New York Approves 14 Percent Med-Mal Hike

Since 2003, the insurance industry has been proposing double-digit increases for medical malpractice, and has received about one-third of what they sought. The action by Mr. Dinallo is the first time the department has approved a double-digit hike.

His move drew angry protests from doctors' groups.

State of New York Medical Society President Robert Goldberg said the increase means "a Long Island neurosurgeon will now have to pay an outrageous $309,311 for just a single year of coverage; a Brooklyn or Queens OB-GYN will now pay $173,061; and a Westchester orthopedic surgeon will now pay $108,679."

He said even prior to this most recent rate increase announcement, physician liability insurance costs for many surgical specialists across New York State had almost doubled over the last five years.

"The latest increase announced today will throw gasoline on this already raging fire," he said.

However, Mr. Dinallo said the rate increase is necessary because it comes after:

o "Years of setting rates below what was needed.

o "The state's appropriation for general state expenses of $691 million of medical malpractice insurance reserve funds, which could have served to enhance insurer solvency and temper rate spikes.

o "The prior failure to successfully address the underlying causes of high medical malpractice costs."

The Dinallo task force, which will report back to the governor by the end of the year, will include New York's health commissioner, Dr. Richard F. Daines, along with a range of representatives from the insurance industry, physician and hospital associations, consumer groups, health plans, trial lawyers, and the legislature.

Dr. Goldberg said the Society applauds the decision to create a task force to "finally and comprehensively address the tort and medical malpractice insurance problems."

He added that "without this rate approval paired with a new, comprehensive effort to address the underlying causes of high insurance costs, the medical malpractice insurance industry will continue to deteriorate into crisis."

Mr. Dinallo said that "after years of failing to confront the fundamental problems that have led to this current environment, we have inherited the worst of both worlds–physicians who cannot afford to practice medicine and insurers whose financial condition is rapidly eroding. The cause is high medical liability costs–and this administration is going to address it."

He said the rate increase "is less than what carriers sought, and is what our experts believe is necessary to stave off an industrywide crisis unless the underlying problem of high medical malpractice costs is addressed."

In establishing the task force, Gov. Spitzer said that "due to years of inaction, the medical malpractice insurance market has reached a crisis level. This administration will not turn a blind eye to this situation. We will tackle this problem head on."

Artificially low rates, combined with the failure to effectuate needed reforms to address the root causes of high medical liability costs, have left few players covering the New York market, the department said.

Medical Liability Mutual Insurance Company is the largest New York carrier, with a market share of about 60 percent, while Physicians Reciprocal Insurers is second with more than 20 percent, according to the insurance department.