Wyoming Medical Malpractice Insurance Rates Threatened by Record Verdict

side note: Physicians in Wyoming pay moderate medical malpractice insurance rates. They may not be as affordable as the medical malpractice insurance rates in neighboring Idaho, but Wyoming has never had to worry about winding up on the American Tort Reform Association’s Annual Judicial Hellholes List. Unfortunately, after the recent case discussed in the below article, Wyoming’s medical malpractice rates are under threat (and could be a state to watch in next year’s ATRA report).

The article below details the $9 million medical malpractice jury verdict in favor of a man who went to the hospital complaining of neck pain after being involved in a vehicle rollover. He was discharged the same day; returned four days later in extreme pain. This time it was discovered the man had broken his neck and — due to lack of immediate treatment — suffered irreparable nerve damage. The $9 million jury verdict is the largest in state history. The previous record was $1.5 million.

Large jury verdicts threaten the medical malpractice insurance rates of every doctor who practices in the state where the verdict was made. This is because medical malpractice insurance companies need to raise rates in order to have in reserve the amount needed to payout large claims. If the previous record verdict was $1.5 million, the companies will collect premiums in keeping with that record verdict. Now that the bar has been raised, those same companies need to worry about keeping reserves for other such high-dollar claims.

This is the intellectually honest argument for non-economic damage caps. If a state sets a damage cap at $1 million, for example, insurance companies will not need to keep as high of reserves. Without such a cap, and a $9 million verdict on the books, a prudent insurance company is going to keep a much higher reserve level, raising premiums in order to raise reserves.

This jury verdict is unfortunate as Wyoming’s largest insurer of medical liability had decreased its rates by as much as 16 percent for some specialties in 2011; its second largest insurer of medical liability had decreased its rates by as much as 18 percent the year before. I would not be surprised if that downward trend reversed itself in the coming years.

The Associated Press

8:51 a.m. CST, November 14, 2011

GILLETTE, Wyo. – A $9 million medical malpractice verdict in the case of an oil-field worker with a broken neck is thought to be the largest in Wyoming history. The Casper Star-Tribune reports Sunday that the award against Campbell County Memorial Hospital in Gillette far eclipses the state’s previous medical malpractice high of $1.5 million.

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