Oklahoma Doctors Not Facing a Medical Malpractice Insurance Crisis, Public Citizen Report Shows
*This press release was revised April 27, 2004 to reflect new information.
April 22, 2004
Oklahoma Doctors Not Facing a Medical Malpractice Insurance Crisis, Public Citizen Report Shows
Patient Lawsuits Aren’t Responsible for Insurance Rate Spike,
Malpractice Awards Are Flat and There is No Evidence of a Doctor Exodus
WASHINGTON, D.C. – Contrary to claims made by the medical lobby, the state’s business community and their allies in the legislature, physicians in Oklahoma are not facing a “crisis” in medical malpractice insurance rates caused by a rash of patient lawsuits or skyrocketing jury awards, according to a Public Citizen report released today.
Data from government and insurance industry sources show that average medical malpractice payouts to individuals in Oklahoma have declined 16 percent in recent years when adjusted for medical services inflation; total malpractice payouts have increased only 2 percent a year, which just keeps pace with workers’ wage increases; and medical malpractice premiums are significantly lower in Oklahoma than in neighboring states. The report finds that a recent rise in rates that state doctors pay for malpractice coverage is a temporary spike caused by cycles in the insurance business – including underpricing of insurance policies in recent years by the dominant Oklahoma medical liability insurer, PLICO.
These findings contradict claims being made by those advocating a $300,000 cap on the amount injured patients can receive in non-economic damages, also known as “pain and suffering” damages. According to the Public Citizen report, such caps on damages do little to reduce the cost of insurance for doctors, while limiting a patient’s ability to hold a health care provider fully accountable for negligence.
“Oklahoma does not have a problem with medical malpractice lawsuits. Even the American Medical Association has declined to identify Oklahoma as a ‘crisis’ state,” said Frank Clemente, director of Public Citizen’s Congress Watch and an author of the study. “Oklahoma residents need to look beyond the scare tactics of the medical lobby and demand solutions that will reduce the incidence of medical malpractice and improve the quality of patient care.”
According to the 55-page report, Medical Misdiagnosis in Oklahoma: Challenging the Medical Malpractice Claims of the Doctors’ Lobby:
- Average payouts to individuals have decreased 16.1 percent for Oklahoma’s largest medical malpractice insurer, PLICO, when adjusted for inflation. Physicians Liability Insurance Co. (PLICO), which insures more than 80 percent of the state’s doctors, reports that its average medical malpractice payout in 1996 was $318,522. When adjusted for medical services inflation, its average payout in 2002 (the most recent year for which its statistics are available) was only $267,375 – a decrease of 16.1 percent. A similar finding – a 16.4 percent decrease in payouts in Oklahoma for all insurers from 1996 to 2003 – was confirmed by the federal National Practitioner Data Bank (NPDB), which records all medical malpractice payouts made by insurance companies on behalf of doctors.
- Just 3.6 percent of Oklahoma doctors are responsible for 43.4 percent of medical malpractice payouts, according to the NPDB. Each of these doctors made at least two medical malpractice payouts. Moreover, 1.3 percent of Oklahoma doctors, each of whom has made at least three payouts, have been responsible for 22.9 percent of all payouts.
- Large medical malpractice payouts have been infrequent in Oklahoma. Annually, an average of only 5.4 payouts of $1 million or more have been made on behalf of Oklahoma physicians since 1996, according to NPDB data. The annual number of million-dollar payouts on behalf of doctors was seven in 1996 and eight in 2003.
- Malpractice premium prices paid by Oklahoma general surgeons and Ob/Gyns have increased at rates slower – in many cases much slower – than in six bordering states. Since 1998, rates for Oklahoma’s general surgeons have increased 12.8 percent, and rates for its Ob/Gyns have increased 18.4 percent, according to Medical Liability Monitor. In comparison, general surgeons in neighboring states have paid rate increases from 24.1 percent to 219.6 percent during the same period. And Ob/Gyns in neighboring states have paid rate increases from 19.2 percent to 191.1 percent.
- The number of Oklahoma doctors rose 7.4 percent from 1995 to 2003. During these years, the number of licensed practicing physicians in Oklahoma increased from 6,252 to 6,713. Additionally, the annual number of new medical licenses issued in Oklahoma increased 13 percent from 1995 to 2003.
- Malpractice insurance costs comprise only 1.7 percent of Oklahoma physician expenses. According to the federal government’s Medicare actuary, Oklahoma doctors spend an average of only 1.7 percent of their practice incomes on malpractice insurance, compared with a nationwide average of 3.9 percent. This means Oklahoma doctors pay 56.4 percent less than the national average of practice income that goes to malpractice premiums.
- The real impact of medical malpractice in Oklahoma should be measured by the cost to patients and consumers, not the premiums paid by health care providers. Extrapolating from Institute of Medicine findings, we estimate there are 528 to 1,176 deaths in Oklahoma each year that are due to preventable medical errors in hospitals. The cost resulting from preventable medical errors to residents, families and communities is estimated at $204 million to $348 million each year. But the cost of malpractice insurance to Oklahoma’s health care providers is only $97.2 million a year.
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