A major new study released by Americans for Insurance Reform finds that 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. It 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, is by Gillian 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, “Thirty years of inflation-adjusted data show that medical malpractice premiums are the lowest they have been in this entire period. This is in no small part due to the fact that claims have fallen like a rock, down 45 percent since 2000. The periodic premium spikes we see in the data are not related to claims but to the economic cycle of insurers and to drops in investment income. Since prices have not declined as much as claims have, medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been remarkably profitable over the last five years.
“Our study also 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. Medical malpractice premiums are less than one-half of one percent of overall health care costs, and medical malpractice claims are a mere one-fifth of one percent of health care costs. 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, “Where’s the crisis? 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.”
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