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So-Called Insurance Crisis Not Caused by Lawsuits

Medical Malpractice Insurance Problems Due to Economic Cycle

January 31, 2003 -- The medical malpractice insurance crisis in West Virginia is caused by the economic cycle, and not by excessive lawsuits, according to a recent report by the consumer group Public Citizen. Frequent medical errors and a lack of doctor oversight increase costs and threaten the quality of health care in West Virginia, the report concludes.

The study found that:

  • The cost of medical negligence to West Virginia's patients is high, especially when measured against the cost of malpractice insurance to West Virginia's doctors.
  • Government data show that the median amount of medical malpractice awards in West Virginia has decreased, even as the cost of health insurance has increased.
  • Large malpractice verdicts in West Virginia are decreasing.
  • At the height of the purported malpractice "crisis," the number of licensed physicians in West Virginia actually increased slightly.
  • "Repeat offender" physicians are responsible for the bulk of malpractice costs. About 9.3 percent of doctors who have paid multiple malpractice claims are responsible for 62.2 percent of all payments.
  • Repeat offender doctors suffer few consequences in West Virginia. Only 25.5 percent of those doctors who made five or more malpractice payments were disciplined by West Virginia's State Board of Medicine; only 14.3 percent of doctors who made 10 or more malpractice payments were disciplined.
  • Insurance costs are increasing overall, not just for malpractice. The spike in medical liability premiums was caused by the insurance cycle, not by "skyrocketing" malpractice awards.
  • Insurer mismanagement compounded the problems. For example, under priced premiums, reckless cash-flow policies, and ill-fated involvement with Enron and asbestos subsidiaries forced one major carrier to stop offering medical malpractice insurance.

"If medical boards are unwilling or unable to seriously discipline doctors with multiple malpractice payouts, the terrible human and financial costs will continue to lead to preventable deaths and injuries," commented Public Citizen President Joan Claybrook. "These repeat offenders are a significant factor in the malpractice situation facing the state today."

Similar Analysis of Medical Malpractice Problems in Arkansas

In another recent study, Public Citizen concluded that the medical malpractice "crisis" in Arkansas, as in West Virginia and the rest of the country, is not a long-term problem nor has it been caused by the legal system (Medical Misdiagnosis in Arkansas, January 27, 2003). Rather, it is a short-term problem triggered by a brief spike in medical malpractice insurance rates for some physicians, according to the group.

Highlights of the Arkansas Public Citizen report include:

  • Arkansas doctor's liability premiums are among the lowest in the nation.
  • Government data shows that large malpractice award payments have been the rare exception in Arkansas.
  • Government data show that malpractice payments in Arkansas have increased at a slower pace than national medical costs.
  • Arkansas' cumulative median malpractice payment has remained less than the national average.
  • The number of Arkansas malpractice lawsuits filed in 2002 was less than in the preceding years.
  • The number of doctors in Arkansas has been increasing.
  • As in the case of West Virginia, repeat offender physicians are responsible for the bulk of malpractice costs, but suffer few consequences.

California Caps on Damages Have Not Lowered Premiums

In California, caps on damages in medical malpractice cases have not accomplished the goal of lower insurance premiums (see Medical Malpractice Fibs and Facts, Consumer Attorneys of California). Instead, premiums have steadily risen since the 1975 enactment of the $250,000 non-economic damages cap under the Medical Injury Compensation Reform Act (MICRA).

The effect of the California damage cap has been to deny individual victims of medical malpractice the chance to receive adequate damages based on the unique facts of their cases. The fallout from medical malpractice to a family is not a "one-size-fits-all" circumstance.

Solutions to the Medical Malpractice Problems

According to Public Citizen, the solution to the medical malpractice insurance problem lies in reducing medical errors. In addition to effective doctor discipline, states should require hospitals and other health care providers to institute meaningful risk prevention programs. Hospitals should implement measures to curb errors, such as using computers to order and track prescriptions, addressing the nursing shortage, and reducing the long hours of medical residents. Also, insurance risk should be spread, reducing the number of classifications of doctor specialties.

For more information from Public Citizen about solutions to medical malpractice problems, see Doctors, Insurers Wrong About Medical Malpractice Crisis. If you have suffered a medical injury and believe you were the victim of medical negligence, please feel free to contact us at Brayton Purcell concerning your legal options. We have almost 20 years of experience in the medical malpractice field.

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