New Study Shows Medical Malpractice Rates Still Rising While Insurance Payouts Stabilize

By Brittany Golledge

Published on August 01, 2005

The study indicates that medical malpractice rates increased 120% between 2000 and 2004. In comparison, the actual amount of money paid out by insurance companies during this period to settle medical malpractice claims went up by 5.7%.

This study has fueled the national debate over who is responsible for the rapid rise in medical malpractice premiums across the country. The falling claims and rising premiums cited in the study have called into question what insurers have termed the "tort crisis" of the last decade. Over the last few years the insurance companies have been at the forefront of a campaign to cap compensation to injured patients. Critics of insurers are now pointing to the discrepancy between low payouts and high rate premiums throughout the industry to challenge the existence of a crisis in medical malpractice claims.

The insurance companies are quick to point out that most of the money from rate hikes is collected in what is known as a "surplus fund," which is meant to cover anticipated future claims. On average, most claims are paid out 4 ½ years after the date of the accident. Insurance representatives insist that comparing current premiums with the cost of claims that originated years ago is an inappropriate measure of their finances.

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