Quote:
Originally posted by sebastian_dangerfield
The med mal crisis is a sham. The doctors are being manipulated by insurers. What needs to happen is the lawyers and docs getting together and suing the insurers for gouging. If you go through all the studies, you'll see the industry raises rates in response to disasters or dips in their investments. Thats breaching the very center of the insurance contract, which agrees to charge based on risk (its not written exactly that way, but thats the center of the concept behind insuruance since its existed).
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So much confusion, so little time.
Corporations generally behave rationally. You seem to be describing a business model that would be profitable. But, if you look over the various states' insurance ennvironments, you'll see that, in many cases, insurers have completely pulled out of various state markets.
This would make no sense in your model. It does make sense if you consider that a legal environment can mean the difference between the possibility of profit, or not. If an insurer can manipulate the doctors, and gouge higher premiums than what is called for, why would they walk away from that business?
Answer is, they don't. They walk away from guaranteed losers.
As to "breaching the contract" - consider that a state's legal environment is one factor in the risk picture.
