Medical Malpractice Premiums Lower in 2008

Medical Liability Monitor, which conducts an annual survey, recently announced that physician’s malpractice rates were lower 43% percent of the time. An additional 49.8% remained stable from 2007-2008. Merely 7.4% of the doctors surveyed reported any increase, and the overwhelming majority of those increases were very small, less than 10%. Needless to say, this is good news for the healthcare industry, and for patients as well.

The study was based on mature claims-made manual insurance rates for $1,000,000/$3,000,000 policies covering internists, general surgeons, and OB/GYN specialties. While this may not be applicable to every specialty, it certainly is representative of a trend.

“This year was the first in recent history when the overall average rate change showed a decline,” MLM’s Michael Matray stated, as he commented on the sharp difference between this year’s rates and the 20% increase experienced by the same group in 2003. MLM claims a -4.3% decrease between 2007 and 2008, and atrtributes it to a supposed soft market in physicians’ liability insurance over the past 3 years.

Another factor suggests a different cause. The report also notes that fewer companies withdrew services from states in 2008 than in 2007. To see this as competition returning to the market may be a miscomprehension. Physicians are also finding themselves less motivated to leave for less oppressive malpractice rates as well. These two combine to suggest that perhaps the tort reform legislations enacted within several states are working. Premiums are less because malpractice claims are less. More restrictive underwriting requirements may play a part in the overall picture, but credit should be given to medical malpractice tort reforms as well.

Finally, congratulations are in order to the physicians themselves, for their part in the reduction of claims and premiums. It’s obvious that they’re paying closer attention, and their efforts are making a difference. We applaud the practitioners’ efforrts, and those of all healthcare professionals, in making medical malpractice and healthcare more affordable.

Regardless of the cause, the entire industry has cause to celebrate this reduction in medical malpractice premiums.