Study claims malpractice rates, not payouts, rising

Associated Press
Friday, July 8, 2005

Medical malpractice insurance rates rose dramatically during the past five years, but the amount insurers paid out in claims did not, according to a study from a consumer advocacy group.
The study, released Thursday by the Center for Justice & Democracy, found that malpractice rates increased by 120 percent from 2000 through 2004, while the amount of money paid in claims went up by 5.7 percent.
"This is wacky," said Jay Angoff, a former insurance commissioner in Missouri and the primary author of the study. "Now what's the insurance companies' defense to this?"
Researchers looked at annual statements filed with state insurance departments by the nation's 15 largest medical malpractice insurers.
The report also found that the leading insurers increased their surpluses - the money they have after setting aside what they will need to pay claims in the future - by a third.
"The extra cherry on top for the industry, and the extra knife in the gut for doctors, is not only did claims payments go down ... the companies also added to their surpluses," Angoff said.

Consumer advocates and some public officials said the study has the potential to recast the often bitter debate about who is responsible for rising malpractice rates: doctors, trial lawyers or the industry.
Connecticut Attorney General Richard Blumenthal called on the National Association of Insurance Commissioners to review the study, and suggest legislation.
Connecticut's legislature passed a bill this year that would require the state's insurance commissioner to approve most rate increase requests. That bill awaits the governor's signature.

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