Just 10 years ago, malpractice insurance industry executives said their industry was hurting: Premium rates were increasing, losses were accumulating and the insurers were warning of yet another medical malpractice crisis.
Today, the industry is feeling much better.
Payments made to victims of medical malpractice are down, lawsuits filed against doctors and hospitals continue to plummet, and the industry in 2013 posted an underwriting profit for the eighth straight year, according to a May report by A.M. Best Co., an insurance company rating service.
Today's profits are partially the result of the industry's blowing its call at the beginning of the 21st century by putting millions of extra dollars into reserve to pay claims that never surfaced.
Critics charge it was an intentional move by the insurers so they could raise rates and support their argument that the nation was in the midst of a malpractice insurance crisis — which in turn led lawmakers to enact reforms such as capping the damages that can be paid in a medical malpractice lawsuit.
"They were intentionally over-reserving. This was completely predictable," said Joanne Doroshow, executive director of the Center for Justice & Democracy, a left-leaning national consumer rights organization. "There is a political element to this: Create a crisis, raise rates."
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