Puzzle me this about mal practice and health care costs

[ThomWV]

An earlier thread prompts this question, its something I haven't seen discussed anywhere before. In the earlier thread it states that mal practice is responsible for about 1.5% of medical costs in this country. I recall seeing a higher number elsewhere, something more on the order of 3%, but still a low number. However I also recall that over the last decade there has been a continuing complaint from the medical profession that Mal Practice Insurance is running them out of of business. It is claimed that in some regions the cost of the insurance has not only made doctors scarce, in some specialties there are no doctors at all.

So I ask myself, how can the price of insurance against a potential liability that at most only represents a few percent of the total price of care be its major element of cost? How can that be unless doctors are really - and I mean Really! - being screwed on their mal practice insurance rates?

And in the end of course it is the patient who pays for everything.

[T Wolf]

1. Malpractice only "runs out of business" those doctors who are only in it for the BUSINESS.

Notice that they are not "run out of the practice of medicine - just the business.

True healers do not emphasize their own income.

[Warpy]

2. The only problems generated by malpractice insurance

are due to the insurance companies: first, the outrageously high cost of premiums to some specialties and second, the fact that the 5% of doctors who are responsible for 50% of the payouts year after year are neither dropped from the rolls nor policed by state licensing boards.

Doctors are being squeezed to death by those premiums and something definitely has to be done or specialties like OB-Gyn and anesthesia are simply going to cease to be available. Insurance companies got used to huge stock market gains in the 90s and simply shifted their need to generate ridiculous profit onto the backs of physicians.

The 5% of physicians who are accident prone or downright incompetent need to be policed out of patient care areas.

Both these things will go a long way to solving the malpractice "crisis."

The payouts to patients and families of patients are small potatoes. There are few large payouts, most of them being reduced on appeal.

[Crunchy Frog]

11. There should be a public option for malpractice insurance,

as well as for health insurance. That would be a start.

[Botany]

3. mal practice insurance costs that are run up by evil "trial lawyers" is a red ....

..... herring. In just about every state there are limits put on how much money a doctor can be sued for
and in not 1 state did these caps cause a decrease in the cost of mal practice insurance premiums.

[supernova]

4. That number is of the total $$

spent on healthcare, I thought.

However, if you're the Doc with a prohibative premium, then it can get dicey. As far as I know, one of the prime disciplines for price gouging in premiums is OBY/GYN.

But the primary fault lies with the insurance firms themselves. They jack up premiums on the docs to make up for stock market losses, just as they jack up premiums on patients.

Nice racket, huh?

[PDJane]

5. The reason for large premiums

And large payouts has partly to do with the fact that you have a private insurance system. That means that the pre-existing conditions crap bars someone who sues for life from a regular insurance plan. The really, really large payouts are few and far between, but they are meant to cover the cost of medical care for life. That's a lot of money!

And yes, there are about 5% of doctors who are repeat offenders. I am personally acquainted with someone who has been a victim of one of those doctors. She fights with her insurer constantly, and most often when she needs the care the most.

It's a ridiculous system.

[JustAnotherGen]

6. Much as supernova said

It's a racket practiced AGAINST our doctors (Malpractice Insurance) which hurts us. And those physicians who have never or will never make a mistake in their career . . . are punished for a few bad apples.

Here's a radical idea - Part of Health Care Reform (differening from Insurance/Public Option) - a co-op/public option for Physicians to buy into.

[customerserviceguy]

7. It's the fear factor

Let's say I can uncover a statistic that only one-tenth of one percent of drivers in a given area are given speeding tickets. I therefore conclude that enforcement of speeding laws is an insignificant part of the motivation of drivers, since it occurs so infrequently.

What I'm ignoring is the deterrent effect that the speeding laws and sanctions are having on the rest of the drivers. Surely, there will always be some who speed, and many of them will not be caught, but I would guess that the majority will operate within the limits of the tolerance of the highway speed laws. This will cost them minor amounts of time that they will have to take from some other place in their lives, but since they are hopefully trading safety for that time, the loss is either minimal or nonexistent.

What I'd like to see is a replacement of the whole malpractice system. A visit to the doctor should not be a lottery ticket for a lawyer out there who is looking to make a living out of something unfortunate happening to a patient. Even when there is fault, it takes many years for justice, and the result is more often than not accompanied by a gag order that protects the perpetrator.

A reasonable reform would be a government malpractice insurance agency, that automatically discounts premiums for doctors based on how many Medicare and Medicaid patients they take. Those patients would have to take their claims to an independent board, something like the Workers Comp boards that operate in just about every place I'm familiar with.

The first duty of those boards would be to provide remedial care and income support for a person with a claim. Then the results would be made public. People who are complaint-prone would have to be dealt with differently by doctors, and doctors who seemed to have a lot of complaints against them (by people who are not complaint-prone) would be avoided.

Such a system could restore specialties to places where they have vanished, such as obstetrics in rural areas.

[TreasonousBastard]

8. Several points...

First, you have to remember that every individual and business that ever had a bill of any kind is going to complain about it, and how it is destroying them. Taxes, phone bills, electric bills, insurance bills, the price of chicken breasts... Car and boat payments, for some unknown reason, are exempt from this rule, but I digress...

Insurance for some medical specialties is extremely high, and scaring some of them out of the business-- something about straws and camels' backs.

AFIK, obstetrics and neurosurgery are the specialties with the highest premiums, largely because they have the biggest potential for suits. Pretty much any time a birth goes wrong, the parents try to find a way to blame the doctor or hospital. Brain surgery goes wrong a lot of times, too, and, as with obstetrics, it often has little to do with whether or not the doctor actually did anything wrong. I don't know about neurosurgery, which happens in large hospitals, but I've heard of doctors dropping obstetrics from their practice, particularly if they are in a rural area and don't make that much to begin with.

I don't remember the exact numbers, but most malpractice suits are thrown out. It can be argued whether this is a good thing or not, because often as not either critical records are lost or the plaintiff can't find another doctor to testify to the malpractice. So much judgment is involved, and so many things can go wrong in any procedure, that you really have to make a solid case for preventable error.

In any event, even if the case is thrown out it still costs money. Defense lawyers and court fees get paid, reserves are set up, investigations are done... What most people don't realize is that the huge settlements and judgments don't count for much, since they are reinsured and the company makes separate deals with its reinsurers. In the good old days it was possible, albeit uncommon, for companies to make a small profit out of a huge loss.

Rates are normally set by a specific formula-- usually five years past losses plus an IBNR cost and an inflation factor set the loss cost. (That IBNR figure is the tough one for liability coverages-- it means "incurred but not reported" and is murder to calculate when you have claims that could come in 20 years later.) Then you play around with expenses, profits, reinsurance costs, what the competition is charging, and come up with a rate. The rate you come up with is rarely the rate you really want, since there actually is competition in the insurance business, believe it or not, and if your competition thinks you're smart and can make money at one rate, they figure they can take a chance at charging 5% less.

That's the way it worked when St. Paul was the largest malpractice underwriter and pretty much set the standards. Since then, others have come in with less expertise and some have made a mess of things. One NJ company tried to expand and almost went out of business. Mutual underwriting societies are potentially a good answer for professional liability, but haven't made much of a mark last time I looked.

So, yeah, some doctors and hospitals are getting nailed with high premiums, but it's not the biggest problem medicine has. The quarter million or so in loans worrying that intern who hasn't slept in two days seems like a bigger one.

[ThomWV]

9. Thank you. As I digest these answers your's will get particular thought.

In the end I see one common thread among the thoughtful responses. Time for a bike ride, time to think.

[glowing]

10. Ob-Gyn are the most sued Drs. There is a lot that can happen or go wrong

during a pregnancy and birth. AND it is one of the more emotional issues for people; bringing a new child into the world. The mal-practice insurance is very high to cover the Dr. The more Dr.s you have within a practice will bring down the costs, but individuals trying to practice by themselves in a rural area would have a higher premium cost and less choices in hospitals to deliver a baby. As well as, in a rural area, there would be fewer people on an insurance plan. Rural areas have fewer "big companies" besides maybe a Walmart (and we all know most people making min. wage are not able to afford the insurance plan). Some may be covered by Medicare or Medicaid. They also pay less. Or an individual family would have to pay out of pocket the expenses. Drs who practice medicine in rural areas really have to have a love for healing because they won't become wealthy in a rural area. Mid-Wives are a cheaper alternative for rural areas so there's even more competition for "customers".. or it may be the only option along with the General Practitioner for the region.

So, a Dr. first starting out, strapped with huge medical bills, having to buy malpractice insurance, with few clients/ customers, and having to set up an office/ clinic, it is going to be expensive.

NOW, if we were a country that had a single-payer solution and educated our populace without leaving young people with a degree in massive debt, Drs and nurses, etc. would have a more options in where they would like to live and practice medicine.