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April 7, 2003

New Study Debunks Claims of a North Carolina Medical Malpractice Insurance "Crisis"

Real Malpractice Crisis Involves "Repeat Offender" Doctors; Overall Lawsuit Filings and Malpractice Payouts Are Flat But Supply of Doctors Is Way Up, Study Finds

RALEIGH, N.C. – Contrary to claims made by the state’s medical lobbies, North Carolina is not experiencing a medical malpractice "crisis" caused by the legal system, according to a report released today by the consumer group Public Citizen. If there are temporary spikes in some medical malpractice premiums, they are caused by the cyclical economics of the insurance industry, not the legal system, the study concludes. The report also found that the small percentage of doctors who are responsible for a large portion of malpractice payouts to injured patients is the most significant, long-term medical malpractice "crisis" in North Carolina.

Among the study’s principal findings: The number of malpractice lawsuits filed in North Carolina in recent years has remained flat, when adjusted for population increases; monetary amounts of malpractice payouts per doctor have declined, when adjusted for inflation; the number of doctors practicing in North Carolina has dramatically increased; doctors in various specialties in the only two southern states with damage caps – Louisiana and Virginia – pay more or about the same, respectively, for malpractice insurance as North Carolina doctors pay; a small portion of North Carolina’s doctors is responsible for the bulk of malpractice payouts; and the state agency charged with policing bad doctors is one of the nation’s least effective oversight bodies.

The report was released on the eve of the North Carolina Medical Society’s state Capitol rally to demand enactment of draconian limits on patients’ legal rights, including a $250,000 cap on non-economic damages.

"Capping damages will only hurt those who have been most severely injured by health care provider negligence," said Public Citizen’s Congress Watch Director Frank Clemente, who released the report at the state Capitol. "The state legislature should enact measures to stop insurance company price spikes, not penalize patients who have already suffered from negligence."

According to Public Citizen’s report, Medical Misdiagnosis in North Carolina: Challenging the Medical Malpractice Claims of the Doctors Lobby:

  • Based on Institute of Medicine data, preventable medical errors cause 1,259 to 2,803 deaths in North Carolina each year. These errors cost residents, families and communities $486 million to $830 million annually in lost wages, lost productivity and increased health care costs. In contrast, medical malpractice insurance costs North Carolina’s doctors $159 million annually.

  • A small portion of North Carolina’s doctors is responsible for the bulk of malpractice payouts. According to the federal government’s National Practitioner Data Bank, just 3.2 percent of North Carolina’s doctors, each of whom made two or more payouts, are responsible for 42 percent of all medical malpractice payouts. Even more distressing, just 1 percent of the state’s doctors, each of whom made three or more payouts, are responsible for 20 percent of all medical malpractice payouts.

  • The number of malpractice lawsuits filed in North Carolina courts remained flat from 1998 to 2002, when adjusted for population growth and the increase in the number of doctors in the state. The number of filings rose from 556 in 1998 to 608 in 2002, an increase of 2.3 percent a year, according to the Administrative Office of the Courts. But, population and doctor growth averaged 1.7 percent and 2.8 percent a year, respectively.

  • When inflation is taken into account, the amount of money paid out per North Carolina doctor for malpractice claims has declined over the past decade, based on data from the National Practitioner Data Bank. Payouts per doctor in 1992 were the equivalent of $4,694 (in 2002 dollars) compared to $4,246 in 2001 (in 2002 dollars).

  • The number of doctors practicing in North Carolina jumped from 11,632 in 1992 to 16,392 in 2001, an increase of 40.9 percent, or 4.5 percent a year, according to the North Carolina Health Professions Data System. In comparison, the state’s overall population increased 2.1 percent a year from 1992 to 2001 – less than half the rate of increase of the doctor population. Significant increases occurred in specialties most at risk of being sued – neurosurgeons, OB/GYNs and general surgeons

  • Louisiana has one of the most extreme damage caps in the country, yet malpractice insurance premiums charged by the largest provider there are an average of 22 percent higher for various specialties than those of North Carolina’s largest provider, according to Medical Liability Monitor data.Virginia is the only other southern state that caps medical malpractice damages. A comparison of two malpractice insurance companies that provide coverage in both states shows that North Carolina doctors in various specialties are in the same general range with Virginia doctors when it comes to the premiums they pay. However, injured North Carolina patients received 65 percent more in compensation in 2001 than patients in Virginia ($165,000 versus $100,000).

  • The North Carolina Medical Board is among the nation’s least effective in disciplining doctors, ranking 45th among all states in the frequency with which it takes serious disciplinary actions against doctors for incompetence, misprescribing drugs, sexual misconduct, criminal convictions, ethical lapses or other offenses. "Repeat-offender" doctors suffer few consequences – only 15 percent of the state’s doctors who have made three or more malpractice payouts have been disciplined; only 18 percent of the state’s doctors who made five or more malpractice payouts have been disciplined.

"Long-term solutions to reducing malpractice insurance costs lie in reducing preventable medical errors," said Clemente. "Data show that the legal system is not the problem. There are too many medical errors and too much medical negligence, a lot of which could be prevented with stronger disciplining of the relatively few repeat offender doctors."

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