Americans for Insurance Reform (AIR), a special project of the Center for Justice & Democracy (CJ&D), released a major new study today that (among other things) debunks the myth that insurance premium increases for doctors are somehow driven by whether or not a state limits patients’ rights, or that limiting injured patients’ access to the courthouse would have any real effect on overall health costs.
AIR’s report, True Risk: Medical Liability, Malpractice Insurance and Health Care, was written by CJ&D’s Gillian Cassell-Stiga and Joanne Doroshow, and actuary J. Robert Hunter, who is Director of Insurance of 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.
According to Hunter, “If Congress completely eliminated every single medical malpractice lawsuit…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.”
Here are the major findings:
• Medical malpractice premiums, inflation-adjusted, are nearly the lowest they have been in over 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 one percent of health care costs. In over 30 years, premiums and claims have never been greater than 1% of our nation’s health care costs.
• Medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been remarkably profitable over the last 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.