Medical malpractice insurance crisis may be easing, study shows
By LIZ FREEMAN
Florida doctors may be getting a break with their medical malpractice insurance, an analysis by the state Office of Insurance Regulation shows.
But that doesnâ€™t necessarily mean their battle with exhorbitant premiums is over or that the stateâ€™s reputation as a hostile medical malpractice climate is in the past, according to one official with the Florida Medical Association, which represents 17,500 physicians in the state.
State insurance regulators found premium rates for 2006 decreased by 3 percent from the year before for physicians and surgeons, with 32 insurance companies writing medical malpractice policies.
The rate decrease takes into consideration that 15 insurance carriers reduced their rates while the remainder filed no rate changes, according to the latest financial report on the medical malpractice insurance market.
The decline is being perceived as a good indicator that reforms in 2003 by the state Legislature are working.
â€œThis report shows that the Florida Legislatureâ€™s efforts to control these costs have been effective,â€? Kevin McCarty, state insurance commissioner, said in a statement.
The dominant medical malpractice insurer, First Professional Insurance Co. (FPIC) decreased its rate by 11 percent in October. The company wrote 7,000 policies.
After an extensive outcry from physicians statewide of double-digit increases in medical malpractice premiums, the Legislature in 2003 passed reforms aiming to bring down insurance costs to doctors.
Among the reforms is a $500,000 cap on non-economic damages, or pain and suffering damages, in medical malpractice trials. The pain-and-suffering damages can go up to $1 million when a patient dies, is left in a vegetative state or with catastrophic injuries.
Doctors reacted by stating the cap wouldnâ€™t go far enough to force insurance companies to reduce their premiums to reasonable levels.
â€œIt does appear rates are stabilizing a bit, some insurance rates are going down, but that needs to be put in perspective,â€? Jeff Scott, general counsel for the Florida Medical Association, said of the rate report that was released recently. â€œThey may have gone down a touch but they are still the highest in the nation.â€?
Thatâ€™s based on a rate analysis the Florida Medical Association did in 2004, but the group has not done an update since then, he acknowledged.
Debra Henley, deputy executive director of the Florida Justice Association, which represents trial attorneys, said the 3 percent rate decline isnâ€™t enough.
â€œThatâ€™s woefully inadequate. The rates should clearly be lower,â€? she said.
Rate declines that have occurred since the cap on non-economic damages hasnâ€™t done much to resolve the stateâ€™s stigma that itâ€™s an unfriendly environment for physicians when it comes to malpractice, said Scott of the Florida Medical Association.
Many physicians had been leaving Florida for states where insurance and other practice costs are lower, leaving voids among specialities.
In Southwest Florida, general surgeons, orthopedic surgeons and obstetricians/gynecologists had been picking up their stakes and going elsewhere.
â€œThereâ€™s still a lot of angst, especially down in South Florida,â€? Scott said. â€œThe rate decrease in Florida has not resulted in a flood of new doctors to the state.â€?
Medical officials in Southwest Florida are a little more optimistic.
â€œThe market is softening a little bit,â€™â€? said Dr. Allen Weiss, president and chief executive officer of the NCH Healthcare System. â€œWe have gone from expensive and hard-to-get insurance to a time when itâ€™s easier to get and less expensive.â€?
NCH added 13 new physicians to its medical staff in September and six or seven more are joining the staff this month, Weiss said. At last count, NCH has 565 physicians on staff.
On the flip side, doctors arenâ€™t leaving the region to open practices in other states as they once were, said Margaret Eadington, executive director of the Collier County Medical Society.
â€œPeople definitely are not leaving,â€? she said.
In August, eight new doctors joined the medical society and nine joined in September, she said.
â€œSo they are coming in,â€? she said. â€œThis is more than we usually get.â€?
When it comes to closed claims, the state insurance office reported 900 medical malpractice claims were closed last year, way down from 3,753 closed claims the year before.
Itâ€™s important, though, not to read too much into the difference because it takes several years for claims to work their way through the legal system, said Jack McDermott, senior policy analyst with the insurance office.
â€œWe donâ€™t have a good idea of claims opened this year,â€? he said.
Whatâ€™s unchanged from 2005 to last year is that medical malpractice insurers spent 40 cents on the dollar for paid claims, according to the report. Not factored in the figure is the costs to defend clients, he said.
Last year, insurers paid out $188 million in medical malpractice claims, with $138 million of that for economic damages and the remaining $50 million in non-economic damages.
With the 3,753 claims closed in 2005, insurers paid out $676 million in medical malpractice damages, with $449 million of that for economic damages and $227 million in pain and suffering.
Most of the companies writing medical malpractice policies in Florida also write other insurance coverages and Florida is among their top five markets.