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The Business of
Health Care Report
Rising at the highest rate since the mid-1980s, medical malpractice insurance premiums are adding to overall health care costs. While doctors and hospitals have typically absorbed additional costs associated with malpractice insurance, the added expenses are now being passed to health care insurers and patients. Overall, health care costs are expected to rise 10 percent this
year, and malpractice premiums will account for 10 percent of that increase, according to an estimate by the Medical
Group Management Association. That’s assuming health providers can get medical malpractice insurance at any cost! The rising cost of malpractice coverage is becoming one of the most
important factors driving inflation for health care services, particularly for high-priced specialties like surgery and
obstetrics. Malpractice premiums also result in higher total health care costs, as
hospitals and physicians practice more defensively, ordering extra tests and opting for procedures that limit risks to
shield themselves from litigation Malpractice insurers blame the price hikes on huge jury awards and
large settlements in lawsuits. Even though the number of malpractice suits has held steady, the average jury award
between 1993 and 1999 increased 79 percent, from $1.95 million to $3.49 million, according to Jury Verdict Research. As a result, The St. Paul Companies, the country’s second largest
malpractice insurer, has notified virtually all obstetricians, general surgeons and emergency medicine physicians that
their policies will not be renewed in 2002. For many specialties and in certain parts of the U.S., underwriters are
simply not issuing coverage, forcing physicians from the marketplace. In the end it costs all of us dearly, as reflected in rising health
costs, escalating insurance rates, and the chilling impact lawsuits have on medical personnel. Sources: St. Paul Companies, Jury Verdict Research, Medical Group Management Association For Texas Health Resources
and its family of hospitals - Harris Methodist Hospitals, Presbyterian
Healthcare System and Arlington Memorial Hospital - I'm CEO Doug
Hawthorne with "The Business of Health Care Report" on NewsRadio
1080 KRLD.
©
2002 Texas Health Resources |
I’m Doug Hawthorne, President and CEO of Texas Health Resources, with
"The Business of Health Care Report" on 