Malpractice Rates From Survey

[Whisker Barrel Cortex]

Here are some average yearly malpractice insurance rates for certain specialties from a survey done in 1998. Remember, these can vary greatly depending on location, safety record, types of procedures performed, etc. Also, they may have changed somewhat in the past 5 years.

Neurosurg: 54K
CT surgery: 31K
Ortho: 31K
OB/Gyn: 29K
Gen Surg: 25K
Colorectal: 21K
ENT: 20K
Urology: 15K
Radiology: 13K
Anesthesia: 13K
EM: 12K
Cardiology: 10K (includes non-interventional)
Pediatrics: 10K
Oncology: 10K
Rheum: 10K
GI: 9K
Optho: 9K
Fam Practice: 8K
Internal Med: 8K
Derm: 8K
Neurology: 6K
Pathology: 5K
Psych: 4K

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[droliver]

This survey has quickly gone obsolete. The rate increases in some fields have tripled in the last 3 years. Since 1998 one of the larger carrieres who had the cheapest coverage (St. Paul's) pulled out of the field all together. The stock market bubble also crashed after this survey which was supporting artificial depession of rates at the time as the carriers were in an all out price war to capture larger market share

 

[Apollyon]

Originally posted by droliver
This survey has quickly gone obsolete.

Bummer.

 

[Papa Smurf]

Originally posted by Whisker Barrel Cortex
Here are some average yearly malpractice insurance rates for certain specialties from a survey done in 1998. Remember, these can vary greatly depending on location, safety record, types of procedures performed, etc. Also, they may have changed somewhat in the past 5 years.

Neurosurg: 54K
CT surgery: 31K
Ortho: 31K
OB/Gyn: 29K
Gen Surg: 25K
Colorectal: 21K
ENT: 20K
Urology: 15K
Radiology: 13K
Anesthesia: 13K
EM: 12K
Cardiology: 10K (includes non-interventional)
Pediatrics: 10K
Oncology: 10K
Rheum: 10K
GI: 9K
Optho: 9K
Fam Practice: 8K
Internal Med: 8K
Derm: 8K
Neurology: 6K
Pathology: 5K
Psych: 4K

I'd have to agree with whoever said that these numbers are meaningless. Interventional cardiologists only paying $10K a year for malpractice? In what fantasy world? Many are paying 4 to 5 times that amount. I know internists who pay $30K! Lots of physicians aren't even being renewed by their insurance carriers and are either closing their practices or self insuring themselves. Self insuring means you have to prove you have a certain amount of cash sitting in an account (usually at least $250K) in order for the state to let you practice without any coverage.

 

[Careofme]

Ah ha...here's the information I was searching for (please disregard my thread)....


Anyone know if there is a more current survey out there or one in the works? Are these all self-reported surveys?

Thanks!

 

[Winged Scapula]

One need only to look at the news in Pennsylvania to see the malpractice crisis in effect.

The community general surgeons in our area are paying 3x the rates quoted in the survey, and that's increased in just the last 3 years. Has their income increased by the same factor? Of course not. An orthopedic surgeon in Philly received a $350,000 malpractice bill and has since left the state. This surgeon has no history of being sued successfully. Yearly malpractice claims in Philadelphia alone exceed the total paid in the entire state of California! Only Mississippi and West Virginia are rated by insurance and business analysts as worse for malpractice and tort climate.

From 1997 to 2001 malpractice insurance rates in Pennsylvania increased 80-150 percent. Last year they increased another 50 percent. The crisis is such that 36% of general surgeons have left Pennsylvania over the last 3 years because of these issues. Recruitment of young surgeons is becoming very difficult for the same reasons. Many companies are now refusing to provide coverage for surgeons - regardless of whether you've ever been sued before. These guys work hard and its disheartening to see them work so and pay 1/3 of their income in malpractice.

According to Dr. Bret Delone, a general surgeon in Harrisburg PA and an active participant in malpractice and tort reform, notes that PA personal injury lawyers have a greater than 70% error rate in malpractice claims. More than 7 out of 10 claims are dismissed, dropped or are found in favor of the doctor or hospital. As he notes, if he had a greater than 70 percent error rate in OR, he'd belong in jail. Furthermore, only 1.3% of settlements are jury awards to plantiffs.

In 1975 California adopted a cap on awards and attorney fees. The law requires that patients receive 100% compensation for medical bills, lost wages, rehab, and future earnings, however, any awards beyond these measurable losses (ie, "pain and suffering") are limited to $250,000. According to the Medical Insurance Exchange of California, from 1994 to 1998, tort reform in that state resulted in more than 77 million dollars being redirected from attorneys to patients and their families.

At any rate, I'll get off my soapbox - the figures cited in the OP are horribly outdated in most places, but especially here and to quote a long ago pop icon "stop the insanity!"

 

[Whisker Barrel Cortex]

These numbers are averages for the whole country. Taking extreme examples from the hardest hit locales is misleading. Here is another website with data from 2002, probably closer to todays market. These numbers are actually from Nevada, one of the worst states for malpractice:

http://doi.state.nv.us/CI-MM-SurveyMedmalMarketNV.pdf

These numbers are relatively similar to the numbers above if you look at the overall average, the only one that has changed significantly is emergency medicine. General Surg, neurosurg, OB/GYN, radiology, FP, internal medicine and most of the others are around the same amount on the overall average.

[Post edited due to miswording previously]

 

[droliver]

Originally posted by Whisker Barrel Cortex
These numbers are relatively similar to the numbers above. Look at the "Highest Average Charged" column and you will find the examples given by posters above.

They don't look too similar compared to 1998 to me for the high risk specialties. Those numbers do look pretty close to Kentucky rates presently if you add +5% to them

 

[MacGyver]

Instead of giving the big insurance companies more profit, why dont we pass regulations restricting the premiums that companies can charge?

Everybody likes to talk about California and their caps, but few people realize that premium rates INCREASED even after the cap was enacted. The only reason premiums went down in Cali is because of insurance reform, not tort reform.

Doctors picked the wrong side of the battle lines here, and chose to align themselves with profit-driven insurance companies.

I hope most of you are aware that there have been several insurance CEOs who have stated publicly that even if tort reform was passed, it would be many years before premiums would be lowered, if at all.

 

[maxheadroom]

Important to point out that premiums are market-driven; if lower premiums were possible, companies would reduce rates to gain business volume. The fact is, insurance companies have to charge the rates that are currently in place to pay their cost of business and to indemnify the physicians covered. We can't just say, "Make rates 50% less" <poof> and it's all better. We have to address the root of the problem, which is a rampant climate of medical malpractice claims that are completely spurious. We also need state medical boards to be more aggressive in suspending the licenses of phsyicians who practice bad medicine. If Dr. X has a complication rate for Y procedure of 10% when the regional rates average out at 3% then his carrier should charge higher rates given the higher risk that he exposes them to.

 

[edinOH]

While I agree that there needs to be tort reform as it pertains to medical malpractice issues, I don't think the rising cost of insurance can be blamed solely on claims paid. One of the big reasons for the increase is that insurance companies have been hit hard recently by the down turn in the stock market. Since these companies all have their individual profit goals that need to be met, they want to make up the difference somewhere. One of the ways they are doing this is raising the rates for malpractice insurance. Since physicians are a relatively affluent group of clients who absolutely need their services inorder to make a living, medical malpractice rates are an easy target.

One question I have is how are these companies regulated by the states? I know that state insurance regulators must approve rate increases for things like home and auto insurance to prevent the insurance companies from fleecing consumers. Judging by the recent increases, this doesn't necessarily seem to be the case for malpractice insurance. If it isn't, then why not?

I think one effective model for malpractice insurance would be the physician owned insurance company. I believe Oklahoma has such a system. From conversations I've had with docs from there, they have only had a negligable increase in premiums over the last few years. It seems to me that in this case, if you remove the profit motive from the issuance of insurance, and just fund the pool based only on the likelyhood of paying a claim, the rates could be kept under better control. I realize there is an element of funding the insurance through gains in the market but I still think removing the "middle man" would help keep rates down.

I think the same case could be made for the funding of managed care plans as well. But that's a different topic.

 

[docB]

Originally posted by MacGyver
Instead of giving the big insurance companies more profit, why dont we pass regulations restricting the premiums that companies can charge?

Ever notice how whenever people don't like something they refer to it as "big" and accuse it of being profit driven? Big business, big tobacco, big government, etc. And anyone who makes a profit must be stealing from some more righteous, down trodden group.
Unless you are willing to work for free you are motivated by profits. I am highly profit driven. If you are willing to work for free the peace corps is accepting volunteers.
The reason we really shouldn't regulate premiums is that once you have required people to buy the product and removed it's cost from market forces you have in essence socialized the system and that's certainly not the answer.
The reason medicine got into bed with the insurance companies is simply that they were the lesser of two evils.

 

[MacGyver]

Some of you need to research the issue more instead of relying on the insurance companies to dictate their mantra to you.

http://www.dmregister.com/opinion/stories/c2125555/21716886.html

between 1988 and 1998, U.S. health-care costs increased 74.4 percent while malpractice premiums increased 5.7 percent.

New information in a national database that collects reports of every judgment and settlement paid in malpractice demonstrates just the opposite. An analysis of that data by a consumer-advocacy group reveals malpractice payouts decreased by 8.2 percent between 2001 and 2002. Meanwhile, doctors" premiums didn't go down.

http://albany.bizjournals.com/albany/stories/2003/04/21/daily34.html

In 2002, according to federal figures, the number of malpractice awards in New York stood at 1,841 and payments totaled $640.8 million. This is down from 2,084 awards and a total payment of $686.4 million in 2001

http://www.pasenate.com/medmal/myths.htm

The number of $1 million-plus medical malpractice verdicts dropped by half in the last two years, from 44 to 22, while the total cost of these verdicts dropped by 75 percent, from $415 to $94 million. The number of malpractice claims in Pennsylvania rose by only 1.6 percent per year since 1995, from 957 to 1,045.

While Pennsylvania has 39,000 licensed doctors, there have been fewer than 3,000 malpractice pay-outs in the past six years. Eleven percent of doctors are responsible for 84 percent of medical malpractice pay-outs. Two percent are responsible for 41 percent of pay-outs.

Adjusted for inflation, the amount of money paid in jury awards and attorney fees has risen only gradually over the past 25 years. At the same time, medical malpractice premiums have spiked during downturns in the economy and dropped sharply during flush economic times.* While physicians are complaining of doubling and tripling of rates, the median medical malpractice payment in Pa. rose only 33 percent since 1997. At the same time, health insurance rates have risen 39 percent.** The Wall Street Journal concluded that insurance company business practices played a large role in the crisis.***

Massachusetts and Nevada, which have caps, have had large rate increases. The Los Angeles Times concluded that the evidence does not exist that caps work.* California has lower rates than the national average because of a mandatory 20 percent rate rollback in the mid-80s. Since then, California insurance rates have risen five times as fast as the national average.** An OB/GYN practicing in states with caps pays just three percent less a year in premiums than states without caps.***

Medical malpractice insurance costs account for about one half of one percent of total health care costs.* Medical malpractice premiums have increased 500 percent since 1975, while medical costs in general have increased 1000 percent during the same period.**

http://www.arkattorneys.com/tortreform.pdf

Up until 2001, St Paul had 20% of the national med-mal market. It dropped this type of policy as a result of mismanaging its reserves. The company set aside too much money in reserves to cover malpractice claims in the 80?s so it ?released? $1.1 billion in reserves flowing through its income statements showing as ?profits?. Seeing these profits many new smaller insurance companies came into St Paul?s market; competition began and everyone started slashing prices, between ?95 and ?00 rates fell so low that they became inadequate to cover malpractice claims and many companies collapsed. St Paul eventually pulled out, creating a ?crisis? for doctors to get malpractice coverage.

"I don?t like to hear insurance company executives say it?s the tort system-it?s self inflicted.? Donald J. Zuk, chief executive of Scpie Holdings Inc., a leading malpractice insurer in California. ?There is clearly an opportunity now for companies to price gouge-and it?s happening?.But I think companies are overreacting, because they see a window in which they can do it.? Jeanne Hollister, consulting actuary, Tillinghast-Towers Perrin, quoted in, ?Avoid Price Gouging, Consultant Warns?, National Underwriter, January 14, 2002

Taking into account medical care services inflation, rates in 2000 were 32.5% less than they were in 1991. Rates would have to be increased 48.10% to bring the 2000 rates to the 1991 price level. This is caused by a lack of planning on behalf of insurance companies and an attempt to get as much business in new premiums during the 90?s in order take advantage of the ?float? (income made off of premiums from investment between time of payment of premium to time of payment of claim).

 

[edinOH]

I for one am about as capitalist as they come. I think the concept of providing a service better and more efficiently than the other guy is what makes our economy run. I think the profit motive is the best way to achieve this.

However, when it comes to a necessary "service" (and I use that term loosely) such as malpractice insurance, I think we as physicians would be better off essentially "self insuring" as a group with the goal being sufficient coverage for possible malpractice rather than profit. There is no need to add the exta expense of profit to the equation. In this instance, once this happens the inevitable result is the sentiment that if alittle profit is good, then more profit is better. By default, the insured are the only ones that can provide this profit since the only service or product provided is financial coverage against a future claim. Think of it along the same lines as joining a credit union. Since the members are essentially owners, they gain nothing by making money off each other.

 

[DrQuinn]

Originally posted by edinOH
I for one am about as capitalist as they come. I think the concept of providing a service better and more efficiently than the other guy is what makes our economy run. I think the profit motive is the best way to achieve this.

However, when it comes to a necessary "service" (and I use that term loosely) such as malpractice insurance, I think we as physicians would be better off essentially "self insuring" as a group with the goal being sufficient coverage for possible malpractice rather than profit. There is no need to add the exta expense of profit to the equation. In this instance, once this happens the inevitable result is the sentiment that if alittle profit is good, then more profit is better. By default, the insured are the only ones that can provide this profit since the only service or product provided is financial coverage against a future claim. Think of it along the same lines as joining a credit union. Since the members are essentially owners, they gain nothing by making money off each other.

Interesting thought. Never really thought about it that way... me likey.

One thing that is also overlooked by many physicians is the "naming of the experts." In some states, all you need is a physician SOMEWHERE or whatever specialty to say that you preached the standard of care.

It SHOULD be that the "expert" is in the same field as the "plaintiff." You should have an Emergency Medicine Physician speak against what the plaintiff, an Emergency Medicine Physician SHOULD have done. You can always have a pediatric anesthesiologist say that you should have used a 6.0 ETT instead of a 6.5............................ but standard of care is based on your colleagues, not the experts in other fields infringing on YOUR field.

The passing of that law throughout the states that don't have them woudl decrease the # of frivolous lawsuits... believe you me.

Q, DO

 

[MacGyver]

Quinn,

most states already have that provision--only medical doctors in the SAME SPECIALTY can serve as expert witnesses at trial.

Even so, there are many full time "experts" who make up to $800 an hour just for testifying in court cases. They testify for both plaintiffs and defendants to make even more money.

You do the math. You can work at home making $800 an hour, or you can drive to the hospital every day and get paid maybe $400 an hour at the most.

Being a medical expert and testifying against other doctors is just too lucrative to ignore, and therefore there are many docs who choose to stop practicing medicine and just do that for a living.

 

[DrQuinn]

Originally posted by MacGyver
Quinn,

most states already have that provision--only medical doctors in the SAME SPECIALTY can serve as expert witnesses at trial.

Even so, there are many full time "experts" who make up to $800 an hour just for testifying in court cases. They testify for both plaintiffs and defendants to make even more money.

You do the math. You can work at home making $800 an hour, or you can drive to the hospital every day and get paid maybe $400 an hour at the most.

Being a medical expert and testifying against other doctors is just too lucrative to ignore, and therefore there are many docs who choose to stop practicing medicine and just do that for a living.

Believe it or not, many states do NOT have that provision... especially here in the south. I am not sure which crisis states have it, but it should be on every state's agenda.

Q, DO

 

[droliver]

The testimony doesn't have to be from someone in the same field, but rather someone with expertise in some area that passes the "sniff test" for the court. ie. an orthopedist, plastic surgeon, or general surgeon who does hand might all be testifying on cases involving hand injury issues. Or a general surgeon, vascular surgeon, plastic surgeon, or Infectious Dz. doctor might testify on a diabetic foot infection, et...