National Consumers League

New Study Finds Medical Malpractice Insurance Premiums have Minimal Effect on Health Care Costs


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By Amos Budde, NCL Public Policy Intern Americans for Insurance Reform, a coalition made up of Consumer Federation of America, ConsumerWatchdog.org and nearly 100 other public interest organizations, released a major study Wednesday on the state of the medical malpractice insurance industry.  It found that insurance rates for doctors have dropped significantly while the medical malpractice insurers are earning record profits.  The conclusion is that the cost of medical malpractice insurance is not crippling doctors and that large profits are going to the insurance industry. Specifically, the study found, adjusting for inflation, that:

  • Medical malpractice premiums are nearly the lowest they have been in 30 years.
  • Medical malpractice claims are down 45 percent since 2000.
  • Medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been very profitable over the last five years.
  • In states that have substantially limited consumers’ ability to go to court for medical malpractice, the insurance premiums for doctors are basically the same as in other states.
As the health care debate heats up, there will be an increased effort to reduce the costs of health insurance.  This study suggests that medical malpractice is not a significant cause of skyrocketing health costs.  In fact, medical malpractice claims constitute one-fifth of one percent of annual health care costs in the country, according to the report.  Cutting costs through medical malpractice reform is not likely to result in significant savings in health care reform legislation. When people get hurt by medical errors, doctors and hospitals should be held liable.  According to one study by the Institute of Medicine, 400,000 preventable injuries occur each year related to bad prescriptions alone.  There are severe examples of people losing a limb or suffering permanent brain damage due to a doctor error. The Americans for Insurance Reform (AIR) is a national coalition supporting reforms to lower insurance rates, increase coverage, and make the insurance industry more consumer-friendly.