[Mb-civic] Malpractice

[ean at sbcglobal.net]

http://newstandardnews.net/content/index.cfm/items/2070

New Study Says Malpractice Insurers’ Claims False
by Brendan Coyne

Jul 8 - Calls for reform in medical malpractice law may be aimed in the 
wrong direction, according to a study released yesterday which found 
that the leading malpractice insurers raised their rates dramatically 
over the last four years even though the amount they had to pay in 
lawsuits remained virtually flat.

While medical malpractice reform enthusiasts have blamed rising 
insurance premiums on the prevalence of lawsuits against doctors and 
medical providers, industry watchdogs have frequently pointed to 
studies showing that lawsuits have little do with the price of malpractice 
insurance.

The most recent study, "Falling Claims and Rising Premiums in the 
Medical Malpractice Insurance Industry," conducted for the Center for 
Justice and Democracy by former Missouri Insurance Commissioner 
Jay Angoff, found that the fifteen largest insurers are taking in more 
than double the amount in premiums that they accrued in 2000. 
Meanwhile, the report says, payouts have risen slightly more than 5 
percent in aggregate during the same period.

Additionally, stock prices for three companies that deal almost 
exclusively with medical malpractice insurance –AP Capital, FPIC and 
ProAssurance – doubled in the past three years, the study found.

In response to the findings, several state officials and consumer 
advocates condemned insurers for allegedly "price gouging" doctors. 
Connecticut Attorney General Richard Blumenthal accused the 
companies of profiteering, and Missouri Attorney General Jay Nixon 
said in a statement, "There is no excuse for malpractice insurers 
doubling their rates while their claims payments decrease."

Some companies are paying as little as 10 cents in claims for every 
dollar in premiums collected. According to the report, one firm, 
Lexington Insurance Company, a subsidiary of AIG, increased its 
premiums by 2200 percent while paying out just 14 cents on the dollar 
in claims since 2000.

The industry criticized the study for failing to take into account current 
underwriting costs, the Associated Press reports. Larry Smarr of the 
industry group Physician Insurers Association of America (PIAA) told 
the news outlet that companies collect premiums based on future cost 
projections.

But Angoff's study determined that insurers had regularly increased 
premiums at rates far exceeding the projected losses in each of the 
past four years, while trends in the study suggest no attendant future 
rise in claims. In addition to increasing premiums dramatically since 
2000, the 15 companies studied expect to raise rates higher even as 
they project a drop in future claims payouts, the study found.

Last February, Smarr said that rising malpractice premiums were 
leading to a "growing crisis of access to the health care system for 
patients across the country." He told a February hearing of the House 
of Representatives' Small Business Committee that "increased 
premiums are caused by the ever-increasing size of medical liability 
insurance payments and awards" leading to "ever-escalating losses."

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