Regulators in New York approved a 14 percent increase in medical malpractice insurance rates on Monday and Gov. Eliot Spitzer formed a task force to find ways to rein in the high cost of the coverage.
The state insurance department said the latest rate hike was lower than insurance companies wanted and “is necessary to avoid further financial deterioration of the companies and perhaps an irreversible crisis in an already severely distressed market.”
State Insurance Superintendent Eric Dinallo will lead the task force, which will report back to Spitzer by the end of the year. It will include state Health Commissioner Dr. Richard Daines and representatives of physician and hospital groups, the insurance industry, consumer groups, health plans, trial lawyers and state lawmakers.
“I am concerned that the increasing cost of medical liability insurance will drive some physicians out of the field and will discourage young people from entering the medical profession in the first place,” Daines said.
Consumer groups questioned the rate increase and said there hasn’t been a recent increase in medical malpractice claims. They’ll urge the new task force to focus on the root problems of malpractice by reducing medical errors and correcting industry mismanagement.
“We look forward to the New York Insurance Department carefully examining remedies that specifically address the true reasons behind the hike,” Joanne Doroshow, executive director of the Center for Justice and Democracy, said in a prepared statement.
The Center for Justice & Democracy, Center for Medical Consumers and New York Public Interest Research Group on Monday released an analysis of 30 years of state insurance data by actuary J. Robert Hunter, director of Insurance for the Consumer Federation of America and a former federal Insurance Administrator. Hunter’s research found that since the mid-1980s, there hasn’t been a significant increase in the amounts medical malpractice insurers paid out in claims, including all jury awards and settlements.
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