The Cochran Firm Legal Blog

One of the ideas floated as a way to control healthcare costs in this country is to enact tort reform that stops frivolous medical malpractice lawsuits. Proponents claim that medical malpractice lawsuits are out of control, and they are driving the cost of medicine out of the reach of most people or driving doctors to retire, reducing our access to qualified physicians. Is this true?

Health care costs have risen by an average of 8.4% per year in this country since 2004, based on the figures of the Milliman Medical Index (MMI), an assessment of medical costs published by the employee benefits consulting firm Milliman, Inc. The MMI estimated that medical care for a family of four cost an average of $8400 in 2001, but has grown to $16,700 by 2009, an average of 8.9% per year. How much of this growth is the result of rising medical malpractice payouts?

According to insurance company data, payouts for medical malpractice lawsuits have dropped by about $730 million, or 13% since 2001. How can a 13% drop in payouts be responsible for a 198% increase in costs? However, while payouts were dropping, medical malpractice insurance premiums were rising. From 2001-2008, premiums rose by over $3.2 billion, an increase of 43%. This increase in premiums has allowed insurance companies to post significant profits. Even during 2008, when many companies (even many branches of insurance companies) were posting losses, medical malpractice insurers posted profits, albeit slightly less than their record profits of over 15% in 2007.

But even profit-taking by medical malpractice insurers who gouge your doctors with outrageous rates is not responsible for rising healthcare costs. The total cost of premiums paid by all doctors in the United States accounts for 0.45% (less than one half of one percent) of all healthcare expenditures in this country, and actual payouts are only 0.20% (one fifth of one percent). Clearly, whether you believe that tort reform is effective at reducing costs for doctors or not, its potential contribution to any healthcare reform would be miniscule.

At The Cochran Firm, we stand up for the rights of people who have been injured by a doctor's error, and we believe that protecting these rights should be an essential component of healthcare reform. If you have been injured by a doctor, we will fight for you. Schedule a free consultation with us today to learn more about your rights.

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