Medical Malpractice and Rising INsurance Costs
...g to Babula (2002), obstetricians are bearing the brunt of the rate jumps, some increasing to $200,000 from $40,000 annually, because they are liable for their infant patients for 18 years. Most doctors can only be held responsible for problems for up to two years. Another doctor has stopped doing deliveries and is just practicing gynecology to bring his insurance rates down. His rates were increasing to $225,000 from $46,000. According to Compare Insure USA (2003), to fend off litigation and cope with steep medical malpractice insurance premiums, doctors say they are being forced to practice defensive medicine. By practicing defensive medicine, doctors are ordering additional, sometimes unnecessary medical tests that insurers might be reluctant to pay for, but doctors want to protect themselves from lawsuits. In addition, doctors are deferring the hiring of new staff, or even downsizing staff, sparking patient backlogs and making it difficult for patients to get timely appointments. Insurance rates are rising because there are too many frivolous medical malpractice lawsuits and there is no cap on the amount of money juries can award for damages (Babula 2002). There are few states that do have a cap on the amount of money awarded by juries. California, for example, which has had a $250,000 cap on noneconomic damages since 1975, is one of the handful of states where rates are stable because losses are more predictable (Insurance Information Institute 2004). This issue has prompted state legislators around the nation to consider limiting the amount of money juries can award to victims of medical mistakes, and has set off an intense battle in Washington between doctors and lawyers over proposed federal caps. Another factor driving up prices is a reduced supply of available coverage as insurers exit the medical malpractice business because of the difficulty of making a profit (Insurance Information Institute 2004). Across the nation, insurance companies small and large are no longer offering new doctors coverage and others have stopped providing malpractice insurance altogether. This thinning of the market has allowed surviving insurance companies to become less competitive with their coverage, resulting in a sustainability of their prices and even an increase of cost. Doctors, lawyers and insurance companies each have an opinion on the issue. Doctors blame multi-million dollar jury awards on the increasing cost of coverage. They believe that the answer is limiting the amounts, or a cap, that juries can give plaintiffs. They would also like the state legislature to make it more difficult for people to file malpractice claims. In addition, they want the state to pay a larger share of the doctors’...