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May 31, 2005

CONTACT: Carmen Balber - 310-392-0522 x324

Medical Malpractice Claims Are Stable (Not Skyrocketing) Says Kaiser Family Foundation

Group Says Time to Put Focus on Insurance Company Practices
Santa Monica, CA -- The chief argument for legislation to limit the legal rights of patients injured by a physician -- that the number of medical malpractice claims and the cost of those claims have been skyrocketing -- is a fabrication, according to data in a newly released study by the Kaiser Family Foundation (KFF). The number of medical malpractice claims per doctor has declined over the past twelve years, according to the KFF analysis. Claims payments have increased a mere 1.7% per year after adjusting for inflation over the time period and have actually fallen an average of 2.4% per year since 2001. Click here to read the study.

"Doctors' malpractice premiums have been rising, but the contention that increased patient claims and higher jury verdicts have anything to do with the rate hikes is false," said Douglas Heller, Executive Director of the nonprofit Foundation for Taxpayer and Consumer Rights (FTCR). "It is time to shift the focus away from limits on patients' legal rights and onto insurance industry reform."

For several years insurance lobbyists and the American Medical Association have pressed lawmakers around the country to enact legal restrictions that they argued were needed to address escalating insurance premiums. The KFF study illustrates that the key arguments made in the name of justifying legal limits do not fit the facts.

The reported data show that between 1991 and 2003, the number of malpractice claims fell from 25.2 claims per thousand physicians to 18.8 claims. The total annual payout for medical malpractice claims -- after adjusting for inflation -- increased from $2.12 billion in 1991 to $2.58 billion in 2003. Other studies have found that claims payouts have increased at a rate equal to the rate of medical inflation.

"The fact that doctors have felt the sting of high malpractice premiums is no justification for worsening the pain felt by injured patients. Because insurance claims were not the problem, limiting them will not provide a solution. In order to address insurance prices, lawmakers need to address insurance industry practices," said Heller.

Consumer advocates point to California's 1988 voter-approved initiative Proposition 103, which strictly regulates insurance companies and has been used to block more than $60 million in proposed medical malpractice rate hikes in the past two years. The law bars insurance companies from charging excessive rates and forces insurers to make their rate increase proposals public and subject to review before a rate hike can take effect.

A study by FTCR compared the impact of legal restrictions on injured patients with the effect of regulatory scrutiny of insurance companies in California. The study found that Proposition 103's insurance regulations ended the insurance industry price gouging of doctors, while legal limitations -- including the types of caps on damages frequently proposed by the medical-insurer lobby -- did not lower doctors' premiums. Click here to dowload FTCR's study.

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