Group: Tort Reform Can Stop Malpractice Crisis
Southern Illinoisan
September 4, 2004


In states with caps, the median annual premium went up by 48.2 percent but, surprisingly, in states without caps the median annual premium increased at a smaller rate of 35.9 percent. Among the states with caps, only 10.5 percent experienced flat or declining med mal premiums. In contrast, among the states without caps, the record was actually better: 18.7 percent experienced flat or declining premiums.

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Americans for Insurance Reform rejects medical industry arguments, too.

"Contrary to what the insurance and medical lobbies have alleged, the years 2001 and 2002 saw no 'explosion' in medical malpractice insurer payouts or costs to justify sudden rate hikes," its "Medical Malpractice Insurance: Stable Losses/Unstable Rates 2003" report charges. "In fact, rather than exploding, inflation-adjusted payouts per doctor dropped from 2001 to 2002. Payouts (in constant dollars) have been essentially been flat since the mid-1980s.

AIR found that Illinois medical malpractice insurance premiums rose much faster in 2002 than was justified by insurance payouts and that 2002's dramatic hike was similar to the rate hikes of the past that occurred in the mid-1980s and mid-1970s and were not connected to actual payouts. "Rather, they reflect a weakened economy and losses experienced by the insurance industry's market investments and their perception of how much they can earn," it notes. "Not only has there been no real increase in lawsuits, jury awards or any tort system costs in recent years, but the astronomical premium increases that some doctors have been charged during periodic insurance 'crises' over this time period are in exact sync with the economic cycle of the insurance industry, driven by interest rates and investments."

For a copy of the complete article, contact AIR.