In 2003, Maryland was suffering a serious case of medical malpractice abuse: litigation was so out of control that physicians could not pay their premiums.  Unfortunately, instead of enacting responsible med-mal reform, as then Gov. Ehrlich proposed, legislators decided to shift the pain from physicians to taxpayers by subsidizing docs' med-mal premiums.

Of course, because politicians are incapable of determining what the appropriate corrective subsidy should be, Maryland's largest med-mal insurer now suffers an embarassment of riches, according to the Baltimore Sun.  Regulations prevent the Medical Mutual Liability Insurance Society of Maryland from paying back premium credits to its owners/beneficiaries, i.e., the physicians, while holding onto the subsidies, so the Society has decided to return $32.5 million of the $72.4 million that it has so far received it order to get approval for a dividend.

Some legislators have learned the wrong lesson. Sen. Brian Frosh claims that the state was right to skip med-mal reform and go straight to handing out subsidies.  He seems to think the "crisis" was idiosyncratic.  But it's far more likely that today's riches are an artefact of the underwriting cycle - or too generous taxpayer handouts.

Maryland ranks an abysmal 48 out of 50 in the Index of Health Ownership's medical tort category (see p. 34).  A brief sigh of relief that med-mal insurers are able to hand back some of the taxpayers' money is no substitute for real change.  Maryland needs to re-focus on med-mal reform now - before the next crisis drives doctors to rally outside the state Capitol again, when they'd rather be treating patients.