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New Data Refute Link Between Medical Malpractice Lawsuits and OB/GYN Insurance Premium Hikes

Feb. 23, 2004

New Data Refute Link Between Medical Malpractice Lawsuits and OB/GYN Insurance Premium Hikes

Payments in Obstetrics Lawsuits Are Declining; Awards are Keeping Pace with Medical Inflation

WASHINGTON, D.C. – Federal government data show that the number of payments and the monetary amount of payments made to victims of obstetrical malpractice declined over the past decade, casting substantial doubt on the assertion that lawsuits are responsible for obstetricians’ insurance premium increases, according to a Public Citizen analysis.

Public Citizen issued the analysis in advance of a U.S. Senate vote on Tuesday on legislation that would limit the ability of women and children to hold medical providers accountable for negligence. The bill, S. 2061, would arbitrarily cap the amount of non-economic damages available to malpractice victims at $250,000 when obstetrical or gynecological care is involved.

Key findings from the analysis of National Practitioner Data Bank (NPDB) records include the following:

  • The number of medical malpractice payouts made by OB/GYNs declined 13 percent from 1991 to 2002, dropping from 1,303 to 1,129. Moreover, the number of payouts declined 22 percent from 2001 to 2002 – the peak of the malpractice “crisis.”
  • The median malpractice payout made to individuals by OB/GYNs declined by 9 percent from 1991 to 2002 when adjusted for medical inflation. In 1991, the median obstetrics malpractice payout in the United States was $175,000. By 2002 it had risen 51 percent, to $265,000. But the cost of medical care services rose by 65 percent over the same period. Both consumer advocates and the insurance industry have pointed to heath care inflation as a major factor in pushing up malpractice awards in recent years.
  • The total amount of malpractice payouts by OB/GYNs has remained nearly flat over the past decade when adjusted for medical care services inflation. In 1991 the total amount paid to settle malpractice claims against OB/GYNs in the United States was $326 million. In 2002 the total of malpractice payouts was $557 million. Adjusted for medical care services inflation, the 2002 figure would be $336 million – a .03 percent increase. Total payouts declined by 21 percent from 2001 to 2002 (not adjusted for inflation).

“All the numbers show that the insurance premium increases over the past year are not tied to lawsuits,” said Joan Claybrook, president of Public Citizen. “The only number that correlates with the premium increases is the decline in malpractice insurers’ investment income.”

The Senate bill’s proponents claim that obstetricians’ insurance rates are rising because of malpractice awards to patients, but rate increases are far outstripping increases in awards. Even obstetricians in states where awards are capped faced premium increases of up to 54 percent last year, according to the Medical Liability Monitor newsletter. Many insurers charge obstetricians higher rates in states where damages are capped even though payouts for medical malpractice damages are substantially lower in those states than in states without caps. For instance, Northwest Physicians Mutual charges Los Angeles obstetricians twice the premium it charges OB/GYNs in Seattle — even though the malpractice awards in California are half as large, on average, as those in Washington state.

“The data are clear – the legal system is not the problem,” said Frank Clemente, director of Public Citizen’s Congress Watch. “Doctors and patients need to move beyond what we disagree about. We should develop patient safety programs that represent a win for both sides, rather than try to take away the legal rights of those who most need them.”

The NPDB is a U.S. government agency that collects reports of every judgment or settlement paid to malpractice victims throughout the country by insurance companies on behalf of doctors.

Click here to view the full report and other materials about the Senate legislation.