Medical Malpractice Premiums

Conservatives seem to think that reforming the medical malpractice system will fix everything that ails the health care system. The logic goes something like this: Doctor X has to pay a bunch of money for his malpractice premiums, so he’s motivated to recoup that money–and moreover, he’s very concerned about what will happen to those premiums should he happen to be subjected to a lawsuit, so he practices “defensive medicine” to make sure that all his bases are covered. (As an aside, no one ever seems to talk about the potential for defensive medicine to produce harm through over-treatment.) Most health policy experts, however, don’t see much potential to lower health care costs through tort reform. What you’re most likely seeing is the GOP–who gets tremendous financial support from the physician lobby–taking a stance that will help that group at the expense of the Democrats who get tremendous financial support from the trial lawyers’ lobby.

I’m not going to go into the various peer reviewed literature on the weak malpractice-health care costs link, because I’ve already done that. Instead, I wanted to share a resource with those of you who might be inclined to look at it, and overwhelm the rest of you with one of the busiest charts you’re likely to encounter. The resource is historical data on medical malpractice insurance premiums for all states for the years 2000 through 2008 and is furnished by the Medical Liability Monitor Survey. You can take a look to see just how much rates vary by geographic location (a lot), physician specialty (a lot more), and time (mixed results).

But, because many of you won’t explore the site, I created a chart that shows the highest and lowest malpractice premiums reported for internists, general surgeons, and OBGYNs in the state of North Carolina. You’ll see a few things: First, there’s often (but not always) quite a range between the lowest and highest premiums within a specialty. It kind of makes you wonder if the actuaries just pick numbers out of a hat. Second, there is a clear difference in premiums according to specialty. This difference makes sense for the most part, with internists facing much lower premiums than general surgeons, and OBGYNs paying more than either group. The more likely you are to encounter an adverse outcome in your field, the more you can expect to pay. Awards are often higher when the birth of a child is involved, because juries take into account the resultant damages, and a newborn has more to lose over their remaining lifetime than a 50-year old. Finally, you’ll note that premiums haven’t just climbed onward and upward. I think this is interesting. It’s probably the result of new insurers entering and exiting certain markets, and may well be affected by certain insurers paying out large claims in a given year, but what it doesn’t do is show the same steady rise as health care expenditures. That doesn’t mean defensive medicine plays no role in rising health care costs, but it is a bit curious. Anyway, enough of my rambling…..here’s the eye-popping chart, which you may need to click to see entirely. (Advil recommended immediately after viewing).

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