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NYT: Study Says Malpractice Payouts Aren't Rising (but insurer rates up)

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DeepModem Mom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 08:48 AM
Original message
NYT: Study Says Malpractice Payouts Aren't Rising (but insurer rates up)
Study Says Malpractice Payouts Aren't Rising
By JENNY ANDERSON
Published: July 7, 2005


....The high price of medical malpractice insurance is a notoriously nebulous and highly politicized subject. Insurers and doctors contend that the insurance is more expensive because of a surge in jury awards and settlements. Consumer advocates and their political allies assert that insurers have raised rates because they can, arguing that insurers' claims have slowed significantly while premiums have shot up.

A study to be released today by the Center for Justice and Democracy, a consumer advocacy group in New York, may add fuel to that debate. The study, compiled from regulatory filings by insurers to state regulators, finds that net claims for medical malpractice paid by 15 leading insurance companies have remained flat over the last five years, while net premiums have surged 120 percent.

From 2000 to 2004, the increase in premiums collected by the leading 15 medical malpractice insurance companies was 21 times the increase in the claims they paid, according to the study. (The net totals in the study are calculated after accounting for reinsurance.)

Of the 15 companies examined, 9 are mutual insurers owned by their policyholders, 3 have publicly traded stock but are part of larger conglomerates and 3 are publicly traded and focus primarily on medical malpractice. The stock prices of those three companies have each risen more than 100 percent since May 2002....

***

Insurance industry officials not only disagree with Mr. Angoff and the study, they discredit the methodology. They say that it is unfair to compare the premiums that insurance companies charge with claims paid, because it often takes 8 to 10 years for the claims to materialize, so companies have to set aside extra reserves....


http://www.nytimes.com/2005/07/07/business/07insure.htm...
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northzax Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 08:51 AM
Response to Original message
1. insurance rates have little to do with payouts
and much more to do with the company's investment portfolio. rates for everything held steady in the lat 90's, why? because the companies were making so much money from investments that they didn't need to raise rates. When the market tanks, the companies raise rates.

simple, really.
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Love Bug Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 08:54 AM
Response to Reply #1
3. That's very true, but
Ins cos always use payouts as the excuse to raise rates. As do politicians who use payouts as the excuse to legislate caps.
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Botany Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 08:55 AM
Response to Reply #1
4. Bingo!
Funny in states where they have had caps placed on damages no
drop in malpractice insurance rates.

The HMOs & insurances companies love bush ...... they are making out
like bandits!
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hadrons Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 09:16 AM
Response to Reply #4
6. Insurance Co. and Repukes in Texas sold docs on the need for a cap ....
and when they got it guess what ... the insurances companies raised their rates anyway
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Botany Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 09:23 AM
Response to Reply #6
7. I have a younger friend who is very repug ......
..... now he is starting to see that insurance companies are a problem too.
We pay more per capita then anybody else in the world for health care with
the smallest % covered by health insurance. It is just a scam.
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proud2BlibKansan Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 08:53 AM
Response to Original message
2. We need to hammer this
I am no expert, but it sure looks to me like the guilty party in this rising health care cost issue is the insurance industry. I have a bunch of nurses and a doctor in my family and they have been pointing their fingers at the insurers for a long time now.
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Cassandra Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 08:56 AM
Response to Original message
5. I was trying to tell a fellow Democrat this...
over last weekend and she refused to believe me. I hope she reads the Times (we're in NY so she probably does).
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KansDem Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 09:32 AM
Response to Original message
8. This sounds a lot like California's "Prop 13"
I was living in California in 1978. Here's how that scam went:

(actual exchange)
Them: "Oh, no. If 'Prop 13' doesn't pass, we'll have to move out of California! We won't be able to afford to live here; our property taxes are too high!"

Me: "But I rent. How will 'Prop 13' benefit me?"

Them: "Oh, 'Prop 13' will lower rents because landlords will pass on their savings to renters!"

Prop 13 passes...

Property taxes did go down but rents did not, and the person who made the statements quoted above bought a second home at Big Bear lake.
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progressivebydesign Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 10:43 AM
Response to Reply #8
11. And Prop 13 destroyed life in California.
Didn't change a thing for renters, but it made decent public facilities a thing of the past.
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KansDem Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 10:52 AM
Response to Reply #11
13. Tell me about it...
My last semester at SDSU cost $80 and some change (full load). That was 1975. Kids could go to a good state college/university and get a good education then. I hear now it's almost cost prohibitive...

And the person who made those comments in my previous post is STILL complaining about financial difficulty!

I hope it was worth it... :eyes:
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speedingbullet Donating Member (133 posts) Send PM | Profile | Ignore Thu Jul-07-05 09:37 AM
Response to Original message
9. Need for a Cap?
One of my law professors was giving statistics supporting this position 20 years ago. The big pushes for "malpractice tort reform' always, always coincide with a down stock market. Perhaps if we 'cap' jury awards we can also 'cap' insurance premiums.
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Debi Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 10:17 AM
Response to Reply #9
10. Or consider increasing premiums on those who use the insurance
Just like healthcare - my husband has been to the doctor 1x in the last three years (and insurance paid $10.00 for the visit, we paid the rest and for the Rx). Yet his insurance premium has gone up $50 - 75.00 a month each year. We pay $6,000.00 a year for healthcare coverage we don't use in fear of the 'big' health scare that could happen.
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mbperrin Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-07-05 10:47 AM
Response to Original message
12. MY old dad pointed out years ago that there must be reasons
insurance companies are always located in great tall buildings: 1) they can afford them because of the rates they charge, and 2) it keeps their boots out of the bullshit they stack up during claims denials!


Gee....companies don't have to pay, but they still raise rates, golly, how could that be? (Come down off the turnip truck, son, and nobody will get hurt.) ;)
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