Myth #5: Tort Reform Will Lower Physicians' Insurance Rates.
Tort reforms are passed under the guise they will lower physicians’ liability premiums. Not true!
While insurers do pay out less money when damages awards are capped...they do not pass the savings along to doctors by lowering premiums. There is little variance in premium levels between states that cap damages and states that do not. In fact, in 2009 the average liability premium in states without caps on damages was lower than the average premium in states with caps on damages.
Even the "industry experts" admit the myth is untrue:
Sherman “Tiger” Joyce, president of the American Tort Reform Association, admitted to Liability Week that tort reform measures do not reduce insurance premiums, saying, “We wouldn’t tell you or anyone that the reason to pass tort reform would be to reduce insurance rates.”
Victor Schwartz, general counsel of ATRA, told Business Insurance that, “[M]any tort reform advocates do not contend that restricting litigation will lower insurance rates, ‘and I’ve never said that in 30 years.’”
Dennis Kelly of the American Insurance Association (AIA) has said, “We have not promised price reductions with tort reform.” In addition, an AIA press release stated: “Insurers never promised that tort reform would achieve specific premium savings...”
My Take: I hope our readers will tell me where I am wrong in discussing the "5 Myths of Medical Malpractice"...I don't think I am wrong but am willing to hear from the other side.
Showing posts with label medical malpractice virginia. Show all posts
Showing posts with label medical malpractice virginia. Show all posts
Thursday, December 2, 2010
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #5
Myth #5: Tort Reform Will Lower Physicians' Insurance Rates.
Tort reforms are passed under the guise they will lower physicians’ liability premiums. Not true!
While insurers do pay out less money when damages awards are capped...they do not pass the savings along to doctors by lowering premiums. There is little variance in premium levels between states that cap damages and states that do not. In fact, in 2009 the average liability premium in states without caps on damages was lower than the average premium in states with caps on damages.
Even the "industry experts" admit the myth is untrue:
Sherman “Tiger” Joyce, president of the American Tort Reform Association, admitted to Liability Week that tort reform measures do not reduce insurance premiums, saying, “We wouldn’t tell you or anyone that the reason to pass tort reform would be to reduce insurance rates.”
Victor Schwartz, general counsel of ATRA, told Business Insurance that, “[M]any tort reform advocates do not contend that restricting litigation will lower insurance rates, ‘and I’ve never said that in 30 years.’”
Dennis Kelly of the American Insurance Association (AIA) has said, “We have not promised price reductions with tort reform.” In addition, an AIA press release stated: “Insurers never promised that tort reform would achieve specific premium savings...”
My Take: I hope our readers will tell me where I am wrong in discussing the "5 Myths of Medical Malpractice"...I don't think I am wrong but am willing to hear from the other side.
Tort reforms are passed under the guise they will lower physicians’ liability premiums. Not true!
While insurers do pay out less money when damages awards are capped...they do not pass the savings along to doctors by lowering premiums. There is little variance in premium levels between states that cap damages and states that do not. In fact, in 2009 the average liability premium in states without caps on damages was lower than the average premium in states with caps on damages.
Even the "industry experts" admit the myth is untrue:
Sherman “Tiger” Joyce, president of the American Tort Reform Association, admitted to Liability Week that tort reform measures do not reduce insurance premiums, saying, “We wouldn’t tell you or anyone that the reason to pass tort reform would be to reduce insurance rates.”
Victor Schwartz, general counsel of ATRA, told Business Insurance that, “[M]any tort reform advocates do not contend that restricting litigation will lower insurance rates, ‘and I’ve never said that in 30 years.’”
Dennis Kelly of the American Insurance Association (AIA) has said, “We have not promised price reductions with tort reform.” In addition, an AIA press release stated: “Insurers never promised that tort reform would achieve specific premium savings...”
My Take: I hope our readers will tell me where I am wrong in discussing the "5 Myths of Medical Malpractice"...I don't think I am wrong but am willing to hear from the other side.
Tuesday, November 30, 2010
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #4
Myth #4: Malpractice Claims Drive Up Doctor's Medical Malpractice Insurance Premiums.
There is little correlation between malpractice payouts and malpractice premiums paid by doctors. Researchers at the National Bureau of Economic Research (NBER) reported that, “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.” Similarly, Americans for Insurance Reform (AIR) conducted an analysis of the relationship between insurance payouts and premiums charged to doctors and found that, “[n]ot only was there no ‘explosion’ in lawsuits, jury awards or any tort system costs to justify the astronomical premium increases that doctors have been charged in recent years. These rate increases were rather driven by the economic cycle of the insurance industry, which has been driven by the decline in interest rates and the return on investments.
This insurance cycle is at the heart of the medical malpractice debate, but few people understand how it works. There are two main sources of income for insurers: underwriting income – the amount of premiums they don’t give back in payouts, and investment income - the money they make investing the premiums. When investment income is down, insurers must make up the difference by increasing underwriting income which they do by increasing premiums.
And just how hard hit are the insurance companies who insure our doctors? An analysis by the American Association for Justice (AAJ) of the 2008 annual financial statements filed by the 10 largest malpractice insurers found that the average profits of these companies are higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period.
Medical malpractice insurers have underestimated profits and overestimated losses in part to justify new legislation to restrict the rights of those injured by medical negligence.
There is little correlation between malpractice payouts and malpractice premiums paid by doctors. Researchers at the National Bureau of Economic Research (NBER) reported that, “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.” Similarly, Americans for Insurance Reform (AIR) conducted an analysis of the relationship between insurance payouts and premiums charged to doctors and found that, “[n]ot only was there no ‘explosion’ in lawsuits, jury awards or any tort system costs to justify the astronomical premium increases that doctors have been charged in recent years. These rate increases were rather driven by the economic cycle of the insurance industry, which has been driven by the decline in interest rates and the return on investments.
This insurance cycle is at the heart of the medical malpractice debate, but few people understand how it works. There are two main sources of income for insurers: underwriting income – the amount of premiums they don’t give back in payouts, and investment income - the money they make investing the premiums. When investment income is down, insurers must make up the difference by increasing underwriting income which they do by increasing premiums.
And just how hard hit are the insurance companies who insure our doctors? An analysis by the American Association for Justice (AAJ) of the 2008 annual financial statements filed by the 10 largest malpractice insurers found that the average profits of these companies are higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period.
Medical malpractice insurers have underestimated profits and overestimated losses in part to justify new legislation to restrict the rights of those injured by medical negligence.
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #4
Myth #4: Malpractice Claims Drive Up Doctor's Medical Malpractice Insurance Premiums.
There is little correlation between malpractice payouts and malpractice premiums paid by doctors. Researchers at the National Bureau of Economic Research (NBER) reported that, “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.” Similarly, Americans for Insurance Reform (AIR) conducted an analysis of the relationship between insurance payouts and premiums charged to doctors and found that, “[n]ot only was there no ‘explosion’ in lawsuits, jury awards or any tort system costs to justify the astronomical premium increases that doctors have been charged in recent years. These rate increases were rather driven by the economic cycle of the insurance industry, which has been driven by the decline in interest rates and the return on investments.
This insurance cycle is at the heart of the medical malpractice debate, but few people understand how it works. There are two main sources of income for insurers: underwriting income – the amount of premiums they don’t give back in payouts, and investment income - the money they make investing the premiums. When investment income is down, insurers must make up the difference by increasing underwriting income which they do by increasing premiums.
And just how hard hit are the insurance companies who insure our doctors? An analysis by the American Association for Justice (AAJ) of the 2008 annual financial statements filed by the 10 largest malpractice insurers found that the average profits of these companies are higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period.
Medical malpractice insurers have underestimated profits and overestimated losses in part to justify new legislation to restrict the rights of those injured by medical negligence.
There is little correlation between malpractice payouts and malpractice premiums paid by doctors. Researchers at the National Bureau of Economic Research (NBER) reported that, “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.” Similarly, Americans for Insurance Reform (AIR) conducted an analysis of the relationship between insurance payouts and premiums charged to doctors and found that, “[n]ot only was there no ‘explosion’ in lawsuits, jury awards or any tort system costs to justify the astronomical premium increases that doctors have been charged in recent years. These rate increases were rather driven by the economic cycle of the insurance industry, which has been driven by the decline in interest rates and the return on investments.
This insurance cycle is at the heart of the medical malpractice debate, but few people understand how it works. There are two main sources of income for insurers: underwriting income – the amount of premiums they don’t give back in payouts, and investment income - the money they make investing the premiums. When investment income is down, insurers must make up the difference by increasing underwriting income which they do by increasing premiums.
And just how hard hit are the insurance companies who insure our doctors? An analysis by the American Association for Justice (AAJ) of the 2008 annual financial statements filed by the 10 largest malpractice insurers found that the average profits of these companies are higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period.
Medical malpractice insurers have underestimated profits and overestimated losses in part to justify new legislation to restrict the rights of those injured by medical negligence.
Sunday, November 28, 2010
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #3
Myth #3: Doctors are Leaving the Practice of Medicine.
The number of practicing physicians in the United States has been growing steadily for decades. In 2007, the most recent year for which data are available, there were 941,304 physicians in the U.S., nearly 20,000 more than the year before.
Not only are there more doctors, but the number of doctors is increasing faster than population growth. In 2007, the number of physicians per 100,000 population is at an all-time high of 307. The increase of physician numbers compared to population growth climbed steadily for decades. There are now twice as many physicians per 100,000 population as there were in the 1960's.
Despite the cries of physicians fleeing multiple states, the number of physicians increased in every state. All of the above statistics come from the American Medical Association.
The number of practicing physicians in the United States has been growing steadily for decades. In 2007, the most recent year for which data are available, there were 941,304 physicians in the U.S., nearly 20,000 more than the year before.
Not only are there more doctors, but the number of doctors is increasing faster than population growth. In 2007, the number of physicians per 100,000 population is at an all-time high of 307. The increase of physician numbers compared to population growth climbed steadily for decades. There are now twice as many physicians per 100,000 population as there were in the 1960's.
Despite the cries of physicians fleeing multiple states, the number of physicians increased in every state. All of the above statistics come from the American Medical Association.
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #3
Myth #3: Doctors are Leaving the Practice of Medicine.
The number of practicing physicians in the United States has been growing steadily for decades. In 2007, the most recent year for which data are available, there were 941,304 physicians in the U.S., nearly 20,000 more than the year before.
Not only are there more doctors, but the number of doctors is increasing faster than population growth. In 2007, the number of physicians per 100,000 population is at an all-time high of 307. The increase of physician numbers compared to population growth climbed steadily for decades. There are now twice as many physicians per 100,000 population as there were in the 1960's.
Despite the cries of physicians fleeing multiple states, the number of physicians increased in every state. All of the above statistics come from the American Medical Association.
The number of practicing physicians in the United States has been growing steadily for decades. In 2007, the most recent year for which data are available, there were 941,304 physicians in the U.S., nearly 20,000 more than the year before.
Not only are there more doctors, but the number of doctors is increasing faster than population growth. In 2007, the number of physicians per 100,000 population is at an all-time high of 307. The increase of physician numbers compared to population growth climbed steadily for decades. There are now twice as many physicians per 100,000 population as there were in the 1960's.
Despite the cries of physicians fleeing multiple states, the number of physicians increased in every state. All of the above statistics come from the American Medical Association.
Friday, November 26, 2010
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #2
Myth #2: Malpractice Claims Drive Up The Costs of Medical Care.
The costs associated with medical malpractice are a tiny fraction of health care costs. According to the National Association of Insurance Commissioners, the total spent defending claims and compensating victims of medical negligence in 2007 was $7.1 billion—just 0.3% of health care costs. Any restriction on compensation to victims would thus reap a very small savings.
As a result, those focused on limiting patients’ legal rights (insurance companies and medical associations) have turned to the concept of of indirect costs, namely “defensive medicine.” They claim that doctors are frightened into ordering hundreds of billions of dollars worth of unnecessary tests to avoid litigation.
This argument also fails to find facts to support it. First, much of what can be identified as “defensive medicine” is motivated not by liability concerns but by the desire to generate more income. Secondly, the threat of liability may actually improve health care outcomes. Researchers have found that a 10 percent increase in malpractice costs actually reduces mortality by 0.2 percent, leading the researchers to conclude that, “while the mortality benefits of malpractice may be quite modest, these seem more likely than not to justify its direct and indirect health care costs.”
The costs associated with medical malpractice are a tiny fraction of health care costs. According to the National Association of Insurance Commissioners, the total spent defending claims and compensating victims of medical negligence in 2007 was $7.1 billion—just 0.3% of health care costs. Any restriction on compensation to victims would thus reap a very small savings.
As a result, those focused on limiting patients’ legal rights (insurance companies and medical associations) have turned to the concept of of indirect costs, namely “defensive medicine.” They claim that doctors are frightened into ordering hundreds of billions of dollars worth of unnecessary tests to avoid litigation.
This argument also fails to find facts to support it. First, much of what can be identified as “defensive medicine” is motivated not by liability concerns but by the desire to generate more income. Secondly, the threat of liability may actually improve health care outcomes. Researchers have found that a 10 percent increase in malpractice costs actually reduces mortality by 0.2 percent, leading the researchers to conclude that, “while the mortality benefits of malpractice may be quite modest, these seem more likely than not to justify its direct and indirect health care costs.”
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #2
Myth #2: Malpractice Claims Drive Up The Costs of Medical Care.
The costs associated with medical malpractice are a tiny fraction of health care costs. According to the National Association of Insurance Commissioners, the total spent defending claims and compensating victims of medical negligence in 2007 was $7.1 billion—just 0.3% of health care costs. Any restriction on compensation to victims would thus reap a very small savings.
As a result, those focused on limiting patients’ legal rights (insurance companies and medical associations) have turned to the concept of of indirect costs, namely “defensive medicine.” They claim that doctors are frightened into ordering hundreds of billions of dollars worth of unnecessary tests to avoid litigation.
This argument also fails to find facts to support it. First, much of what can be identified as “defensive medicine” is motivated not by liability concerns but by the desire to generate more income. Secondly, the threat of liability may actually improve health care outcomes. Researchers have found that a 10 percent increase in malpractice costs actually reduces mortality by 0.2 percent, leading the researchers to conclude that, “while the mortality benefits of malpractice may be quite modest, these seem more likely than not to justify its direct and indirect health care costs.”
The costs associated with medical malpractice are a tiny fraction of health care costs. According to the National Association of Insurance Commissioners, the total spent defending claims and compensating victims of medical negligence in 2007 was $7.1 billion—just 0.3% of health care costs. Any restriction on compensation to victims would thus reap a very small savings.
As a result, those focused on limiting patients’ legal rights (insurance companies and medical associations) have turned to the concept of of indirect costs, namely “defensive medicine.” They claim that doctors are frightened into ordering hundreds of billions of dollars worth of unnecessary tests to avoid litigation.
This argument also fails to find facts to support it. First, much of what can be identified as “defensive medicine” is motivated not by liability concerns but by the desire to generate more income. Secondly, the threat of liability may actually improve health care outcomes. Researchers have found that a 10 percent increase in malpractice costs actually reduces mortality by 0.2 percent, leading the researchers to conclude that, “while the mortality benefits of malpractice may be quite modest, these seem more likely than not to justify its direct and indirect health care costs.”
Wednesday, November 24, 2010
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #1
Myth #1: There are too many frivolous medical malpractice lawsuits filed in America.
There is an epidemic of medical negligence...not lawsuits. Two studies of the patient safety movement have shown that not only are hundreds of thousands of patients injured every year in the health care system, but very few of them sue.
According to the Institute of Medicine, 98,000 people die in hospitals each year as a result of preventable medical errors, costing the health care system $29 billion in excess costs. Hundreds of thousands more suffer non-fatal injuries. Despite the massive number of medical injuries, medical malpractice lawsuits are uncommon. According to researchers at Harvard, only one in eight people injured by medical negligence file a malpractice claim.
Further, the number of medical negligence filings has steadily declined in the last decade, as has the amount paid out in jury verdicts and settlements. According to the National Center for State Courts (NCSC), tort cases comprise only about six percent of the civil caseload. Medical negligence cases account for just three percent of the tort subsection. The number of medical negligence filings dropped eight percent between 1997 and 2006.
Finally, researchers at the Harvard School of Public Health examined over 1,400 closed medical negligence claims and found that 97 percent of claims were meritorious and that 80 percent involved death or serious injury. According to the authors, “portraits of a malpractice system that is stricken with frivolous litigation are overblown.”
There is an epidemic of medical negligence...not lawsuits. Two studies of the patient safety movement have shown that not only are hundreds of thousands of patients injured every year in the health care system, but very few of them sue.
According to the Institute of Medicine, 98,000 people die in hospitals each year as a result of preventable medical errors, costing the health care system $29 billion in excess costs. Hundreds of thousands more suffer non-fatal injuries. Despite the massive number of medical injuries, medical malpractice lawsuits are uncommon. According to researchers at Harvard, only one in eight people injured by medical negligence file a malpractice claim.
Further, the number of medical negligence filings has steadily declined in the last decade, as has the amount paid out in jury verdicts and settlements. According to the National Center for State Courts (NCSC), tort cases comprise only about six percent of the civil caseload. Medical negligence cases account for just three percent of the tort subsection. The number of medical negligence filings dropped eight percent between 1997 and 2006.
Finally, researchers at the Harvard School of Public Health examined over 1,400 closed medical negligence claims and found that 97 percent of claims were meritorious and that 80 percent involved death or serious injury. According to the authors, “portraits of a malpractice system that is stricken with frivolous litigation are overblown.”
THE FIVE MYTHS OF MEDICAL MALPRACTICE: MYTH #1
Myth #1: There are too many frivolous medical malpractice lawsuits filed in America.
There is an epidemic of medical negligence...not lawsuits. Two studies of the patient safety movement have shown that not only are hundreds of thousands of patients injured every year in the health care system, but very few of them sue.
According to the Institute of Medicine, 98,000 people die in hospitals each year as a result of preventable medical errors, costing the health care system $29 billion in excess costs. Hundreds of thousands more suffer non-fatal injuries. Despite the massive number of medical injuries, medical malpractice lawsuits are uncommon. According to researchers at Harvard, only one in eight people injured by medical negligence file a malpractice claim.
Further, the number of medical negligence filings has steadily declined in the last decade, as has the amount paid out in jury verdicts and settlements. According to the National Center for State Courts (NCSC), tort cases comprise only about six percent of the civil caseload. Medical negligence cases account for just three percent of the tort subsection. The number of medical negligence filings dropped eight percent between 1997 and 2006.
Finally, researchers at the Harvard School of Public Health examined over 1,400 closed medical negligence claims and found that 97 percent of claims were meritorious and that 80 percent involved death or serious injury. According to the authors, “portraits of a malpractice system that is stricken with frivolous litigation are overblown.”
There is an epidemic of medical negligence...not lawsuits. Two studies of the patient safety movement have shown that not only are hundreds of thousands of patients injured every year in the health care system, but very few of them sue.
According to the Institute of Medicine, 98,000 people die in hospitals each year as a result of preventable medical errors, costing the health care system $29 billion in excess costs. Hundreds of thousands more suffer non-fatal injuries. Despite the massive number of medical injuries, medical malpractice lawsuits are uncommon. According to researchers at Harvard, only one in eight people injured by medical negligence file a malpractice claim.
Further, the number of medical negligence filings has steadily declined in the last decade, as has the amount paid out in jury verdicts and settlements. According to the National Center for State Courts (NCSC), tort cases comprise only about six percent of the civil caseload. Medical negligence cases account for just three percent of the tort subsection. The number of medical negligence filings dropped eight percent between 1997 and 2006.
Finally, researchers at the Harvard School of Public Health examined over 1,400 closed medical negligence claims and found that 97 percent of claims were meritorious and that 80 percent involved death or serious injury. According to the authors, “portraits of a malpractice system that is stricken with frivolous litigation are overblown.”
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