The Real Cause of High Malpractice Rates

Should we cap medical malpractice lawsuits across the nation? A study published earlier this year says that the malpractice insurance crisis that hit doctors between 2001 and 2004 was not caused by claims, payouts or legal system excesses as the insurance industry claimed. Rather, according to the industry’s own data:

• Inflation-adjusted payouts per doctor not only failed to increase between 2001 and 2004, a time when doctors’ premiums skyrocketed, but they have been stable or falling throughout this entire decade.
• Medical malpractice insurance premiums rose much faster in the early years of this decade than was justified by insurance payouts.
• At no time were recent increases in premiums connected to actual payouts.  Rather, they reflected the well-known cyclical phenomenon called a “hard” market.  Property/casualty insurance industry “hard” markets have occurred three times in the past 30 years.
• During this same period, medical malpractice insurers vastly (and unnecessarily) increased reserves (used for future claims) despite no increase in payouts or any trend suggesting large future payouts.  The reserve increases in the years 2001 to 2004 could have accounted for 60 percent of the price increases witnessed by doctors during the period.

Source: Americans for Insurance Reform

Comments

[Cranky Greg]

Physicians have lots of many to pay lots of lobbyists. Physicians seek special protection that others do not receive. Perhaps lawyers should get together and try to get special protection against malpractice suits. Or homebuilders or glass companies.

[catherine Reuter]

Please visit www.surgicalFire.org one more reason not to have a national cap.