NCPA - National Center for Policy Analysis

Doctors Face Soaring Malpractice Premiums

December 4, 2001

Some physicians are seeing their malpractice insurance premiums increasing anywhere from 8 percent to 100 percent. As a result, some are dropping procedures that put them at risk of malpractice suits, moving to areas with lower rates or even retiring early.

  • Executives at the St. Paul Companies, the country's second largest underwriter of medical malpractice insurance, have notified virtually all customers who are obstetricians, general surgeons or emergency medicine doctors -- the three specialties most likely to be sued -- that their policies will not be renewed.
  • Rates for physicians insured by the company in 27 states have increased an average of 24 percent this year.
  • Tillinghast-Towers Perrin, whose clients include malpractice insurers, says doctors can expect rate hikes of 8 percent to 18 percent this year and next -- and well above 18 percent in some jurisdictions.
  • One six-member OB-GYB practice in North Carolina, whose insurance had been cancelled, found itself paying $277,000 a year for new coverage -- more than double what it had been paying.

Doctors in West Virginia and Philadelphia are reportedly hardest hit by the premium rate hikes.

Lawrence Smarr, president of the Physician Insurers Association of America -- a trade group of doctor-owned companies that insure about 60 percent of U.S. physicians -- sees tort reform as the cure. "The whole system is basically a lottery for the lawyers," he says. "They don't win often, but when they win, they win big," he adds.

Source: Rita Rubin, "Soaring Malpractice Premiums Stun Many Doctors," USA Today, December 4, 2001.

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