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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: cnyndwllr who wrote (21908)	10/18/2004 5:27:38 PM
From: kodiak_bull	Read Replies (1) \| Respond to of 23153

Agreed, the med malpractice topic is exhausted (mostly because I find it impossible to figure out a way to make a dime off it). But I will respond to 2 points you make: <<On another subject, I'm surprised that you are disputing the connection between the falling returns in the stock market and the increasing costs of insurance. I think this connection is clearly recognized, even by those who fall on your side of the "crisis" dispute.>> I said I didn't think that insurance firms could have been prescient enough to raise premiums for 2000 when the crash didn't begin until the 4th quarter of 01 for the Dow; in the 1st quarter of 01 the Dow was still trading in the 10700~11,000 range. As for the Naz, the crash began in earnest in the 2nd quarter of '00, but was still well into the 3500-900 range for almost the entire year. And Hope Sprang Eternal, as witnessed by all the foolish buying that year (some of it my own). It was only at the end of the year that it really began its deadly crash. Putting aside what kinds of conservative investments insurance companies usually participate in, generally not the Naz, there is also an economic rule at work here: just because your returns are falling doesn't mean you can pass on your costs to your customers. Airlines have learned this, to their great sadness. So I think trying to tie rising premiums to the stock market in 2000 is a red herring. <<You say; I don't know a single person, in my entire life, who has been killed in a highway accident. In contrast, I knew several people who died in car wrecks. You're either very lucky, your friends don't get out much or you have a very selective memory.>> Of the 3, I would have to say that I'm very lucky and my circle of friends is very lucky as well. (They seem to get out a lot.) But, assuming my memory still works, I've known people who died of cancer, heart conditions, liver failure and drowning, and my younger brother was in a car accident once and hospitalized for 2 days, but no auto fatalities. My point was that it's entirely possible that many things happen which we are not personally aware of. On the subject of luck, though, maybe it IS me. My wife, infant son and I held tickets for Korean Airlines Flight 007 on August 31, 1983. About 3 weeks before the flight we cancelled and rebooked NYC to Seoul on Northwest Airlines for a flight 2 weeks later. As you may recall, KAL 007, an extremely popular and cheap flight, landed in disintegrated form in the Sea of Japan courtesy of Soviet interceptors. It was the last KAL flight to ever sport the exciting James Bond numerical, for obvious reasons. I also survived a dangerous climbing incident (Grand Teton 1971, I was 17) and a near double-drowning in the South China Sea in 1978, on my honeymoon. Luck, she been veddy good to me. Kb

To: cnyndwllr who wrote (21908)	10/18/2004 6:31:41 PM
From: ian124	Read Replies (2) \| Respond to of 23153

You are simply incorrect as regards the association of higher malpractice premiums with lower stock market returns. As evidence, I offer Oklahoma, where the only major malpractice insurer (PLICO) is owned by the state medical association. Investment policy is extremely conservative; the company's portfolio has been entirely medium and long term bonds, which have done very well over the 22 year history of the company. PLICO is, needless to say, non-profit, and premiums have been held to the minimum necessary to ensure solvency and adequate risk margins. The company's financial position, however, has gone from rock-solid to near-bankrupt in the last four years, in spite of premium increases ranging from 28% to 50% per year in that period of time. Some physicians have left the state, and those with marginal or part-time practices have been forced out of business. Oklahoma, due to the efforts of a strict medical licensing authority and juries with good sense, had largely been spared the onslaught of the malpractice mess until recently; now it is here in full force. The malpractice crisis is multifactorial; it is no exaggeration, however, to say that it is real, and not a boogie man born of the insurance companies' need to recoup their investment losses. That contention is a false, though favorite, canard of the trial lawyers, who run the state legislature and have blocked repeatedly any effort at tort reform.