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In 1989, Michael Hatch, then Commerce Commissioner of Minnesota, released an investigation of two medical malpractice insurance companies finding that each had increased doctors’ malpractice premiums some 300 percent. Yet the number of claims against doctors had not gone up, the amount paid out by insurance companies had not increased, and the number of frivolous claims had not increased.

In response to a question by ABC’s Nightline as to how this could happen, Hatch responded, “Because they had the opportunity to do it. There was a limited market. People need coverage. The companies knew they had a corner on it, and they raised their rates accordingly.”

Have we learned nothing from the past?

Apparently not. Today, doctors are striking around the country, asking Congress and state legislatures to limit the liability of malpracticing physicians and hospitals who injure or kill patients. Many states are succumbing to this pressure and enacting cruel limits on compensation for seniors abused in nursing homes, quadriplegic workers and even brain-damaged children who suffer for a lifetime.

The U.S. House of Representatives passed a bill in March to do just that, and the Senate may take up the measure at any time [Editor’s note: On July 9 Senate Democrats successfully blocked a vote on the bill]. And President Bush is aggressively stumping for this legislation.

Much of the juice for this campaign comes from the American Medical Association, a shameful organization that has chosen to lie down with a profiteering industry instead of protecting patients. The AMA and state medical societies have created a “crisis” atmosphere in many states by encouraging doctors to strike until caps are enacted. Among the states where doctors have staged these sham strikes are New Jersey, Florida, Illinois, Texas and West Virginia.

Yet in AMA “crisis” states, claims against doctors are actually falling or have held steady. Rather than leaving, doctors are flooding into many of these states. Moreover, in states where the AMA’s extortionate tactics have been successful, forcing lawmakers to restrict patients’ rights, rates have continued to climb and doctors are still struggling to find affordable insurance. This is the case in Nevada, Mississippi and Ohio, for example.

On June 2, 2003, Weiss Ratings, an independent financial-rating agency, released a study finding that over the last decade, states with caps on non-economic damage awards saw doctors’ malpractice insurance premiums rise faster than in states without caps. There’s only one thing that caps are sure to do, according to Weiss – boost insurance industry profits.

Weiss’s conclusions are consistent with those of every credible, independent body which has studied this issue, finding that interest rates, the economy and the economic cycle of the insurance industry are the cause of severe sudden rate hikes for doctors, which happen periodically irrespective of legal limits imposed in a particular state.

But many lawmakers either aren’t listening, or they don’t seem to care.

Take Kentucky, for example. Republicans there, to the outrage of Democrats, have refused to “accept” a report done by the state’s nonpartisan Legislative Research Commission. This report also found that doctors’ insurance premiums are not lower in states with caps on non-economic damages, and that limits on punitive damages resulted in higher premiums for some.

Like President Bush, Kentucky Republicans have decided to ignore the insurance industry’s responsibility for price-gouging doctors, focusing instead on limiting the rights of our most vulnerable citizens to hold hospitals and HMOs accountable in court – laws that will cause untold suffering, economic devastation, and for some, the destruction of family life.

One thing is for certain. These laws are sure to make insurance companies richer. But as major donors to the Republican Party, maybe that’s the point.

Joanne Doroshow is executive director of the Center for Justice & Democracy, www.centerjd.org. This article originally appeared on TomPaine.com.

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