Editore"s Note
Tilting at Windmills

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June 1, 2005
By: Kevin Drum

MALPRACTICE AGAIN AND AGAIN AND AGAIN....Just in case you haven't gotten the message yet, here's another study of medical malpractice that comes to the same conclusion as practically every other study done in the past couple of years: the medical malpractice "crisis" is mostly an invention of insurance companies and their friends in Congress. As the chart below shows, malpractice payouts have grown at about the same rate as medical costs in general. In 1992, malpractice payouts amounted to about 0.3% of total healthcare spending and 1.2% of physician and clinical spending. In 2002, the numbers were....0.3% and 1.2%.

(And yes, before anyone asks, these figures are for both court judgments and out-of-court settlements. The data comes from mandatory reporting of malpractice payments to the National Practitioner Data Bank, which has been required by federal law since 1990. It includes everything.)

The basic numbers are pretty simple: the number of total judgments per physician has gone gradually down, while the total value of payouts has gone gradually up. However, the increase has been small, and matches the overall growth in medical costs.

You can argue about whether malpractice costs should grow at the same rate as overall medical costs or not, but it's a tiny argument, not an excuse for crisis mongering. In fact, what's most striking about the numbers is that growth in payouts has been steady and slow. There haven't been any spikes, and certainly no excuses for sudden 100% increases in insurance premiums.

Analysts on all sides of this debate agree that reform of the malpractice process would be a good idea. But for the most part, the skyrocketing premiums we've seen over the past couple of years are the result of insurance company incompetence and greed, not actual increases in malpractice payouts. Until everyone figures this out, there's not much chance of making any real progress.

Kevin Drum 12:36 PM Permalink | Trackbacks

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