Posted On: January 19, 2007, 3:21 pm CST

Posted By: Mike End

Ratemaker,
In 2005 there were 14,021 claims paid in the United States. Of cases that go to verdict, the patients win only about 25%. In Wisconsin, it is about 20%. In Wisconsin, the insurers spend more defending cases than they pay in claims. In 2005 Wisconsin medical malpractice insurers earned direct premiums of $103 million and paid claims of $43 million, for a pure loss ratio of 41%. Not bad for the insurers.
Interestingly, in Wisconsin the entire cost of the medical malpractice system amounts to 0.4 of 1% of our health care costs. In other words, 40 cents of every $100. Caps make very little difference in the cost of health care. Insurance premiums paid by doctors in California, with the most restrictive cap in the country ($250,000)since 1975, are much higher than the premiums paid by doctors in Minnesota, which has never had a cap. The problem with restrictive caps is that lawyers have little incentive to take the risk and incurring the big expenses involved. Thus, many people with legitimate claims never get compensated.