September 15, 2005
High malpractice insurance premiums demonstrate need for tort reform
Medical malpractice premiums for some specialties in New York can exceed $100,000 in some areas of the state, according to a new analysis by Excellus BlueCross BlueShield insurance company.
“Medical malpractice rates for New York physicians are neither the highest nor the lowest in the country, but they continue to be an issue of concern,” said Dr. Martin Hickey, Excellus BCBS senior vice president for health care affairs. “It’s well established that fears of malpractice liability can lead physicians to expensive defensive medicine practices that don’t help the patient and waste precious resources.”
The analysis, “The Facts About NYS Medical Malpractice Coverage Premiums,” shows that there is more than a 400 percent disparity in premiums between an internist in Rochester ($5,642) and an internist in Long Island ($26,847).
“A similar differential exists for other types of physicians,” a release on the report said. “For example, a general surgeon’s premium rate in Rochester is $18,026, contrasted with a Long Island surgeon’s rate of $85,772; and obstetrician/gynecologists in Rochester may pay $30,084 while their Long Island counterparts face a standard rate of $143,148.”
The analysis found that typical malpractice rates for a general surgeon in New York ranged from $85,772 a year on Long Island to $18,026 a year in Rochester. By comparison, general surgeon malpractice rates were only $11,306 a year in Minnesota, and $17,003 in North Georgia—but ranged as high as $193,819 in Detroit and $277,241 in Miami.
According to the [Medical Liability Mutual Insurance Company], there were 932 physician medical malpractice claims closed in 2000 in New York, reflecting losses of $281.4 million for an average loss of $301,974 per case, the analysis said. "In 2004, there were nearly the same number of claims closed – 931 – but they reflect losses of $362.2 million for an average loss of $389,089 per case, or a 29 percent growth in costs during the five years."
The analysis found that new premium rates, effective July 1, 2005, rose by 7 percent.
“Few people understand the costs related to medical malpractice coverage, so we felt it was important to get the basic facts to the public to enhance any debates regarding malpractice,” said Mary Paris, Excellus BCBS health policy director.
“This analysis shows that the costs associated with practicing medicine are exorbitant in some parts of the state,” said Business Council President, Daniel B. Walsh. “And those exorbitant costs for medical professionals translate into higher health care costs for New Yorkers.”
The Business Council has long supported policy changes that would rein in the costs of medical malpractice for physicians and, in the process, reduce the burden that those costs place on all of society.
The Business Council has also consistently opposed bills designed to undo a key medical-malpractice reform enacted in 1985: a limit on contingency fees in medical malpractice cases.
Enacted as part of the 1985 Medical Malpractice Reform Act, the fee schedule for such cases allows lawyers to charge clients fees up to 30 percent of the first $250,000 recovered, gradually declining to 10 percent of any recovery over $1.25 million. With support from New York’s famously aggressive trial-lawyers’ lobby, state legislators regularly consider bills that would repeal this reform and reinstate lawyer-friendly contingency fees that give more money to attorneys and loss to victims.