Report: No Link Between Doctors' Insurance Rates & Malpractice Suits

PUBLIC CITIZEN PRESS RELEASE
For Immediate Release: April 19, 2005


New Report Finds No Link Between Spike in Doctors' Insurance Rates and
Medical Malpractice Lawsuits by Injured Patients

Most Recent Government Data Reveal Declining Malpractice Payouts;
Real Crisis Continues to Be Inadequate Measures for Guaranteeing
Patient Safety

WASHINGTON, D.C. - The latest national data on physician malpractice
payments show no evidence that the spike in doctors' insurance rates is
due to lawsuits by patients, a new study by Public Citizen confirms.

At the same time that insurance rates in some areas have been climbing,
the number and total value of malpractice payouts to patients have been
flat since 1991 and, in fact, show a significant decline since 2001,
when the spike in insurance rates began, the study found.

"The hard, factual evidence cannot be any clearer: We have no medical
malpractice lawsuit crisis in America," said Joan Claybrook, president
of Public Citizen. "Insurance companies may be padding their bottom
lines by jacking up rates on doctors, but it is not because of patients
seeking relief for bad medical care through our courts. The true crisis
continues to be in inadequate measures for patient safety and
incompetent medical care by a small number of physicians."

The data show that from 1990 to 2004, only 5.5 percent of doctors
account for 57.3 percent of all malpractice payments. In addition, only
11.4 percent of doctors who have made three or more malpractice payouts
have ever been disciplined.

For the full press release, please go to
http://www.citizen.org/pressroom/release.cfm?ID=1925

The report, Medical Malpractice Payment Trends 1991-2004; Evidence
Shows Lawsuits Haven't Caused Doctors' Insurance Woes, is available
online at
http://www.citizen.org/congress/civjus/medmal/articles.cfm?ID=13309.

Meanwhile, Public Citizen today also released its annual rankings of
state medical boards. The rankings, found online at
http://www.citizen.org/MedBoard, are based on data from the Federation
of State Medical Boards and specify the number of disciplinary actions
taken against doctors from 2002 to 2004.

------------------------------------------------------------
For more information about this, and the other issues Public
Citizen works on, please visit our website at
http://www.citizen.org/

Data of this kind has been around for some time now. In addition, states that have passed caps have not seen any change in the insurance premiums. This whole thing is total crap. You can bet that every frickin' state in the country could pass caps, etc. but those insurance rates will not drop. Insurance companies are investment companies and not really set up to help anyone but their shareholders.

the information has made no impact whatsoever on the average person compared to what the Bush et. al. propaganda machine has spewed out. It sorely needs to reach the consciousness of voters.

And the physicians fear lawsuits so much and fear increases in premiums for malpractice insurance so much that they are for caps no matter what.

This is kind of a chicken and egg issue, but that fear of lawsuits, (perhaps a rational fear, perhaps not) is one of the things driving some medical care costs up. When I was younger doctors made diagnoses with minimal testing; now many of them think they have to test for everything before they diagnose. I'm not saying exactly that I would want them to go totally back to the old ways, but some of the testing that occurs today is defensive testing, I think.

I would like to come up with some other way to allay the fears of physicians. The fear at least is real--physicians in small solo practices especially feel exposed.

I think Louisiana has come up with some kind of review board ( a kind of sniff test) before a case can go to court--don't know how well it is working or if it is fair, but it could be tinkered with.

You could also think of physicians as part public servant, part capitalist and have the federal government enter the fray and either regulate malpractice insurance, provide it at reduced rates, bargain with insurance companies to get lower rates, etc, much like is at times done with drugs, or just subsidize any portion of malpractice insurance that increases dramatically--obviously the latter would just feed the insurance companies, but it might be better than caps.

Another thing that concerns me is that Bush et. al. have started to jump from saying caps will help with malpractice insurance costs to saying it will help with general population health insurance costs. Even considering my statement above about testing, I am less than convinced that it will help--in part due to the very thing you mention and in part because I am not certain how much of the testing would be or should be stopped now that we have come to accept it as a part of the standard of care.

A further concern is that I think this cap idea is just the tip of the iceberg as to what they really have in mind. I think they want to apply it to lawsuits against large business corporations and that their promulgation of this particular cap is just their foot-in-the-door. (Not to mention that trial lawyers also happen to be among the largest contributors to Democrats).

anyone who believes that they would drop,
would be sorely mistaken.

No, I can't name them off the top of my head, go vet my post yourself if you're curious. I hate Bush's propaganda about liability reform. Just...hate it.

of the tax returns for MD & DDS in a large metropolitan area.

the beginning salary for an MD or DDS is in the $100K range. Earnings of $300K to $500K are not uncommon.

Mal practice insurance usually runs about $5,000 to $10,000 per year. This is comparable to most CPA's and several other types of professionals...

This is a BOGUS argument.

some counties. http://www.policyalmanac.org/health/archive/medical_malpractice.shtml

insurance rates and everything to do with the Republican effort to make this a one party country. It is part of the war they are waging against all Democratic contributor groups. Do away with contingency fees and that dries up trial lawyer money. outsource every union job to foreign countries and labor is no longer a factor. Use vouchers to destroy the public school system and the teachers organizations are powerless. These people are working to erase the New Deal and one of the key tactics is to vilify and enervate those groups and individuals who stand in their way.

I don't know when the data bank went public, but historically the problem with challenging rate increases was the lack of claims data. I have seen a number of studies that tried to get the data through the back door by analyzing court records and such, but they never got more than 15-20% of the actual dollars paid.

Insurance companies tend to keep the particulars of claims secret, considering them proprietary information, so it's always been difficult to get decent data. They also don't make public their reinsurance arrangements, and there is a world of difference between mutual associations, management companies, and stock companies when ratemaking. Usually, they at most report gross numbers to state insurance departments and/or rating agencies.

Normally, competition keeps rates down. Yes, as an underwriter for over 20 years, I am intimately familiar with ratemaking and will tell you in no uncertain terms that when business is good, companies will inevitably head for the bottom in rates and you can get a reduction every year until things go bad and rates start to go back up. I went through quite a few of these cycles, and everyone in the business knows how they work.

Unless, of course, they don't really want your business or something else happens to screw things up-- then you can pay through the nose. I am aware of a mutual malpractice association around here that was doing quite well until they decided to expand to other states where they didn't understand the local risks very well. They undercut rates and lost their shirts, so starting raising rates for everyone.

Since 9/11, all insurance companies have been hit by astronomical reinsurance costs. In the past, they could reinsure most of the risk away, but that's not the case any more. They now have to generate more cash to keep in reserve for claims. This means general premium increases overall, and can't be helped.

Some specialties, such as ob-gyn, are hit by the "tail." Claims can come in up to 20 years later when the doctor being sued is retired, or for other reasons the policy is no longer in force. It is unclear from the numbers given whether the claim occurred in a given year, or was presented in that year. Trust me on this-- it is absolutely impossible to come up with a proper rate when there is no limitation on how long you can wait to sue.

Overall, I've been saying what this report says-- if some doctors didn't screw up so much nobody would be hit with huge premiums and other than that, any premium problems are almost entirely the insurance companies' problem to resolve.

It is definitely not the fault of the courts, which do absolutely nothing but compensate the victims of incompetance.

They go up when the stock market goes down and insurance companies lose money in the stock market.

you the same thing! The truth is doctors hire people to cheat the system. when they ask for many years of experience dealing with Medicare, Medicaid, workman comp, auto insurance, etc, etc, they are REALLY asking for someone who has the knowledge to find every little loophole that exists and the ability to make some up too!

Believe me a WHOLE lot of the blame lies at the feet of the doctors who want to make more and more money. They just don't give a shit if the person that comes and sees them HAS the money for the most part. They will figure out a way to get exorbitant prices for their products and services no matter what. If you want to know why THIS country doesn't have nationalized health care take a look at the PAC contributions of just about any Senator or Representative. The Republicans get far more contributions from medical associations, but the reality is the Dem's get them too. Just what do you think they want in return?

If you didn't answer a guarantee that this country will NEVER pass a socialized medical reform bill you would be sadly mistaken!