Medical malpractice insurance rates rose dramatically during the past five years, but the amount insurers paid out in claims did not, according to a study from a consumer advocacy group. The study, by the Center for Justice & Democracy, found that malpractice rates increased by 120 percent from 2000 through 2004, while the amount of money paid in claims went up by 5.7 percent.
“This is wacky,’” said Jay Angoff, a former insurance commissioner in Missouri and the primary author of the study. “Now what’s the insurance companies’ defense to this?”
The report also found that the leading insurers increased their surpluses by a third. “The extra cherry on top for the industry, and the extra knife in the gut for doctors, is not only did claims payments go down … the companies also added to their surpluses,” Angoff said.
Researchers looked at annual statements filed with state insurance departments by the nation’s 15 largest medical malpractice insurers.
Insurers criticized the study because it only considered payments to plaintiffs. Larry Smarr, president of the Maryland-based Physician Insurers Association of America, said that if money paid to defend claims had been included, the report would have painted a much different picture.
“We know it takes on average 4 1/2 years from when an accident happens until a claim is paid,” Smarr said. “Comparing the premiums collected today with the claims that were incurred as long as 10 years ago is a totally inappropriate comparison.”
Agnoff dismissed that argument, saying that projected costs for claims have also decreased.
Connecticut Attorney General Richard Blumenthal called on the state regulators to review the study and suggest legislation. He said measures such as providing refunds to doctors who have been overcharged and allowing surpluses to be considered when setting rates should be considered. “Clearly the numbers underscore the need for much tougher and much more aggressive oversight to prevent and punish profiteering,” he said.
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