bluff, about 7 miles downstream from the Confederate capital, on May 15. Basing artillery on a strategic bluff high above a bend in the river, and sinking boats to create an impassable series of obstacles in the river itself, the Confederates had effectively blocked this potential approach to Richmond.[39]
McClellan's army cautiously inched towards Richmond over the next three weeks. He established a supply base on the Pamunkey River (a navigable tributary of the York River) at White House Landing where the Richmond and York River Railroad extending to Richmond crossed, and commandeered the railroad, transporting steam locomotives and rolling stock to the site by barge.[40]
On May 31, as McClellan planned an assault, his army was surprised by a Confederate attack. Johnston saw that the Union army was split in half by the rain-swollen Chickahominy River and hoped to defeat it in detail at Seven Pines and Fair Oaks. McClellan was unable to command the army personally because of a recurrence of malarial fever, but his subordinates were able to repel the attacks. Nevertheless, McClellan received criticism from Washington for not counterattacking, which some believed could have opened the city of Richmond to capture. Johnston was wounded in the battle, and General Robert E. Lee assumed command of the Army of Northern Virginia. McClellan spent the next three weeks repositioning his troops and waiting for promised reinforcements, losing valuable time as Lee continued to strengthen Richmond's defenses.[41]
At the end of June, Lee began a series of attacks that became known as the Seven Days Battles. The first major battle, at Mechanicsville, was poorly coordinated by Lee and his subordinates and caused heavy casualties for little tactical gain. But the battle had significant impact on McClellan's nerve. The surprise appearance of Maj. Gen. Stonewall Jackson's troops in the battle (when they had last been reported to be many miles away in the Shenandoah Valley) convinced McClellan that he was even more significantly outnumbered that he had assumed. (He reported to Washington that he faced 200,000 Confederates, although they actually numbered 85,000.)[42]
As Lee continued his offensive at Gaines' Mill to the east, McClellan played a passive role, taking no initiatives and waiting for events to unfold. He kept two thirds of his army out of action, fooled again by Magruder's theatrical diversionary tactics.[43] That night, he decided to withdraw his army to a safer base, well below Richmond, on a portion of the James River that was under control of the Union Navy. In doing so, he may have unwittingly saved his army. Lee had assumed that the Union army would withdraw to the east toward its existing supply base and McClellan's move to the south delayed Lee's response for at least 24 hours.[44] But McClellan was also tacitly acknowledging that he would no longer be able to invest Richmond, the object of his campaign; the heavy siege artillery required would be almost impossible to transport without the railroad connections available from his original supply base on the York River. In a telegram to Secretary of War Edwin Stanton, reporting on these events, McClellan blamed the Lincoln administration for his reversals. "If I save this army now, I tell you plainly I owe no thanks to you or to any other persons in Washington. You have done your best to sacrifice this army."[45] Fortunately for McClellan's immediate career, Lincoln never saw that inflammatory statement (at least at that time) because it was censored by the War Department telegrapher.
Cartoon of McClellan used in 1864 presidential campaign.
McClellan was also fortunate that the failure of the campaign left his army mostly intact because he was generally absent from the fighting and neglected to name a second-in-command to control his retreat.[46] Military historian Stephen W. Sears wrote, "When he deserted his army on the Glendale and Malvern Hill battlefields during the Seven Days, he was guilty of dereliction of duty. Had the Army of the Potomac been wrecked on either of these fields (at Glendale the possibility had been real), that charge under the Articles of War would likely have been brought against him."[47] (During Glendale, McClellan was five miles away behind Malvern Hill, without telegraph communications and too distant to command the army. During the battle of Malvern Hill, he was on a gunboat, the U.S.S. Galena, which at one point was ten miles away down the James River.[48] When the public heard about the Galena, it was yet another enormous embarrassment, comparable to the Quaker Guns at Manassas. Editorial cartoons during the 1864 presidential campaign would lampoon McClellan on the safety of a ship while a battle was fought in the distance.[49])
McClellan was reunited with his army at Harrison's Landing on the James. Debates were held as to whether the army should be evacuated or attempt to resume an offensive toward Richmond. McClellan continued his estrangement from Abraham Lincoln by his continuous call for reinforcements and by writing a lengthy letter in which he proposed strategic and political guidance for the war, continuing his opposition to abolition or seizure of slaves as a tactic. He concluded by implying he should be restored as general in chief, but Lincoln effectively responded by naming Maj. Gen. Henry W. Halleck to the post, without consulting, or even informing, McClellan.[50] Lincoln and Stanton offered command of the Army of the Potomac to Maj. Gen. Ambrose Burnside, who refused the appointment.[51]
Back in Washington, a reorganization of units created the Army of Virginia under Maj. Gen. John Pope, who was directed to advance towards Richmond from the northeast. McClellan resisted calls to reinforce Pope's army and delayed return of the Army of the Potomac from the Peninsula enough so that the reinforcements arrived while the Northern Virginia Campaign was already underway. He wrote to his wife before the battle, "Pope will be thrashed ... & be disposed of [by Lee]. ... Such a villain as he is ought to bring defeat upon any cause that employs him."[52] Lee had assessed McClellan's offensive nature and gambled on removing significant units from the Peninsula to attack Pope, who was beaten decisively at Second Bull Run in August.
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