America’s doctors have staged a series of dramatic work stoppages in
recent weeks to protest rising malpractice insurance rates.
…
There is no doubt that insurance rates for everybody, including doctors, have risen dramatically in recent years. The reason why depends on who you ask.
Consumer activists who work on insurance and litigation issues say the crisis is caused by insurance-industry price gouging. They say insurers, who historically earn more money from investing premiums in stocks and bonds, have been hurt by the market downturn. So insurers have raised rates for everybody, including doctors, to recover these losses.
A study by J. Robert Hunter of the Consumer Federation of America suggests this is the case. He studied malpractice premium growth and found it did not track claims paid out by insurers. Instead, Hunter found premiums rose and fell with the economy. In strong economies, when the markets are gaining, insurance rates hold steady. When markets are weak, premiums rise.
"This is the third time in 30 years that we’ve had this crisis," said Joanne Doroshow, executive director of the Center for Justice and Democracy, a consumer and legal rights group. "And inevitably, there are always these frenetic calls for tort reform, because the insurance industry will say, 'Oh, don’t look at us. It’s not our fault that we’re price-gouging. It’s the lawyers and the juries.' When actually that’s not at all what the evidence shows."
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