The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

Americans for Insurance Reform released a study earlier this week showing that in recent years, doctor premiums and medical malpractice claims have overwhelmingly dropped, while the profits of the medical malpractice insurance industry have soared. Significantly, the study concludes that placing further limits on the liability of negligent doctors and unsafe hospitals would be unjustifiable, and would put almost no dent in our country’s health care costs.

AIR’s report, True Risk: Medical Liability, Malpractice Insurance and Health Care, is by Gillian Cassell-Stiga and Joanne Doroshow of the Center for Justice & Democracy, and actuary J. Robert Hunter, who is Director of Insurance for the Consumer Federation of America (CFA), former Commissioner of Insurance for the State of Texas, and former Federal Insurance Administrator under Presidents Carter and Ford.

In describing the study’s findings, Hunter said, “Thirty years of inflation-adjusted data show that medical malpractice premiums are the lowest they have been in this entire period. This is in no small part due to the fact that claims have fallen like a rock, down 45 percent since 2000. The periodic premium spikes we see in the data are not related to claims but to the economic cycle of insurers and to drops in investment income. Since prices have not declined as much as claims have, medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been remarkably profitable over the last five years. –AIR

The findings apply equally to states that have placed major tort restrictions on victims of medical malpractice and to states that have not.

The study adds that because medical malpractice premiums amount to less than 0.5% of overall health care costs, with medical malpractice claims amounting to 0.2% (yes, these are tiny decimals) of health care costs, limiting liability any more will simply not have a significant effect on these health care costs. “If Congress completely eliminated every single medical malpractice lawsuit,” it says, “including all legitimate cases, as part of health care reform, overall health care costs would hardly change, but the costs of medical error and hospital-induced injury would remain and someone else would have to pay.”

All of this only confirms the position we’ve been taking, which is that removing or further limiting medical liability would mean robbing patients of the only meaningful check and balance they have on the impossible monstrosity of a system that American health care has become. Limiting liability is not a way to save the country money, and it’s not fair for patients who are wrongfully injured or who lose their lives due to negligence.

Read AIR’s full study here.


  1. Gravatar for penny lane

    I can't wait to see how the Chamber of Commerce spins this. One way to reduce medical malpractice claims is reduce the amount of medical malpractice committed by just a handful of bad actors. AMA: Police you own and watch malpractice suits decline. While you're at it, sue your carriers for overcharging health care providers.

  2. Gravatar for John Mininno

    Finally, an ubiased objective study shows the true facts. The "Malpractice crisis" is pure fiction and always has been. Thanks for posting

  3. Gravatar for Jim O'Hare VP med mal claims
    Jim O'Hare VP med mal claims

    Claims should be compensated wuickly and fairly. To claim tha tInsurance companies specializing in med mal are healthy is dishonest. The big Gorilla = AIG is in the septic tank. Premiums are down, but doctors still go bare. A neuro surgeon or obstetrician routinely pay well over $100k for minimal coverage. I think Palm beach county in Fl has one , maybe 2 neurosurgeons. There are some counties with no obstetricians. Some doctors get premiums equal to the coverage just to save the included defense costs. Megasilly

    Provide a list of those companies that are doing great, sitting back fat and happy. Look at PRI or MLMIC in NY. In 1985 had a 2 bil surplus, now 200 mil. . You argue cost but neglect the price and the value obtained. Meritorious claims get paid but it costs way too much to get the patient compensated.

    The whole system needs to be retooled so that the injured party gets more than just 40% of the total cost of bringing the typical claim to conclusion. 60% of the money goes elsewhere. 60 trumps 40 and this is where the solution is. regards Jim

  4. Gravatar for Dan Frith

    Mike: Great post! Unfortunately, preventable medical mistakes keep happening over and over and over!


  5. Gravatar for James Cool


    Welcome back. I'm glad we get to go around again on this issue. I want to begin by addressing some data you have put out there and I will proceed on the assumption that your data is correct.

    You say that numerous professional insurers are losing money and provide evidence of declining surplusage as proof of this. Can you demonstrate that the deflated surplusage is the product of "frivolous claims" or defense costs rather than market fluctuations tied to the global economic collapse?

    You also suggest the system needs to be re-tooled to prevent recovery from being limited to 40%. I think we all agree to a point. The obvious answer is for insurers to make fair offers to patients who've been injured. If this is done at the early stage then the cost of defense never becomes a huge issue. Moreover, with respect to the 20-25% above attorneys fees which is absorbed by costs, stop fighting it when you know there is negligence. Much of these costs are tied to medical experts warring not over damages, but over standard of care disputes. If you know there's liability, quit waging the financial battle over it.

    You mentioned that a neurosurgeon pays 100k in med mal insurance premiums. This number makes most normal folks blush. It's a phenomenal amount of money. But, to be fair, this suggests neurosurgeons are making between 600-800k a year:

    How bad are we supposed to feel for doctors who are forced to give up a paltry 12.5% of their almost 7 figure income to ensure that the people they hurt with -their negligence- are properly compensated?

  6. Gravatar for jim O'Hare

    A few items:

    There is way too much med mal and 3% turns into a claim. Enormous insurance losses from that 3%. There is no money in chasing bona fide plaintiff claims by throwing defense costs at them. Only about 15% of all lawsuits get brought to trial and the Doc wins about 82% of those. So most get settled. Frivelous lawsuits are a mosquito as plaintiff firms regulate the cases they accept due to the costs involved.

    RE the premiums that doctors pay- Some high exposure docs cant find coverage- like ob's and neurosurgeons. some pay premiums equal to the limits of coverage. That 100k number was an example and not all neuro's make 800k/yr. There are many counties in the US w/o Ob's and neuros. Isnt that dangerous? Why aren't they there? My company is a writer in Fl since 2003 and has the 2nd oldest tenure. dozens of companies ahave come and gone. The leggislatures around the country limit what an underwriter can charge to cover the actuarial projections of loss.

    Med mal is not going away and the fat is 60% paid toothers than the injured. Courts are too slow, juries are not prepared to digest complexity, Docs do not get a jury of peers. The whole process needs to be changed to cut that 60% fat to a managable 25-30%. Saving billions for indemnity, healthcare, and surplus.

    There is very little balck and white in med mal. It is very subjective with thousands of shades of gray. Cut the fat and get to the meat of the matter. The forum and how we all currently do med mal stinks for everybody. regards Jim

Comments are closed.

Of Interest