Insurance premiums and claims for doctors both have dropped significantly in recent years, while the medical malpractice insurance industry is enjoying “remarkable profits” in light of the global economic collapse, a study released by Americans for Insurance Reform finds. The report concludes that further limiting the liability of negligent doctors and unsafe hospitals is not only unjustified, but also would have almost no impact lowering this country’s overall health care expenditures.
AIR’s report, “True Risk: Medical Liability, Malpractice Insurance and Health Care,” also stated that:
- Medical malpractice premiums, inflation-adjusted, are nearly the lowest they have been in more than 30 years.
- Medical malpractice claims, inflation-adjusted, are dropping significantly, down 45 percent since 2000.
- Medical malpractice premiums are less than one-half of one percent of the country’s overall health care costs; medical malpractice claims are a mere one-fifth of 1 percent of health care costs. In more than 30 years, premiums and claims have never been greater than 1 percent of the nation’s health care costs.
- Medical malpractice insurer profits are higher than the rest of the property/casualty industry, which has been remarkably profitable in the past five years.
- The periodic premium spikes that doctors experience, as they did from 2002 until 2005, are not related to claims but to the economic cycle of insurers and to drops in investment income.
- Many states that have resisted enacting severe restrictions on injured patients’ legal rights experienced rate changes (i.e., premium increases or decreases for doctors) similar to those states that enacted severe restrictions on patients’ rights, i.e., there is no correlation between “tort reform” and insurance rates for doctors.”
The report was authored by Gillian Cassell-Stiga and Joanne Doroshow of the Center for Justice & Democracy, and actuary J. Robert Hunter, who is director of insurance for the Consumer Federation of America (CFA), former Commissioner of Insurance for the State of Texas, and former Federal Insurance Administrator under Presidents Carter and Ford.
In describing the study’s findings, Hunter said, “Our study shows that states that have passed severe medical malpractice tort restrictions on victims of medical error have rate changes similar to those states that haven’t adopted these harsh measures. Finally, our research makes clear that medical malpractice claims and premiums have almost no impact on the cost of health care. … If Congress completely eliminated every single medical malpractice lawsuit, including all legitimate cases, as part of health care reform, overall health care costs would hardly change, but the costs of medical error and hospital-induced injury would remain and someone else would have to pay.”
Joanne Doroshow, executive director of the Center for Justice & Democracy, said, “Medical malpractice claims are down. Premiums are down. Meanwhile, insurers are raking in money and belittling the fact that hundreds of thousands of patients are killed or injured due to medical negligence each year. Many states have already afforded health care providers extensive legal protections for reckless or unsafe medical care. Proposals in any national health care bill that will take even more money out of the hands of injured patients and into the pockets of insurers are utterly indefensible.”
The full study can be found at: http://www.insurance-reform.org/TrueRiskF.pdf.
Source: Americans for Insurance Reform
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