Reform required to control liability premiums: Senate must act now

Without tort reform, historically high medical liability insurance rates will continue to drive physicians out of practice.

Posted Nov. 21, 2005.

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Usually when a market shows signs of stabilization, it's a good thing. But if you're an ob-gyn in Dade County, Fla., paying $299,420 annually for medical liability insurance, or an internist in Cook County, Ill., paying $65,887 annually, there's not much cause for celebration.

According to the 15th annual Medical Liability Monitor rate survey, released in October, liability premiums did level in 2005. In fact, more than 81% of liability insurance executives surveyed agreed with that statement.

The data -- which were gathered through a poll that asked insurance companies what premium they were charging July 1 for their mature claims-made manual insurance rates with limits of $1 million/$3 million for ob-gyns, internists and general surgeons -- showed that about 34% of the reported rates were unchanged or had declined since last year.

It also revealed that the majority of rate increases in 2005 were between 0% and 14.8%. That's better than last year, when half of the rate changes were between 6.9% and 24.9%. And on top of that, only 8% of the reported increases were 25% or higher this year. That's markedly down from the 25% of increases that hit that level in 2004 and the 33% that fell into that category in 2003.

Although that is positive news for doctors who did enjoy those perks, the rates didn't level off for everyone. And where they are leveling off, they're often doing so at historically high levels.

In addition to the high rates in parts of Florida and Illinois, some ob-gyns, general surgeons and internists in North Carolina saw a 78% increase when their insurance bills arrived in the mail, the survey showed. That translated to some internists paying $22,418 this year, compared with $12,593 a year ago. It pushed ob-gyns and general surgeons' rates to nearly $95,000.

So where are physicians breathing a little easier this year?

Every insurance company in Texas that reported rates to the Medical Liability Monitor said rates are the same as or lower than in 2004. Rate decreases were as high as 10%.

There also is good news in California, where most rate increases were in the 5% to 6.5% range, with several companies reporting that their rates had not changed. In addition to the more moderate rate increases, those increases are based on smaller premiums to start with. For example, a Los Angeles ob-gyn is paying $63,000 annually, compared with the nearly $300,000 that some of those Dade County specialists are paying.

The thing California and Texas have in common? We've said it before and we'll say it again: proven medical liability reform in the form of $250,000 caps on noneconomic damages.

California has had reforms for decades, and the courts have upheld them. Rate increases there have been more stable than in other parts of the country, and doctors aren't paying exorbitant, sometimes cost-prohibitive, rates that have forced doctors in some states to close up shop or discontinue high-risk procedures.

Texas' law is just a couple of years old, and voters ensured that the courts couldn't overturn it by approving it as a constitutional amendment. Doctors there who were seeing steep increases at the beginning of this medical liability crisis are now enjoying rate decreases.

This is just more proof that the federal tort reform that includes a $250,000 cap on noneconomic damages is the proven solution to the current tort crisis.

The House has already passed a bill that meets that standard, a bill that President Bush has said he will sign if it is sent to his desk.

Now it's time for the Senate to step up and do its part to bring rate relief to states such as Illinois, Florida North Carolina and anywhere else the high cost of liability threatens access to care and unfairly burdens physicians. It's time that the annual list of liability rates be celebrated as the end to an out-of-whack tort system.

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