Medical Malpractice Myth #4

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The fourth medical malpractice myth concerns the relationship between malpractice cases and the cost of insurance premiums for doctors. This is a common belief among medical professionals that medical malpractice claims directly correlate to higher insurance premiums. However, the National Bureau of Economic Research has researched the issue and found there is no direct correlation between the two. They have concluded that “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.”

Perhaps more importantly the group Americans for Insurance Reform has found that “not only was there no ‘explosion’ in lawsuits, jury awards or any tort system costs to justify the astronomical premium increases that doctors have been charged in recent years. These rate increases were rather driven by the economic cycle of the insurance industry, driven by declining interest rates and investments.”

While medical malpractice claims insurers have complained about “financial crises” caused by medical malpractice lawsuits, their profits remain higher than most Fortune 500 companies. Former Missouri Insurance Commissioner Jay Angoff studied the issue and released a report entitled “No Basis for High Insurance Rates”. In it, Angoff concluded that malpractice insurance companies artificially raised doctors’ premiums and misled the public about the nature of medical negligence claims.

Jared Green
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