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Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates

GAO-03-702 Published: Jun 27, 2003. Publicly Released: Jul 28, 2003.
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Highlights

Over the past several years, large increases in medical malpractice insurance premium rates have raised concerns that physicians will no longer be able to afford malpractice insurance and will be forced to curtail or discontinue providing certain services. Additionally, a lack of profitability has led some large insurers to stop selling medical malpractice insurance, furthering concerns that physicians will not be able to obtain coverage. To help Congress better understand the reasons behind the rate increases, GAO undertook a study to (1) describe the extent of the increases in medical malpractice insurance rates, (2) analyze the factors that contributed to those increases, and (3) identify changes in the medical malpractice insurance market that might make this period of rising premium rates different from previous such periods.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
Health care providers have suffered through three medical malpractice insurance "crisis" in the past 30 years. Each instance has generatede competing claims about the extent of the problem, the causes, and the possible solutions. In each instance, a lack of necessary data has hindered and continues to hinder the efforts of Congress, state regulators, and others to carefully analyze the problem and the effectiveness of the solutions that have been tried. Because of the potential for future crisis, and in order to facilitate the evaluation of legislative remedies put in place by various levels of government, Congress may want to consider taking steps to ensure that additional and better data are collected. Specifically, Congress may want to consider encouraging NAIC and state insurance regulators to identify the types of data that are necessary to properly evaluate the medical malpractice insurance market--specifically, the frequency, severity, and causes of losses--and begin collecting these data in a form that would allow appropriate analysis. Included in this process would be an analysis of the costs and benefits of collecting such data, as well as the extent to which some segments of this market are not captured by current data-gathering efforts. Such data could serve the interests of state and federal governments and allow both to better understand the causes of recurring crises in the medical malpractice insurance market and formulate the most appropriate and effective solutions.
Closed – Not Implemented
According to NAIC officials, Congress has taken no action with respect to this matter for congressional consideration.

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Insurance premiumsMalpractice (medical)PhysiciansInsurance ratesInsurance claimsInterest ratesHospitalsMedical malpracticeInsurance companiesProperty losses