This New York Times article entitled “Behind Those Medical Malpractice Rates” addresses the myth that Bush Administration and Republican Party-fueled propaganda campaigns continue to promote in their quest to limit for damage-limit legislation:
[F]or all the worry over higher medical expenses, legal costs do not seem to be at the root of the recent increase in malpractice insurance premiums. Government and industry data show only a modest rise in malpractice claims over the last decade. And last year, the trend in payments for malpractice claims against doctors and other medical professionals turned sharply downward, falling 8.9 percent, to a nationwide total of $4.6 billion, according to data.
Lawsuits against doctors are just one of several factors that have driven up the cost of malpractice insurance, specialists say. Lately, the more important factors appear to be the declining investment earnings of insurance companies and the changing nature of competition in the industry. The recent spike in premiums – which is now showing signs of steadying – says more about the insurance business than it does about the judicial system.
Even the connection limiting damages and reducing costs for doctors is not even well-established:
[S]ome researchers are skeptical that caps ultimately reduce costs for doctors. Mr. Weiss of Weiss Ratings and researchers at Dartmouth College, who separately studied data on premiums and payouts for medical mistakes in the 1990’s and early 2000’s, said they were unable to find a meaningful link between claims payments by insurers and the prices they charged doctors.
“We didn’t see it,” said Amitabh Chandra, an assistant professor of economics at Dartmouth. “Surprisingly, there appears to be a fairly weak relationship.
The Times article reiterates many of the same points that are made in the June 2003 GAO report entitled Medical Malpractice Insurance: Multiple Factors Have Contributed to Premium Rate Increases and this subsequent August 2004 Congressional testimony of GAO researchers on the same topic.
Make a note of the Times article and the these GAO resources the next time that you hear a demagouge declare that legislative caps on damages will reduce high medical malpractice premiums. Appealing to public bias against unpopular plaintiffs’ lawyers by promoting such legislation as a cure for high malpractice premiums amounts to rearranging the deck chairs on the Titanic. High medical malpractice premiums are a result of America’s broken health care finance system, and until we force our politicians to address the problems in that system, medical malpractice rates will continue to rise.
Hat tip to the HealthCareProf Blog for the links to the GAO resources.
Update: For a critique of the Times article’s conclusions, check out this Walter Olson post and this subsequent post over at the PointofLaw.com.
When I practiced in California from 2000-2002, I only represented physicians in their business matters, which included negotiating with malpractice insurance carriers. Towards the end of my stint at that job, we started noticing a trend of surcharges being added to premiums based on claims history where the “claims” were simply notice to sue letters that never went anywhere.
*clapping*
now if only we can get the state medical associations to start paying attention.
it’s amazing to me how many bright, well-intentioned docs have their heads buried completely in the sand on this one (and i say this having painstakingly argued this with two immediate members of my family, both docs).
I know what you’re saying, TP. I’ve got a brother and sister who are docs, and they feel much the same way. My sense is that this position is largely the result of anecdotal experience for the docs, all of whom know how time-consuming a med mal case can be. They equate the time wasting of litigation to cost, and then assume that at least a portion of that cost is borne in insurance premiums. Unfortunately, that cost turns out to be a fraction of the costs that the insurers underwrite in setting malpractice premiums.
The Times on med-mal, II: effect of caps
On Tuesday, readers will recall, the New York Times business section ran an article entitled “Behind Those Medical Malpractice Rates” under the byline of Joseph B. Treaster and Joel Brinkley. Yesterday I criticized at length the article’s assertion tha…