N.Y. doctors challenge liability insurance report
■ Study authors said doctors' fears of a crisis are unwarranted. Physicians say the report ignores other important factors.
By Amy Lynn Sorrel — Posted July 2, 2009
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A recent study suggests that the legal system is not to blame for New York's expensive medical liability premiums or access-to-care shortages. But physicians say the report paints an incomplete picture of the state's liability climate.
According to a June study from the consumer advocacy organization New York Public Interest Research Group, liability judgments and settlements in the state decreased about 10% from $822 to $743 million between 2006 and 2008. The report analyzed data between 1992 and 2008 from the federal National Practitioner Data Bank and found that the highest payouts in that period came in cases that involved the most serious injuries. Fifty percent of payments came from about 7% of doctors practicing in the state, while overall case filings remained relatively stable.
"A common-sense conclusion is that, in fact, New York's system is quite predictable," study authors wrote.
While payouts are important in determining medical liability insurance costs, the report ignored other factors, including rising defense costs and the impact of meritless claims, said Mo Auster, counsel for the Medical Society of the State of New York's government affairs office. In 2008, Medical Liability Mutual Insurance Co., one of the state's largest medical liability insurers, spent roughly $100 million defending claims, 70% of which resulted in no payouts, he said.
"That's an awful lot of money to spend when there's no liability," Auster said. "No one should be surprised the most serious injuries get awarded. But that doesn't necessarily mean there was negligence involved, and that's the problem. At the end of the day, the system often fails."
New York does not have a cap on noneconomic damages, but the MSSNY is advocating for other measures aimed at curbing unnecessary litigation and liability costs.
In 2008, the governor approved a freeze on medical liability rates, which are set by state insurance regulators. Before that, premiums jumped 55% to 80% over the prior five years, Auster said. The freeze is set to expire on June 30, and the medical society is lobbying for its continuance.
But researchers said doctors' concerns were unwarranted. They advocated that enhanced patient safety measures and insurance industry reform -- not tort reform -- are the solution to rising insurance expenses.
The report also disputed claims that such costs are driving doctors out of state and pointed to data from the Federation of State Medical Boards showing a 23% jump in the number of practicing physicians between 1997 and 2007.
Auster said the study did not account for the many doctors, such as ob-gyns, who have curtailed high-risk procedures because of the added liability threat and costs.