Posted on 02/22/2005 5:11:05 PM PST by neverdem
So... the insurance company rates seem to have risen very strongly with payouts. The fluctuation does not refute the underlying trend.
Total B.S. In 20 states there is a premiums crisis, doctors are packing up and leaving the states. Top neurosurgeons across the land are refusing to perform spinal surgery or surgery on children, and sending them to inferior University hospitals. THESE DOCTORS AREN'T IMAGINING THIS CRISIS. IT IS REAL! I deal with these doctors every single day as a consulting. It is disgraceful, and the attorneys must be stopped.
Yet another editorial masquerading as a news story at the New York Times. Not much of an attempt to disguise it though.
I found their presentation of the other side of the story to be somewhat lacking. Oh wait, they didn't present the other side of the story!
FReepmail me if you want on or off my health and science ping list.
Since when did the New York Slimes hire attorneys to write their articles?
What states are these fleeing doctors going to?
While the picture is designed to make it look like insurance rates are climbing faster than payouts, the charts actually show the opposite. Payouts have gone from <1 to 6 on the chart (up 7X) while rates rose from 3 to 10 (a little more than 3x)...
I freely admit I am probably out of my league here, but the article and the chart have me thinking "Yeah, and...?" The NYT seems to be saying that the insurers making money is the key to the problem: Once they're forced to make less, the costs will come down.
California, Wisconsin, Indiana and Colorado all have favorable malpractice climates.
Locally a representative of a major malpractice insurer got up in front of a crowd and told them that there is no crisis. The insurer then dropped the entire neurosurgical department at the local university.
Ping to the dark side. ;)
The fact is that premiums have to reflect what the claims will be in the future, since it takes several years of premiums to accumulate the $ to pay claims.
Yes and no...
While the article talks about national "trends", it is important to realize that there is a movement underfoot to limit damage awards...so saying that nationally the rate of premium increases is "slowing" may be due to the fact that a number of states have already enacted malpractice reform.
In my mind, from the insurers I've talked to, limiting awards for pain and suffering introduces more surety to insurance companies about potential payouts...and that makes the market more predictable. A more predictable market will in all likelihood bring back some previous malpractice providers that stopped writing coverage because the profit margins did not support the risk they were assuming with no cap to potential damages. An increase in malpractice writers WILL decrease rates for physicians simply by increasing the competition among the various carriers.
This will not however solve the entire problem, since insurance companies expect a certain return on their risk based assets, and if the investment markets still offer sub-par returns (which will be determined by the insurers), someone is going to pay to make up hte difference betweeen what they expect and what they receive on their investment of premiums.
"limiting awards for pain and suffering introduces more surety to insurance companies about potential payouts...and that makes the market more predictable. "
That makes a lot of sense. Predictability seems to be a major asset when it comes to insurance.
Thanks again.
Galt's Gulch
It's all the unnecessary surguries.
Caps on damage awards have almost zero effect on rates. The insurance companies are sticking it to Doctor's, not the lawyers.
Neurosurgeons aren't refusing to perform spinal surgies because of premiums. It is because they are so likely to get sued if something goes wrong on a high-risk procedure.
All surgery is unnecessary until it's YOUR surgery that you need or want. Then, remarkably, it's "necessary".
You are correct, to a degree...
Yes, the insurance carriers ARE sticking it to Doctor's, and the reasons for that ARE varied and include that the markets right now are not providing the insurer's needed rate of return on invested premiums. That will change over time.
But it is also due to the fact that insurer's CAN stick it to Doctors because the number of insurers writing malpractice insurance has significantly declined, as some that wrote insurance with reasonable margins saw their investment income dry up and faced an uncertain risk due to moronic jury awards. In effect, the lawyers are sticking it to the insurers, and then the insurers turn around and either stick it to the Doctors or recently, leave the business.
Capping damage awards will to some degree improve the environment such that more insurer's may be willing to underwrite policies and an increase in the number of underwriters will increase competition and reduce rates.
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