"Get your facts first, and then you can distort them as much as you please." (Mark Twain)

Friday, July 08, 2005

Paying a Premium 

Well, well, well - it looks like maybe those greedy trial lawyers aren't really the problem, after all:
The rates insurers charge physicians for medical malpractice coverage rose dramatically over the past five years, but the amount insurers paid out in claims did not, according to a study from a consumer advocacy group.

The study, released Thursday by the Center for Justice & Democracy, found that malpractice rates increased by 120 percent from 2000 through 2004, while the amount of money paid in claims went up by 5.7 percent.

"This is wacky," said Jay Angoff, a former insurance commissioner in Missouri during the 1990s and the primary author of the study. "Now what's the insurance companies' defense to this?"

Insurers criticized the study's methodology, saying it failed to take into account other costs insurance firms face, such as underwriting. Larry Smarr, president of the Maryland-based Physician Insurers Association of America, said if those costs had been included, it would have shown a much different picture.

In answer to Mr. Angoff, it appears that the insurance companies' defense is a classic sleight-of-hand. Perhaps the study failed to take certain costs into account (not having seen the study, I'm willing to assume for the sake of argument that this may be true). However, the study certainly did account for money paid out in claims - the cost item which insurers consistently blame - and found that it had increased only nominally (does a 5.7% increase between 2000 and 2004 even keep pace with inflation?) during the period in question, while premiums skyrocketed. Whatever is behind those increases in premiums, it clearly isn't the cost of claims - an inconvenient fact which, conveniently, the insurance spokesweasel failed to dispute.




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