a 14 percent across-the-board rate hike for medical liability insurance on July
1, 2007, doctors raised a hue and cry that the increase threatened a crisis in
access to care because doctors could no longer afford to practice in New York
and would be leaving the state or otherwise restricting their medical practices. As in the past,
doctors again blamed the premium increases on skyrocketing claims and lottery
awards and demanded tort reforms that would cripple meritorious malpractice
claims by the victims of medical negligence.
Today Public Citizen released a report that exposes these claims of the
doctors as full blown, deliberate and obvious exaggeration: A
Self-Inflicted “Crisis:” New York’s Medical Malpractice Troubles Caused by
Flawed State Rate Setting and Raid on Rainy Day Fund. These
same claims have been made by doctors during each of the three cycles of rising
premiums that have occurred over the past thirty-plus years. Our report shows
that rising malpractice premiums are not the result of any escalation in the
frequency or severity in malpractice payments. The increase has nothing to do
with patients, lawyers, judges, or our courts. It reflects an insurance problem.
analysis of the best available New York data demonstrates that the
number of malpractice payments made on behalf of doctors in 2006 was at its
lowest point since 1991. The total amount of malpractice payments for doctors,
adjusted for inflation, was near or below fifteen year average in three of the
past five years.
The amount of malpractice litigation in New York has not changed appreciably
over the past eleven years. Thus, it is clear that the 14 percent increase in
premiums did not reflect a sudden or dramatic change in either malpractice
payments or litigation behavior.
In fact, the records of the Superintendent of Insurance show that the recent
rate hikes come after a period of abnormally low rate increases. During the
eight year period from July 1, 1995 through June 30, 2003, medical malpractice
premiums actually declined by an average of 1.4 percent per year. The average
rate hike since 1991 has been only 3 percent, less than half the rate of medical
Claims by the doctors that they can no longer afford to practice medicine in
New York and are leaving or restricting their practices are complete hyperbole.
The latest statistics show that New York ranks near the top among states in the
number of patient care physicians per 100,000 people with 339, compared to the
national average of 239. Only two other states – Massachusetts and Maryland –
along with the District of Columbia have higher physician/population ratios. The
number of obstetricians is keeping pace with the population of child-bearing-age
women and New York’s birth rate. The number of board certified specialists in
the important fields of anesthesiology, emergency medicine, internal medicine,
neurosurgery and surgery has also increased substantially over the past eleven
years. Currently, New York is training more doctors and fellows than any other
state and about 90 percent of those surveyed say they plan to practice in the
area where they trained.
The Superintendent of Insurance, unlike the doctors, cited solvency problems in the insurance industry as the reason for the rate
increases. To the extent solvency is a problem, the causes may be traced to the
intractable underwriting cycle that characterizes the entire property-casualty
insurance industry. Rate hikes appear when the underwriters for reasons of
competitive behavior and financial trends in the industry worry over the
adequacy of their reserves and raise rates in response. New York also
contributed to the present malpractice insurance problems when in the 1990s they
raided the reserves of the states high-risk medical liability fund to the extent
of $691 million. Now the chickens are coming home to roost for that unwise
diversion of rainy day funds.
As Tom Baker said in his recent book, The Medical Malpractice Myth: “These
are insurance problems, not tort problems, and they need insurance solutions.”
Doctors would be better advised to concentrate their efforts on reducing
avoidable medical errors rather than clamoring for tort reforms that deprive
those they kill and injure of the compensation they deserve. In 1999, the Institute of Medicine noted that medical errors kill
as many as 98,000 people in the U.S. every year and called on the nation to cut
such mistakes in half in the ensuing five years. Unfortunately, New York is
failing to make significant headway in reducing avoidable medical errors, and
may in fact be experiencing an increase in such errors. In 2005, the number of
adverse events exceeded their seven year average in ten of 22 categories
identified by NYPORTS and Medicare as adverse events.
New York needs to improve its oversight of doctors. Between September 1990
and December 2006, 6,186 doctors made two or more malpractice payments. This
small number of doctors is responsible for a whopping 71 percent of dollars paid
out on behalf of doctors in New York since September 1990.
Like Public Citizen, the New York’s Comptroller has called
for improved physician oversight. Needed action includes, enforcement of
existing guidelines, expanding criteria triggering investigation, proactive
identification potential incidents of misconduct, improving collection and
sharing of information with other agencies, completing investigations promptly
and the state should provide more funding for this oversight.
Lest we need reminding, in the words of Tom Baker,
a leading authority on insurance and law:
“One very clear conclusion emerges from the research on medical
malpractice and medical malpractice lawsuits: The real medical malpractice
problem is medical malpractice. It is not pretty to say, but doctors and nurses
make preventable mistakes that kill more people in the United States every year
than workplace and automobile accidents combined. Any research-driven approach
to medical liability reform must start with this fact firmly in mind.”
Originally post on Tort Deform.