MORE ON MALPRACTICE….Today comes word of yet another study showing that the rise in medical malpractice premiums has almost nothing to do with an actual increase in malpractice payouts. The study looks at the 15 biggest malpractice insurance companies and concludes that over the past five years payouts have gone up only slightly while premiums have skyrocketed. As a result:
Net payouts as a percentage of net premiums has declined from 69% to 33%.
Gross payouts as a percentage of gross premiums has declined from 68% to 32%.
Projected future payouts as a percentage of earned premiums has declined from 68% to 51%.
So has anything gone up? Of course. Since premiums have risen far faster than both payouts and projected payouts, cash surpluses have increased by a third and stock prices of the public companies have doubled. Life is sweet!
Needless to say, the insurance companies are flailing their arms and insisting that we ignore the man behind the curtain. Don’t fall for it. There have been endless studies using all sort of different methodologies, and they all come to the conclusion that malpractice payouts haven’t gone up very much while premium rates have. And for all their flailing, the insurance industry has never produced a comprehensive study of their own to rebut this ? even though they’re the ones who ought to have the easiest access to the raw data. Funny, that.
POSTSCRIPT: And a note to doctors: if you want to hate trial lawyers, go ahead. But this study should give you a pretty good idea of who’s really responsible for doubling your premiums last year.