Med-Mal Hikes All About Losses, Say Regulators

By Steve Tuckey

NU Online News Service, Sept. 28, 10:44 a.m. EDT?Amid continuing debate over ways to curb soaring medical malpractice premiums, regulators who have studied the issue are certain of one thing: underwriting losses are the main culprit.[@@]

"Notwithstanding the data limitations discussed, the research indicates that underwriting losses were the major factor influencing the rate increases experienced by physicians and other health care providers over the past several years," a report by the National Association of Insurance Commissioners Market Conditions Working Group stated.

Texas Insurance Commissioner Jose Montemayor, the Working Group chairman, expressed concern that initial reports of the document stressed the fact that not enough data exists to adequately determine the exact causes of the increased losses.

The NAIC cited that lack of data as one of the reasons it made no recommendation concerning civil litigation reform measures that many insurance industry advocates feel are critical to restoring a more stable medical malpractice marketplace.

"There is no confusion about what causes rising premiums, in terms of the affordability piece. We believe that to be a factor of losses," Mr. Montemayor said.

According to Mr. Montemayor, since caps were placed on non-economic malpractice damage awards in Texas more than two dozen companies have expressed an interest in writing medical liability coverage. Prior to the cap restriction there were just four companies writing medical malpractice coverage, he said.

The commissioner said he is a firm believer in the effectiveness of caps providing the kind of predictability carriers look for before writing a line of insurance in a state.

But he said somewhat ruefully that he was not able to get what he calls "the results of the Texas experience" into the report.

"I would not want to take the Texas experience and guarantee it would be the same as everywhere else," he said. "But the reforms in Texas are working."

The whole medical malpractice premium debate focuses first on whether insurers' investment or underwriting losses have driven the premium increases.

Mr. Montemayor stressed that panel members looked at the impact of investment losses on rates and found it came in "a distant second or third' in driving premium increases.

But even accepting the fact that losses have been driving the premium increases, policymakers have to determine whether those are driven by excessive court judgments or an unwarranted increase in the number of cases, which raises a wide spectrum of medical error and patient safety remedies.

"And that is the next step, which is to collect better data, continue to do the analysis and sometime update our report," Mr. Montemayor said.

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Med-Mal Hikes All About Losses, Say Regulators

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