Some good news in the Mountain State:
The West Virginia Mutual Insurance Company has been granted a 5 percent rate increase according to Insurance Commissioner Jane L. Cline. The new rates take effect Jan. 1, 2006.
West Virginia Mutual filed for the rate decrease with the Offices of the Insurance Commissioner in August. The decrease was granted Oct. 24, 2005.
“This rate decrease is evidence that we are achieving our goal of having an available, affordable and stable medical liability insurance climate in West Virginia,” said Governor Joe Manchin III.
West Virginia Mutual was created in July 2004 to address the medical malpractice crisis. Currently, there are 1,647 physicians insured by the Mutual.
“This is not only good news for physicians insured by the Mutual, it is another major step forward toward stabilizing the health care delivery system in our state,” said Dr. Robert Ghiz, chairman of West Virginia Physicians’ Mutual Insurance Company board of directors.
The combination of the nonprofit and a decrease in malpractice suits since legislation was changed seems to be having an effect.
Jack Lindahl
Increase? (Para. 1) Or decrease? (Para. 2)
SomeCallMeTim
I don’t know much about this issue. However, Brad Plummer (IIRC) has blogged a lot about the absense of any good evidence that recent premium increases are, in any fashion, tied to malpractice claims. Don’t be so sure about cause, here.
John Cole
It is a decrease. Heard it on the radio and read it in a dead tree newspaper.
That website just goofed.
Gratefulcub
As someone that works in the not for profit healthcare industry in KY and WV, it is an improvement.
But, unlike what Mr. Bush wants us to believe, malpractice insurance is not what is driving up healthcare costs. Don’t get me wrong, WV had it’s own problem with insurance. Our physician recruitment in WV was dismal, primarily because of malpractice. But, malpractice insurance is not the driver for increases in healthcare. As SCMTim points out, the cause of malpractice premiums increasing is somewhat of a mystery. Dollars paid out in claims has increased over the last couple of decades at a much slower pace than premiums.
The problem we are going to be facing in the near future, are cuts to medicare and medicaid. We are a mission driven organization, we don’t turn patients away. Cuts to these programs will not reduce our volumes, just our reimbursement. These patients will become ‘self pay’. The average rate of reimbursement on self pay patients is around 1%.
Additionally, those who lose their medicaid/care coverage, lose the ability to see a physician. They instead wait until it is an emergency, and enter the system through the ER. The patients become more expensive to treat, and we are doing it for free.
The level of poverty in parts Appalachia is staggering. Without government reimbursement for services, hospitals like ours will not be able to stay open. You have to make a margin before you can make a mission. This only increases the poverty, since the hospitals are often the counties largest employer. And, the distance to the facilities that remain open is dramatic. If your emergency health care is 2 hours away in Beckley, do you really have emergency care?
Please people, call your congressmen, or whatever it is that we are supposed to do to change policy. Drastic cuts to these programs, while the costs of healthcare increase rapidly, is setting our nation up for failure. We need to address the situation much more honestly than we are at this time. We must debate why the costs are so out of control, why we have so many people uncovered.
Instead it is being treated as politics. This is a serious long term problem. Just my lunch break diatribe.
Steven D
This is also part of a national trend. In Washington, we have had neither a non-progit coop or malpractice tort reform, and malpractice premiums have dropped here as well. These types of specialty liability insurance (directors and officers insurance is another example) are especially susceptible to market fluctuations in the reinsurance market that can cause premiums to be more volatile than claims experience would otherwise suggest.
Steve S
Interesting. Stock market drops… malpractice premiums rise.
Stock market starts doing better… malpractice premiums go down.
Cause and effect?
We report. You decide.
Kimmitt
Yeah, that’s pretty much the deal. Insurance premia in general follow the stock market pretty closely, since most of these companies have large enough reserves that returns to investment are a significant percentage of their revenue.
Tulkinghorn
What is offensive is the political movement coming out of K Street that blames the increased premiums (I like premia, but it is just too arch) on trial lawyers.
The only justification for this being that the American Trial Laeyers Association supported Clinton so they are by definition a bunch of blood sucking deadbeats. Lets just demonize these folks for fun and profit, won’t we? it is not like anyone gives a shit about what anyone who did not vote for us thinks.
This from an admionistration that just can’t understand why people hate them so passionately.
Full disclosure: I am a member of ATLA but not in the Professional Malpractice section.
ape
Could the number of malpractice suits be related to the number of incidents of malpractice? Possibily not, but surely that’s the ideal that we should want to move towards.
on the high cost of healthcare: the US system simply doesn’t work:
From the BMJ 2002-
“That the American healthcare system is in a mess has long been apparent. Despite spending vast and ever increasing amounts of money (now over a third more per person than Switzerland, the next highest spender), uniquely among industrialised countries the United States does not attempt to provide cover for all its citizens, and the number of uninsured people has increased from 42 million to 45 million..”
Eye Doc
Look guys, it’s not a coincidence that every state that has enacted caps on noneconomic damages has seen malpractice premiums stabilize or go down, with the possible exception of California, which had premiums fall after caps were passed and subsequently reforms to the malpractice indistry were also passed.
A good example would be Texas where rates are falling, and the number of medical malpractice cases has fallen by over 50%. The sharp drop in claims tells you very clearly that there were a huge number of frivilous malpractice cases that were being filed, which the plaintiff’s lawyers no longer believe are worth rolling the dice on because of the caps.
Overall for the country as a whole, the defendants win about 90% of medical malpractice cases, which again tells you that there are a lot of nonmeritorious cases being filed.
None of this means that other types of reforms could not lower malpractice premiums. But, you get the best bang for the buck by capping noneconomic damages.
Please also keep in mind that as a whole, the medical malpractice industry is a money loser, which is why there is a constant decline in the number of malpractice carriers out there writing premiums. That doesn’t mena that nobody is making money, but if you look at the business as a whole, it loses money.
And, it’s been pretty clear that defensive medicine (ie doing unnecessary stuff to keep from being sued) is very common and jacks up the cost of medicine for everyone. So, we all should be in favor of lowering medical malpractice insurance costs and limiting the number of frivilous lawsuits, which means we should all be in favor of capping noneconomic damages at a level that’s reasonable but doesn’t encourage the lottery mentality so prevalent today.