The Fayetteville Observer has an excellent piece in Sunday’s edition about the impact of rising malpractice insurance premiums on the willingness of physicians, particularly neurosurgeons, to stay and practice in North Carolina. Read it here.
The extent of the problem is mind-boggling. In September, the newspaper reported, the American Association of Neurological Surgeons said North Carolina was a “severe crisis” state for neurosurgeons’ medical malpractice insurance. That means neurosurgeons have seen their malpractice insurance premiums increase by 50 percent from 2000 to 2002, or they paid average premiums of $100,000 or more in 2002. A separate study by the American Medical Association lists North Carolina as a state showing “problem signs” for medical malpractice insurance.
Naturally, the different sides on this issue have different takes on the numbers. Docs and insurers point to a growing tendency for juries to side with plaintiffs and award high, sometimes seven-figure, payments. Even if reduced later on appeal, the exposure and risk involved have meant significantly higher costs for insurance, sometimes reducing physician incomes by 20 percent or more a year.
The trial lawyers point elsewhere, of course, as they are worried about possible political momentum in Raleigh in favor of tort reform. One explanation they offer is that insurers are hiking premiums because their investments in financial securities are souring and they need to prop up their bottom lines. Sorry, but this is likely only part of the story. Insurers have long time horizons and face significant competitive pressure. I have no doubt that they would want to offset any investment losses with premium hikes, but they don’t have the luxury of indulging this desire however and whenever they like.
Another explanation offered in the Fayetteville Observer story came straight from Dick Taylor, head of the North Carolina Academy of Trial Lawyers. Medical malpractice lawsuits have gone up because doctors are making more mistakes, he said. “The problem with medical malpractice is medical malpractice,” Taylor said.
Are we to believe that the propensity for physicians to commit medical malpractice is increasing? That is a highly dubious proposition. The science and the technology of medicine are advancing rapidly. New drugs are reducing the need for some invasive and dangerous surgeries. I have trouble believing that Dick Taylor said this with a straight face.
It is certainly true, of course, that we may be seeing an increase in allegations of malpractice. But as with many other reported data, one must be careful not to confuse an increase in occurrences with an increase in the reporting of occurrences. Obviously there is a much stronger incentive than there used to be to accuse a doctor of malpractice – thanks to Taylor’s colleagues and the politicians who champion their interests.