Reply #32: Malpractice Insurance

[exboyfil]

A quote from the the following:

http://www.insurancejournal.com/news/east/2009/08/12/102938.htm

Physicians in specialties like neurosurgery and obstetrics can pay $200,000 a year for malpractice coverage in New York, though consumer advocates note that others pay less than a quarter of that and many are insured by the hospitals where they work.

A recent report from the New York Public Interest Research Group on federal data showed 2,000 to 2,400 malpractice payments in New York each of the past 15 years, with payouts of $743 million in 2008.

The report said less than 7 percent of some 62,270 New York doctors accounted for half the total payouts.

Let me get this straight - malpractice premiums are $6.2B (assuming $100K/yr) but payouts are $743M. This is almost a ten to one ratio - where is the other money going? Even assuming the lower $50,000 figure, premiums would be $3.1B or 4.4X the actual annual payout. Another way to look at it is each doctor, on average, is paying $12K/yr. Why don't the doctors insure themselves in a pool??? It appears they are being raped by the insurance company. Of course I don't know what it costs to defend these suits and settlements that were not part of judgements.

Anybody a doctor or in the insurance industry that can explain it to me.