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Setting the Record Straight on Medical Malpractice Premiums

Each Illinois birth injury lawyer at our firm works with patients whose children suffered serious, often life-altering injuries as a result of medical malpractice. Unfortunately, public misunderstanding about medical malpractice lead many to make overblown and downright false claims about the effect that all Illinois medical malpractice cases-including birth injury suits-have on the healthcare profession as a whole.

It is vital to set the record straight.

One of the more popular repeated refrains is that there are rising numbers of malpractice suits, the payouts are getting higher, and medical malpractice insurance premiums for doctors are rising. The rising premiums, certain people say, lead to higher medical costs for everyone.

This is not true.

The Reality
To debunk this myth one need only look at information released by those who themselves are advocating for “tort reform” proposals to limit the rights of injury victims. New statistics have recently been released by the National Association of Insurance Commissioners. The data provides a wealth of information about the amount of premiums collected, the amount paid out in claims, defense costs, and cost containment ratios. The data shows how all of these figures have changed from year to year.

What do they show?

Far from claims made by tort reform proponents, the malpractice insurance industry is thriving-with costs continuing to drop. The total number of “incurred expenses” has dropped very quickly over the past nine years. In 2003 those expenses totaled about $8.5 billion. Last year the figure was only at $3.6 billion. Consider that this represents a 56% decline in eight years without even accounting for inflation.

The costs for malpractice insurance are also shown not to have “skyrocketed” as many continue to point out. They have shown a similar, though less robust, decline over the past half decade.

The “loss rates” for these companies has shown similar trends, indicating that the insurance industry is making more money than ever before. From a high of 126.83% in 2001 to rates that are just over 50% in the last four years.

All of this data from the NAIC mirrors information in a different database-the National Practitioner Data Bank. This database, which monitors information for individual doctors (not hospitals) shows that payments have declined for ten years in a row. The total payouts have been cut in half over less than a ten year period.

What This Means
Our Chicago medical malpractice attorneys understand that all of this means that claims made by tort reform proponents are downright wrong. Arguments about rising malpractice costs and payouts bear zero resemblance to information from the insurance industry’s own databases.

The truth is that the rash of intrusive tort reform laws have severely limited the rights of injured patients to seek recovery for the harm they experience as a result of negligence. The total number of medical mistakes and patients errors has not declined. This represents a tragic skewing of priorities where the big medical interests and insurance companies are allowed to make bigger profits while patients continue to suffer the same as always.

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