Cost of malpractice insurance is driving docs out of business

New York state physicians are facing a dire situation that is likely to get worse on July 1. That’s when the state superintendent of insurance is expected to announce a record high double-digit increase in medical liability insurance rates.

Medical Liability Mutual Insurance Co., which provides the insurance for 70 percent of physicians practicing in the state, has requested a 16.6 percent boost.

Over the past four years, physician premiums have risen between 30 percent and 47 percent at a time when physician income at best remained stagnant.

Why has the cost gone up so much? Sky-high medical liability awards that benefit the legal system rather than the patient.

The median medical liability jury award in New York rose 31 percent (from $1 million to $1.3 million) from 1999-2005 compared with 1997-2003.

Meanwhile, hundreds of millions of premium dollars have been spent by medical liability insurers to defend cases in which no payment is ever made to the plaintiff.

Of the amounts that were paid, patients received only 43 cents of every award dollar. The remaining 57 cents goes primarily to costs including attorney fees.

The problem, while statewide, is most acute in Long Island, New York City and the lower Hudson Valley. In these areas, since 2001, liability insurance costs have risen from 86 percent to 105 percent. These costs can be directly related to ever-increasing liability awards.

One solution is the enactment of comprehensive reform to balance the rights of defendants and plaintiffs while bringing about much needed relief to a broken system. The state Medical Reform Act and legislation to require expert witness reform and test-pilot medical courts administered by medical experts are a good start.

I would like to see our legislators consider enacting a type of no-fault medical liability program that compensates injured patients directly, without destroying the practice and livelihood of good physicians who were unfortunate enough to have had bad outcomes.

This could dramatically reduce premiums, as well as put the compensation in the patient’s pocket, not the legal system’s coffers. Many physicians simply cannot afford increased liability premiums, and so must retire early, limit their practice or relocate. Leaving the system unchanged would result in severely reduced health care access for New Yorkers.

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