Malpractice premiums are frequently cited as a significant driver behind the consistent rise in the cost of health care in the United States. This claim is controversial.*Â In any event, a new study is of interest in this context.
The Wall Street Journal reports a study published in Health Affairs (subscription required), suggesting that malpractice premium rates have actually fallen slightly in Massachusetts over the past 15 years or so.
Researchers focused on premiums for policies that covered up to $1 million per claim and $3 million per year. In inflation-adjusted terms, the mean premium in 2005 was $17,810, down from $17,907 in 1990. The figures are based on policies sold by ProMutual, a state-regulated mutual insurer thatâ€™s a big player in Massachusetts.
But for the sliver of docs in specialties where the risk of being sued is especially high, rates were high to begin with, and they went up even more during the period. For the highest-risk group, which includes OBGYN, spinal surgery and major neurological surgery, the mean premium rose from $66,220 to $95,045.
The lead author, Marc Rodwin, is a lawyer and a professor at Suffolk University Law School in Boston.
Here is the article abstract:
Massachusetts has the fourth-highest median malpractice settlement payments for all states. The American Medical Association (AMA) declares it a crisis state. As a test case, we analyzed its premiums from 1975 to 2005. In 2005 mean premiums were $17,810 for the coverage level and policy type most frequently purchased. Most physicians paid lower inflation-adjusted premiums in 2005 than in 1990. Mean premiums increased in only three specialties comprising 4 percent of physicians: obstetrics, neurology, and orthopedistsâ€“spinal surgery. However, because of discounts and surcharges, in 2005 premiums within the three highest-risk specialties varied nearly threefold, and nearly one-third paid less than in 1990.
*Â Â According to a report by economists at the McKinsey Global Institute, while the U.S. tort system is a peculiar American phenomenon, it contributes little to the cost equation. When viewed from an economic perspective, â€œit is only a small contributor to the higher cost of health care in the United States.â€Â Â See, Accounting for the Cost of Health Care in the United States, McKinsey Global Institute (January 2007).