Re-igniting the medical malpractice overhaul debate, a new study by Dartmouth
College researchers suggests that huge jury awards and financial settlements for
injured patients have not caused the explosive increase in doctors' insurance
The researchers said a more likely explanation for the escalation is that malpractice
insurance companies have raised doctors' premiums to compensate for falling
The Dartmouth economists studied actual payments made to patients between 1991
and 2003, the results of which were published yesterday in the journal Health
Affairs. Some previous studies have examined jury awards, which often are reduced
after trial to comply with doctors' insurance coverage maximums or because the
plaintiff settles for less money to avoid an appeal. Researchers found that
payments grew an average of 4 percent annually during the years covered by the
study, or 52 percent overall since 1991, but only 1.6 percent a year since 2000.
The increases are roughly equivalent to the overall rise in healthcare costs,
said Amitabh Chandra, lead author and an assistant professor of economics at
the New Hampshire college.
''One of the things we know about medical malpractice payments is that they're
usually made when an injury occurred," he said. ''The injury has to be
treated. And if it's more and more expensive to treat injuries, then that will
be reflected in payments."
Meanwhile, malpractice insurance premiums for internists, general surgeons,
and obstetricians have skyrocketed since 2000, jumping 20 to 25 percent in 2002
alone. In Massachusetts, ProMutual Group, which covers about one-third of the
state's doctors, raised rates an average of 11 percent last year, 20 percent
in 2003, and 12.5 percent in 2002. Some specialists, such as obstetricians,
now pay almost $100,000 annually for their malpractice insurance. ProMutual
executives said they will not raise premiums this July, primarily because increases
in the number of claims have slowed.
''It's not payments that's causing this," Chandra said. ''The simple explanation
that comes to mind is the underwriting cycle. If they're making less money from
the investment side of things, it's going to cause [insurance companies] to
The study's conclusions are sure to generate praise from some malpractice lawyers
and outrage from many doctors and insurance company executives, who argue that
jury awards are out of control and the solution is a cap on noneconomic damages
for plaintiffs, commonly referred to as ''pain and suffering" awards.
The American Medical Association, a national organization based in Chicago
that represents doctors, and the Physician Insurers Association of America,
a coalition of malpractice insurers based in Maryland, are lobbying for a nationwide
$250,000 cap, and President Bush has made a cap on noneconomic damages a key
component of his malpractice reform proposal.
Another study published in the same issue of Health Affairs found that doctors
are gravitating toward states that cap malpractice awards, particularly obstetricians.
Between 1975 and 2000, the number of obstetricians increased 40 percent in states
that enacted caps during the 1980s, compared to an 8 percent rise in states
Doctors and insurance executives criticized the Dartmouth study on payments
for several reasons.
''We don't think this study will have much effect because there are too many
other studies that contradict it," said Dr. Donald Palmisano, past president
of the medical association and a surgeon in New Orleans.
He said other studies have found that doctors' malpractice premiums increased
more quickly in states without caps on pain and suffering, bolstering the group's
position that caps are a solution to the problem.
Dartmouth researchers drew their data from the National Practitioner Data Bank,
to which insurers are required to report payments made on the behalf of physicians.
The physician insurers association as well as the federal government have criticized
the data bank because payments to hospitals are not reported -- unless a payment
also was made to a doctor in the case. Because of this, Chandra acknowledged,
his study could have slightly underestimated payments.
Dr. Barry Manuel, ProMutual's chairman and a surgery professor at Boston University,
said that study's authors also did not account for the rising cost of defending
malpractice cases. Last year, ProMutual paid $97.4 million to settle claims,
plus another $20.5 million to defend unsuccessful claims and $11 million to
defend claims in which the patient was successful in winning a monetary settlement
''What we've seen at our company is there's been some moderation in frequency
of claims but the severity continues to rise," Manuel said.
Marc Breakstone, a Boston malpractice lawyer, called the Dartmouth study a
''beacon of truth. This absolutely proves that the propaganda of the AMA and
the PIAA is just that, it's nothing more than histrionics," he said.