Medical Malpractice Insurance, Operating Costs Increase for Medical Group Practices, Study Finds

Medical malpractice insurance and operating costs for medical group practices increased between 2003 and 2004, according to a study released on Monday by the Medical Group Management Association, CQ HealthBeat News reports. According to the study, malpractice insurance premiums for multi-specialty groups increased 22.73% between 2003 and 2004. Over the same period, malpractice insurance premiums increased 17% for cardiologists and 15.73% for orthopedic surgeons, the study found. The study also found that operating costs for multi-specialty groups increased 3.18% per full-time-equivalent physician between 2003 and 2004 and that total medical revenue for those practices increased by only 2.96% over the same period. Operating costs increased 5.99% for cardiologists and 7.28% for orthopedic surgeons between 2003 and 2004, the study found. MGMA President and CEO William Jessee said, "The future looks bleak for primary care medical group practices, as well as for several specialties most affected by liability premium hikes and decreasing margins" (CQ HealthBeat News, 10/4).

Opinion Piece
Although a number of lawmakers recently have called for limits on "frivolous" malpractice lawsuits, "the truth is, there aren't too many civil lawsuits; there are too few," Amitai Etzioni, a professor of sociology at George Washington University, writes in a Los Angeles Times opinion piece. According to Etzioni, although the American Medical Association has warned that "million-dollar jury awards" and "a flood a frivolous lawsuits" have led to increased malpractice insurance costs and a "full-blown liability crisis," studies have found that most patients who experience malpractice never file a lawsuit. Many of those patients are unaware that negligence by health care providers caused their problems, and others have concerns that providers will not treat them if they file a lawsuit, Etzioni writes. He adds that among malpractice lawsuits that are filed, two-thirds are dismissed or dropped, "so no massive awards result." In addition, Etzioni writes that when plaintiffs win malpractice judgments, "really large jury awards are rare and are often scaled back on appeal." He writes, "Ultimately, the issue comes down to a question of balance. Frivolous lawsuits of all stripes must be discouraged, but negligence should be punished" (Etzioni, Los Angeles Times, 10/5).