Attorneys Say SB 1 Won’t Help; Legislation is Designed to Open Door for Lower Medical Malpractice Insurance Rates
Bowling Green Daily News (KY)
February 27, 2004

...

Last November the Americans for Insurance Reform, a coalition of over 100 consumer groups around the country, released a study of medical malpractice insurance from the 1970s through 2001. The study said two findings dispute the medical field’s claims that increasing insurance premiums are related to an increase in medical malpractice law suits.

“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. In fact, rather than exploding, inflation-adjusted payouts per doctor dropped from 2001 to 2002,” the study said. “Payouts (in constant dollars) have been essentially flat since the mid-1980s.”

It further said that insurance premiums rates relate to the rise and fall of the stock market and profitability of insurance companies, not an increased level of suits.

“Medical malpractice insurance premiums rose much faster in 2002 than was justified by insurance payouts. The 2002 hike is similar to the rate hikes of the past, which 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 the perception of how much they can earn on the investment ‘float’ (which occurs during the time between when premiums are paid into the insurer and losses paid out by the insurer) that doctors’ premiums provide them.”

For a copy of the complete article, contact AIR.