Medical Malpractice Caps Fail to Control Rapidly Rising Premiums
Rapid increases in medical malpractice premiums remain unaffected by caps on medical malpractice awards for pain and suffering, according to a recent study conducted by Weiss Ratings. Weiss Ratings, a Florida based company that tracks the insurance industry, found that in 19 states implementing caps during the past 12 years, the medical malpractice premiums for physicians increased almost 50%. Median premiums rose to $30,246 in 2002 from $20,414 in 1991, although two of the 19 states did experience flat or declining medical malpractice premiums. Of the 32 states that do not have mandated caps, the median premiums rose only 35%, from $22,118 to $30,056 in the same period of time. Six of those 32 states had stable or declining medical malpractice rates.
“Tort reform has failed to address the problem of surging medical malpractice premiums,” concludes Martin Weiss, chairman of Weiss Ratings. “The escalating medical malpractice crisis will not be resolved until the industry and regulators address the other, apparently more powerful, factors driving premiums higher.”
These factors, according to Weiss Ratings, include the following: a 75% increase in medical costs since 1991; tighter underwriting standards due to declining investment income; higher vulnerability to financial difficulties in the medical malpractice insurance field than in other areas of insurance such as property and casualty insurance.
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