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Information on Escalating Malpractice Premiums

The next time someone tells you about escalating malpractice premiums and the enormous payments being made to people injured by medical negligence, here is some pertinent information.

The National Association of Insurance Commissioners just updated its statistics on direct premiums earned, direct losses incurred, direct defense and cost containment incurred, and loss and direct defense cost containment expenses ratios.

The direct losses incurred have dropped from a high of $8,459,389,539 in 2003 to $3,655,161,296 in 2011. Without factoring in inflation, that represents a drop of a whopping 56.8 percent during those eight years. The URL is:

http://www.naic.org/documents/research_stats_medical_malpractice.pdf.

Additionally the aggregate direct premiums earned, as shown on the page above, have decreased five years in a row, from $12,167,900,762 in 2006 to $10,296,112,512 in 2011. Thus, malpractice insurance premiums are not "skyrocketing" as opponents of the civil justice system claim. Despite the lower premiums, the loss ratios have fallen significantly. From a high of 126.83 percent in 2001, the last four years have ranged from 55.66 percent to 51.02 percent.

The payments reported to the National Practitioner Data Bank from 2001 through 2011 paint a similar picture, although the NPDB only includes payments incurred because of doctor, not hospital, negligence, so the numbers are somewhat lower than the NAIC numbers. The NPDB reports payments in 2004 of $4,397,780,000 and in 2011 of $2,820,910,000, a drop of 35.8 percent. The URL for the NPDB is:

http://www.npdb-hipdb.hrsa.gov/resources/npdbstats/npdbTableUS.jsp#Table2.

The NPDB statistics also show the number of payments for doctor negligence has declined ten years in a row. The numbers are:

2001 15,925

2002 14,978

2003 14,930

2004 14,304

2005 13,396

2006 11,677

2007 11,010

2008 10,533

2009 10,440

2010 9,458

2011 8,450

The number of payments in 2011 represents a reduction of 47 percent from the number of payments in 2001.

When you consider that there are approximately 1,503,323 people who die or are injured annually as a result of medical errors [The $17.1 Billion Problem: The Annual Cost of Measurable Medical Errors, Health Affairs, April 2011, 30:4], the number of people actually compensated is miniscule.

While politicians and people with an agenda never let facts get in the way of a good argument, when someone tries to tell you that your Seventh Amendment rights to a jury trial need to be curtailed because of "skyrocketing" malpractice verdicts and insurance premiums, tell them the truth. When injured people are not being compensated because they have no recourse in the justice system, the burden falls on all of us rather than the persons responsible for the injury

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