-VISIT OUR OTHER FORUMS- OB-GYN-L Ultrasound Ultrasound History Fibroid Forum Physicians-in-Training Tech Talk OBSTET-L (portuguese) OBGIN-L (spanish) Nursing

Re: Net Malpractice Payouts Stayed Flat, Net Premiums Increased 120% From: art fougner, md (evsono@pipeline.com) Fri Jul 8 07:40:30 2005 Messages sorted by: [ date ][ thread ][ subject ][ author ] Next message: jayant shantilal: "Re: London Bombings" Previous message: aippg@aippg.com: "London Bombings" In reply to: Anna Meenan, MD: "Re: Net Malpractice Payouts Stayed Flat, Net Premiums Increased 120%" FYI National data show that claim severity has been increasing. The Public Citizen report claims that median jury verdicts increased from just over $200,000 in 1997 to $265,000 in 2004—a 32.5 percent total increase or 4 percent per year (Figure 4). Data from the Physician Insurers Association of America (PIAA) directly contradict this. According to PIAA, the median jury award in medical liability cases nearly doubled—a 91 percent increase—from 1997 to 2003, increasing from $157,000 to $300,000. This is an 11 percent per year increase in contrast to the 4 percent claimed by Public Citizen. PIAA data show that the growth in settlements has mirrored that of jury awards. Median settlements increased from $100,000 to $200,000 between 1997 and 2003, a 100 percent total increase or 12 percent per year. Public Citizen claims that only 1 percent of payments in 2004 were $1 million or larger. Again, PIAA data argue this point. From PIAA, the (2003) percentage was 8.1 percent—eight times the amount claimed by Public Citizen. Moreover, PIAA data suggest this has been increasing over time. The 8 percent of paid claims account for nearly 30 percent of 2003 total payouts. The same PIAA data also show the high costs physicians and their insurers pay to defend against meritless claims. Average defense costs were $87,720 per claim in cases where the defendant prevailed at trial. For claims that were dropped, withdrawn, or dismissed, costs to defendants averaged $17,408. Public Citizen also underestimates the upward trend in the total value of payouts. Public Citizen claims that the total value of payouts increased from just over $3 billion in 1997 to $4.2 billion in 2004, an increase of about 4 percent per year. Data from AM Best Aggregate and Average show that total industry losses (medical liability) have increased from $2.6 billion in 1997 to $6.5 billion in 2003, a 16% increase per year. According to a study by Tillinghast, there were increases in medical liability payouts and associated legal costs of about 12 percent each year from 1975 to 2003, outpacing increases in overall U.S. tort costs (9.4%). In a broader context, Tillinghast has reported that U.S. tort costs grew by 13.3% in 2002, and 14.4% in 2001. That growth far outpaced trends of the past decade. In 2003, the U.S. General Accounting Office (GAO) released a report saying that, since 1999, medical liability premiums escalated in some states and medical specialties, and that losses on medical liability claims were the primary driver. A 2004 study by the National Association of Insurance Commissioners (NAIC) found that the primary driver of medical liability premium increases was payouts. References: Physician Insurers Association of America, Claim Trend Analysis: 2003 Ed. (2004). Best’s Aggregates and Averages Property/Casualty, 2004 Ed. (2004). Tillinghast-Towers Perrin, U.S. Tort Costs: 2004 Update: Trends and Findings on the Cost of the U.S. Tort System (2004). U.S. General Accounting Office, Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates, GAO-03- 702 (2003). Also see, GAO-03-836. Medical Malpractice Insurance Report: A Study of Market Conditions and Potential Solutions to the Recent Crisis, Presented to the NAIC’s Property and Casualty Committee, September 12, 2004. And so it goes ... art At Thu, 7 Jul 2005, Anna Meenan, MD wrote: > >The second half (Methodology Questions) is where you'll find the >relevant information. Necessary reserves are calculated based on >anticipated losses years in the future. I've said it before and I'll >say it again: The University of Illinois is self-insured and non-profit. >Actuarial calculations of future losses based on what's in the pipeline >now and estimated future risks resulted in an increase in the levy on my >campus (the smallest one, by the way) last year from $795,000 to $1.5 >mil. I'm no expert on this, but I can't think of any other reason we >would take more money out of one of our pockets and put it away in >another pocket, unless we thought it needed to be there. > >-- > Anna Meenan, MD > >At Thu, 7 Jul 2005, ö¹@?wR. Daniel Braun wrote: >> >>. >> >>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 Next message: jayant shantilal: "Re: London Bombings" Previous message: aippg@aippg.com: "London Bombings" In reply to: Anna Meenan, MD: "Re: Net Malpractice Payouts Stayed Flat, Net Premiums Increased 120%"

Return to

Mail a New Message to the Forum: ob-gyn-l@obgyn.net Forum Administrator: geffrey.klein@obgyn.net Report Technical Problems: webmaster@obgyn.net Last Updated: Wed Jul 2 04:40:26 2008

The American Medical Association is no longer designating CME hours for AMA Category II CME credit. However, physicians themselves may self designate learning activities as Category II CME credit hours if they feel it is of sufficient educational merit and meets the formal definitions of continuing medical education. OBGYN.net believes these interaction in this forum meets these criteria. For further information see the AMA web site.