MEDICAL MALPRACTICE….Atrios links today to a summary of Time magazine’s cover story this week about the medical malpractice crisis. Both the summary and the Time story itself claim that malpractice premiums actually rose faster in states with damage caps than in states without them.
This is true, but it turns out it’s only part of the story, which gets even more surprising when you see the whole picture. The report they cite is here, and it actually says two things:
States with caps did have lower growth in malpractice payouts: a growth rate of 37% between 1991 and 2002 compared to 71% for states without caps.
However, exactly the opposite was true for malpractice premiums. States with caps saw premiums grow 48% between 1991 and 2002, while states without caps saw premiums grow only 35%. So in states with caps, payouts went up more slowly but premiums went up more quickly.
UPDATE: OK, hold on a second. I just deleted the rest of the original post.
On reading the report more carefully, I now note that all these figures are for median payouts, which wouldn’t be affected at all by a few huge awards. I’m not sure what’s going on, but this is so obviously the wrong statistic to use in this case that there must be some kind of axe to grind here. I’m now very skeptical that this report is, as it claims, “not driven by a political ideology or industry-driven self-interest.”
What’s more, although Appendix 2 does indeed show that premiums have gone up only 35% in states without caps, there are several states with enormous increases and several with tiny increases, and it’s hard to see any correlation at all between median payout increases and median premium increases. This might be due to the use of medians, it might genuinely be due to different regulatory regimes, or it might be something else. Who knows?
Until further notice, I no longer believe anything in this report and I don’t think Time should have cited it. I’ll have more later if I can find any additional explanations.
UPDATE 2: By the way, this is why I hate this whole subject so much: it’s practically impossible to get reliable statistics. These guys had access to the raw data and all they had to do was calculate average payout per doctor on a state-by-state basis and compare it to premiums, which would have been even easier than calculating meaningless medians. But they didn’t, and no one else does either. Arggh.