A new study by Dartmouth College researchers suggests that huge jury awards and financial settlements for injured patients have not caused the explosive increase in doctors' insurance premiums.
The researchers said a more likely explanation for the escalation is that malpractice insurance companies have raised doctors' premiums to compensate for falling investment returns.
The Dartmouth economists studied actual payments made to patients between 1991 and 2003, the results of which were published yesterday in the journal Health Affairs. Some previous studies have examined jury awards, which often are reduced after trial to comply with doctors' insurance coverage maximums or because the plaintiff settles for less money to avoid an appeal. Researchers found that payments grew an average of 4 percent annually during the years covered by the study, or 52 percent overall since 1991, but only 1.6 percent a year since 2000. The increases are roughly equivalent to the overall rise in healthcare costs.
Malpractice insurance premiums for internists, general surgeons, and obstetricians have skyrocketed since 2000, jumping 20 to 25 percent in 2002 alone. In Massachusetts, ProMutual Group, which covers about one-third of the state's doctors, raised rates an average of 11 percent last year, 20 percent in 2003, and 12.5 percent in 2002. Some specialists, such as obstetricians, now pay almost $100,000 annually for their malpractice insurance.Another study published in the same issue of Health Affairs found that doctors are gravitating toward states that cap malpractice awards, particularly obstetricians. Between 1975 and 2000, the number of obstetricians increased 40 percent in states that enacted caps during the 1980s, compared to an 8 percent rise in states without caps.
Dartmouth researchers drew their data from the National Practitioner Data Bank, to which insurers are required to report payments made on the behalf of physicians. The physician insurers association as well as the federal government have criticized the data bank because payments to hospitals are not reported -- unless a payment also was made to a doctor in the case.