PIAA, NPDB Data Show Med-Mal Costs Still Rising

May 5, 2004

Data compiled from the physician owned and/or operated medical liability insurers that make up the Physician Insurers Association of America (PIAA) and the National Practitioner Data Bank (NPDB) indicate that medical malpractice claim payments have been drastically rising and are continuing to do so.

As a result the organization said, “a significant percentage of doctors are considering early retirement, reduction of services, or relocation to survive the current litigation crisis.” It also noted that “access to quality healthcare will be harder to come by as increasing medical liability insurance costs continue to siphon resources from the healthcare system and its patients.”

“The malpractice litigation system is in a state of crisis,” stated PIAA President Larry Smarr. “When you have a system in which half of all available money to pay victims of malpractice goes to legal costs and fees, something is definitely wrong. The U.S. medical malpractice tort system is inefficient and does not effectively compensate those it was designed to help.”

The survey found that “From 1999 to 2003, the Data Bank shows that total payments to plaintiffs has shot up over 30 percent — $3.69 billion in 1999 to $4.9 billion in 2003. At the same time, the number of claims submitted to the NPDB has remained relatively flat. Total payments for 2003 rose 8 percent from the previous year.

“PIAA data indicate that the average payment by doctors has jumped 40 percent between 1998 and 2002 — $232,156 in 1998 to $323,975 in 2002. Data Sharing research also shows that payments over $1 million have doubled in the past four years of collected data, and legal expense costs have risen almost 30 percent in the past five years.”

“Stability in the marketplace is best illustrated by the ability of companies to underwrite doctors, not temporary fluctuations in claim severity or frequency,” Smarr indicated. “National trends show a definite increase in claim costs, while simultaneously showing fewer insurers willing to risk insolvency in unstable markets.”

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