Highly Profitable Malpractice Insurers Bankroll Big Dollar Campaign Against Prop 46, Says Consumer Watchdog Campaign

SACRAMENTO, Calif., July 30, 2014 /PRNewswire-USNewswire/ -- The medical malpractice insurance industry and hospitals are the biggest force bankrolling the campaign against a patient safety initiative on the Nov. 4 ballot, pumping in more than two-thirds of the $41 million war chest amassed by Proposition 46 foes, according to campaign finance disclosure documents.

After profiting wildly for years from unreasonably costly rates, medical malpractice insurers have contributed nearly half of all cash collected by the No on 46 campaign and, in combination with hospitals and other health insurance firms, more than 68% of the total.

"The malpractice insurance industry and hospitals are putting profits before patients," said Bob Pack, lead proponent of Prop 46, also known as the Troy and Alana Pack Patient Safety Act. "Even as America experiences an epidemic of up to 440,000 deaths a year due to preventable medical errors, those who hold our lives in their hands are more interested in protecting dollars and bad doctors rather than taking reasonable steps to save lives."

Bob Pack is the father of Troy and Alana Pack, who were 10 and 7 years old when they were killed by a drunk and drugged doctor-shopping driver who had been overprescribed thousands of pills from Kaiser physicians.

Insurers have contributed 56% of the cash to the No on 46 campaign, while hospitals have given 12% and medical groups have provided more than 31%. The California Secretary of State is set to release the latest campaign finance reports on Thursday. A breakdown of donations to the No on 46 campaign by industry and firm can be downloaded at: www.tinyurl.com/NoOn46 

Not surprisingly, malpractice insurers and hospitals have dramatically outraised the broad coalition of malpractice victims, patient safety advocate and consumer groups backing Prop 46. The campaign for the initiative has raised about $4 million. 

"We knew from the beginning that we would be like David fighting against an insurance and medical industry Goliath," Pack said. "But I have faith that even a mountain of cash and a TV advertising campaign full of lies and distortions won't be able to sway California voters from realizing we need to take steps to better protect patients. Prop 46 is the right step at the right time. Prop 46 will save lives."

The medical malpractice insurance industry is able to bankroll the campaign against Prop 46 largely because it has been incredibly profitable in recent decades, paying out in malpractice claims as little as 10 cents of every premium dollar collected and keeping the rest for overhead, big salaries for top executives, and surpluses. Malpractice insurers' net income is roughly double what is collected by most other lines of insurance, including auto and home policies.  

With so much cash coming in the door, California's two largest malpractice insurance firms have amassed a surplus of more than $2 billion. In 2012, Insurance Commissioner Dave Jones ordered several of the state's biggest firms to rebate more than $52 million to California doctors.

Proposition 46, the Troy and Alana Pack Patient Safety Act, would:

• Require physicians check the state's existing prescription drug database before prescribing certain addictive drugs to first-time patients, in order to curb doctor-shopping drug abusers.
• Promote deterrence to patient harm and promote justice for victims of harm by adjusting the state's cap on malpractice damages to account for more than 38 years of inflation, giving the cap the same value it had when it took effect in 1975, while maintaining the existing cap on attorneys' fees.
• Require random drug and alcohol testing of doctors with admitting privileges at California hospitals, to protect patients from being treated by impaired physicians.

Medical negligence is the third leading cause of death in the United States, according to a study in the Journal of Patient Safety that estimated up to 440,000 people die each year because of preventable medical errors. The Medical Board of California reported that experts estimate nearly one in five doctors will abuse drugs or alcohol during their lifetimes. Drug overdose deaths in the U.S. have more than tripled since 1990 and most of those deaths are due to prescription drugs.

Learn more about Proposition 46 at www.YesOn46.org.

SOURCE Consumer Watchdog Campaign