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medical malpractice factoidesque things in the NYT:
or GOP Endorses $250,000 Price on Life Unadjusted for Inflation.
The article never adjusts for the growing number of doctors paying into the system since 1975 - incidentally 323K (1975) to 782K (2000) - to give some general picture of how much payouts have increased compared to casual market growth. So take into account over double the number of physicians and 100 million additional patients (like, Americans) since 1975 and the general slope of this graph doesn't appear all that dramatic:
It's visually obvious, as is, that the correlation between malpractice premiums and growth in payouts isn't that strong. So far as the effect of tort reform on malpractice costs Weiss Ratings Inc. - quoted in the article - found in their own research that states with caps saw median premiums rise by 48.2% (91-2002) while those without rose by 35.9%.
The PIAA, representing the insurance industry, responded to the Wiess report by complaining that states with "effective caps" - e.g. lower - like California are lumped together with states that have higher caps, like Indiana. Furthermore:
The four states having a $250,000 cap prior to 1991 (CA, CO, IN, KS) saw their total premiums increase by 28.0% between 1991 and 2001 (2002 data not available yet). States not having the $250,000 non-economic damage cap experienced a collective 47.7% increase in premiums, over 70% greater. See Appendix B for details. This wide gap in premiums actually collected compares inversely to Weiss’ faulty conclusion that annual premiums in states with caps increased by 48.2% as compared to 35.9% in states without caps.
There's apparently some disagreement here over which states had caps before 1991, Weiss says 1994 for KS and 1998 for CO. IN has had a cap since 1990 but it's presently set at $1M, a cap the PIAA a few paragraphs ago faulted the Weiss report for including because it was too high to be "effective". Likewise the PIAA simply uses the total increase in premiums collected: meaning there's no adjustment for population growth which would vary widely between states, there's no way to judge cost per doctor, something roughly accounted for in calculating the median premium paid.
Using Weiss's data and accounting for the PIAA's complaints - something the PIAA doesn't do - by ignoring states with caps only introduced to them in the late 90s and those with "ineffective caps" around $1M - leaving us with CA, LA, and MO - you'll note that the premiums increase by 49.5%, 83.7%, and 49.1% respectively - all above the average of states without caps. Median payouts in CA and MO still more than doubled, while in LA premiums went up more than payouts by 30%. Hawaii should be included but is a statistical outlier: it passed a payout cap ($375K) back in 1976 and saw only a 10% increase in median premiums, but the payouts increase by a whopping 733% in the same period - if we were to accept those numbers it doesn't say much in the way of tort reform even restricting median claim payouts, let alone reducing premiums. Perhaps the caps encouraged juries to reward the maximum amount allowed. Perhaps reducing the amount of actual malpractice would do more to control growth of payouts.
Moving on, the PIAA's complaint about the use of medians doesn't seem particularly meaningful - it could be but for their example case of Alabama the average 1991 rate is ~$25.3K (median: $25.6K) and in 2002 $22.4K (median: $23.4K). So instead of Weiss' -8.3% you get -12.5%, which just strengthen's the Weiss conclusion, rather than the opposite. If there's a better place to get data on premium rates than the MLM the PIAA doesn't suggest one, so we're left hanging.
The complaints from doctors who have never been sued but nevertheless see massive rate-hikes - usually advocating tort reform as the supposed solution - reminds me of what I thought was most important about that Mencimer piece in the Wasington Monthly a while back, "The one surefire way to bring down the number of big-payout lawsuits is to reduce the number of those doctors who inspire most of them. ... only 5 percent of the nation's doctors are responsible for more than half of all malpractice payouts". There's somebody responsible for hikes on the ubiquitous victimized doctor that sees rates skyrocket for no apparent reason, and what is called for among other things is underwriting reform, not price-fixing the lives of patients.