Medical Liability Crisis

The NyTimes has a op-ed by Bob Herbert about how the insurance agency is cooking up a crisis about medical liability.

The A.M.A. has its crisis states marked in red on a map of the U.S. on its Web site. One of the red states is Missouri. But a press release in April from the Missouri Department of Insurance said, “Missouri medical malpractice claims, filed and paid, fell to all-time lows in 2003 while insurers enjoyed a cash-flow windfall.”

Another red state on the A.M.A. map is New Jersey. Earlier this month, over the furious objections of physicians’ representatives, a judge ordered the release of data showing how much was being paid out to satisfy malpractice claims. The judge’s order was in response to a suit by The Bergen Record.

The newspaper reported that an analysis of the data showed that malpractice payments in New Jersey had declined by 21 percent from 2001 to 2003. But malpractice insurance premiums surged over the same period. A.M.A. officials told me yesterday that they thought the New Jersey data was “incomplete,” but they did not dispute the 21 percent figure.

While I’ve heard some things about there not being a corelation between medical tort reform and medical insurance premiums. It’s intresting to note that the low instrest rates that we have used to boost up the economy has the downside effect of putting pressure on premiums.

There is no question that malpractice insurance premiums have increased sharply over the past few years. In some instances they have skyrocketed. But, as the Congressional Budget Office has noted, there are a variety of reasons for that, including the cost of malpractice awards, decreases in the investment income of insurance companies and cyclical factors in the insurance market.

“Insurance companies’ investment yields have been lower for the past few years,” the budget office said in a report in January, “putting pressure on premiums to make up the difference.


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