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July 30, 2002

Medical Malpractice Premiums Not Only Rates to Increase, State Survey Shows; Other Types of Insurance Have Risen Too

Insurance Companies’ Poor Investments and Bad Decisions – Not Litigation –Caused Premium Increases

WASHINGTON, D.C. -- The focus of Senate Republican leaders and President Bush on rising medical malpractice insurance premiums is misguided because insurance premiums for homeowners, car and health insurance have also increased at about the same rate, according to a Public Citizen state-by-state study released today.

The study contends that doctors are victims of insurance companies that made bad investment and pricing decisions — rather than lawyers representing victims of medical malpractice. The study analyzes insurance rates in 21 states, showing that rate hikes are common in many types of insurance.

Public Citizen released the study and several fact sheets, and sent a letter to members of the U.S. Senate urging them to oppose an amendment offered by U.S. Sen. Mitch McConnell (R-Ky.) that would strip medical malpractice victims of their state-based rights to seek full compensation for deaths and injuries caused by malpractice. The amendment would not only insulate doctors from full accountability, it would also protect HMOs, hospitals, nursing homes and even drug and medical device companies for deaths and injuries caused by malpractice and defective products.

"In the wake of Enron, WorldCom, Tyco and other corporate scandals, it is outrageous that Congress is debating legislation that would reduce corporate accountability to the tens of thousands of people who are killed and injured by medical malpractice every year," said Joan Claybrook, president of Public Citizen. "It would be a terrible injustice to blame the 80,000 Americans who die each year from medical negligence — and the many thousands more who are injured — for industry practices."

"Blaming rising malpractice premiums on a litigation ‘crisis’ is a smokescreen by the insurance industry to cover for the industry's investment losses and price gouging," said Frank Clemente, director of Public Citizen's Congress Watch. "Nothing is happening with medical malpractice premiums that isn’t happening in other insurance arenas."

The states included in the study are Arkansas, California, Connecticut, Florida, Georgia, Louisiana, Maryland, Michigan, Missouri, Montana, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Washington, West Virginia and Wisconsin.

The research shows that medical malpractice insurance premiums for the riskiest specialties increased 10 percent from 2000 to 2001. Auto insurance premiums increased 8.4 percent, homeowners insurance premiums increased 8 percent and health insurance premiums increased 11 percent in that year.

Further, the number of claims per 100 doctors has remained surprisingly constant over the years. And the average medical malpractice payment for all claims closed was virtually flat from 1991 ($29,093) to 1996 ($29,504).

"Limiting patients’ rights to sue would not reduce health care costs," Clemente said. "The attempt to cut victims’ rights is yet another way the administration and Republicans in Congress are trying to help out their big business friends."

Click here for a copy of the report.

Click here to read the letter to the Senate, and for a related fact sheet, click here.

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