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June 02, 2005

Malpractice: to practice badly

As we all know, the trial lawyers are putting doctors out of business. If only people who have the wrong arm/kidney/testicle removed would get less cash, doctors’ insurance rates would go down. Except, that’s not true:

Researchers found that payments grew an average of 4 percent annually during the years covered by the study, or 52 percent overall since 1991, but only 1.6 percent a year since 2000. The increases are roughly equivalent to the overall rise in healthcare costs, said Amitabh Chandra, lead author and an assistant professor of economics at the New Hampshire college.
[...]
Meanwhile, malpractice insurance premiums for internists, general surgeons, and obstetricians have skyrocketed since 2000, jumping 20 to 25 percent in 2002 alone. In Massachusetts, ProMutual Group, which covers about one-third of the state's doctors, raised rates an average of 11 percent last year, 20 percent in 2003, and 12.5 percent in 2002.
Boston Globe

Insurance of all sorts is a necessary part of our entire economy. It is simply impossible to live and do business without it. And, of course, given the utter necessity of insurance, providers are jacking up their rates just as fast as possible. As a result people are going out of business...

It’s time, I think, to start applying revenue caps to insurance providers. Let ‘em keep (say) 10% more than what they pay out, and give the rest back as a rebate to those they insure. Indeed, perhaps the safer/better you are, the bigger the rebate. Just a thought...

(Thanks to Jesse Taylor)

Posted by Andrew at June 2, 2005 12:11 PM

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