Re: Net Malpractice Payouts Stayed Flat, Net Premiums Increased 120%
From: art fougner, md (evsono@pipeline.com)
Thu Jul 7 14:49:07 2005
What about the sixteenth insurer?
art
At Thu, 7 Jul 2005, rmodugno@aol.com wrote:
>
>Who was it who said: "first, let's kill all the lawyers - then, let's work on the insurance companies!?"
>
>Robert Modugno MD MBA FACOG
>Marietta, GA
>
>-----Original Message-----
>From: dean@thehuffpeople.net
>To: Multiple recipients of list OB-GYN-L <ob-gyn-l@dns.obgyn.net>
>Sent: Thu, 7 Jul 2005 14:22:37 -0500
>Subject: Net Malpractice Payouts Stayed Flat, Net Premiums Increased 120%
>
>.
>
>Net Malpractice Suit Payouts Stayed Flat, Net Premiums Increased 120% Over Last
>Five Years, Study Says
>
>Net medical malpractice claims paid by 15 large insurers nationwide did not
>increase between 2000 and 2004, but net premiums increased by 120% over the
>same period, according to a study scheduled for release on Thursday by the
>consumer advocacy group Center for Justice and Democracy
><http://www.centerjd.org/>, the New York Times
><http://www.nytimes.com/2005/07/07/business/07insure.html?> reports. The claims
>totals in the study are calculated net of reinsurance payments. According to
>the
>study, between 2000 and 2004, the increase in malpractice insurance premiums
>collected by the 15 insurers was 21 times the increase in paid claims. In
>addition, between 2000 and 2004, the incurred-loss ratio -- the ratio of claims
>to premiums collected -- for the 15 insurers decreased by almost 25% to 51.4%,
>the study found. Nine of the 15 insurers reviewed in the study are mutual
>insurers owned by policyholders, and three are publicly traded companies that
>are part of larger conglomerates. The other three insurers reviewed are
>publicly traded companies that specialize in malpractice, and their stock
>prices each have each increased by more than 100% since May 2002. Jay Angoff, a
>consultant on the study and a former Missouri insurance commissioner, said, "In
>recent years, medical malpractice hasn't been unprofitable, but it's been
>phenomenally profitable." According to Connecticut Attorney General Richard
>Blumenthal (D), the results of the study "have the potential to alter the
>debate fundamentally from seeming to cast the rapacious personal injury lawyers
>as the complete culprits and the insurers as innocent bystanders with doctors
>as
>victims to the insurers as equally responsible, if not more so."
>
>--
>
>Methodology Questions
>
>Insurance industry officials questioned the methodology of the study. They said
>that the comparison of malpractice claims paid by insurers with premiums
>collected is unfair because claims often take eight to 10 years to develop and
>companies must maintain extra reserves. Lawrence Smarr -- president of the
>Physicians Insurers Association of America
><http://www.nytimes.com/2005/07/07/business/07insure.html?>, which represents
>insurers owned by physicians -- said, "It's a meaningless comparison that no
>respectable actuary would consider." He added that malpractice insurance
>premiums have increased because juries have issued higher awards in lawsuits
>and insurers have used those awards as justification for settling more claims.
>Smarr said, "The real problem is claim severity. It means that juries are
>awarding higher amounts and jury verdicts drive the potential cost of the claim
>so that makes settlements rise." American Medical Association
><http://www.nytimes.com/2005/07/07/business/07insure.html?> President Edward
>Hill said, "We have a proven record of the fact that the premiums will come
>down when you get strong liability reform. That's why we're pushing caps on
>noneconomic damages" (Anderson, New York Times, 7/7).
>
>Dean Huffman
>
--
art fougner, md
"If you don't know where you are going, you will wind up somewhere else."
Lawrence Peter Berra
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