Saturday, January 17, 2004

Paying more for your liability insurance? If so, you're not alone as seen in this story in Medical Economics.

Malpractice premiums continued their dramatic rise last year, with no relief in sight for 2004. Rates in many states jumped more than 25 percent in 2003, and most carriers expect double-digit increases again this year. Even in states that showed no increase for 2003, many carriers have rate increases approved or pending for 2004, according to the latest survey conducted by Medical Liability Monitor, a newsletter that covers the malpractice insurance industry.

Not surprisingly, doctors in some of the biggest cities pay the highest premiums, with those practicing in the Miami area coping with the worst prices. Top rates for coverage there run more than $65,000 for internists, $227,000 for general surgeons, and nearly $250,000 for ob/gyns. Elsewhere, internists are paying as much as $50,000 in Detroit, $41,000 in Chicago (up 30 percent), $34,000 in Houston, and nearly $30,000 in Philadelphia (also up about 30 percent).

Even if liability insurance was fairly reasonable in your neighborhood, that may soon change:

Even in states with relatively modest premiums (like Connecticut, Missouri, New Jersey, New Mexico, and Tennessee) some insurers hiked rates for internists more than 50 percent. In the Virginia suburbs surrounding Washington, DC, one carrier raised rates for internists nearly 140 percent.

And you are going to probably get less for your premium, if you can get coverage at all:

Not only are doctors paying higher rates, many are getting less coverage for their money, or having trouble finding any coverage at all...... Faced with increased claims frequency and higher payouts, some companies are tightening eligibility requirements, eliminating discounts and dividends, restricting coverage, dropping physicians who have spotty records, or simply withdrawing entirely from certain states.

The story has several tables, one which gives high and low premiums in each state. So far with increases of 17-18 percent in Florida, and 15 percent in Texas for internists, tort reform is not providing relief yet. What concerns me is that the state held out as the example of award caps, California, had increases of 7 to 19 percent.

While some point out that payouts in medical liability claims are a small percentage of health care spending, the figure does not take into account the costs of defending cases that are dropped or found for the defendant. Whatever payouts are doing the increases in premiums, which cannot be passed on to the patient, are affecting the bottom line of many physicians.
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