Survey: California Medical Liability Premium Rates Unchanged in 2014
A recent survey found that medical liability insurance premiums remained flat in California from 2013 to 2014 for three common specialties, but opponents of a ballot measure that would raise the state's cap on pain-and-suffering awards in medical malpractice lawsuits say the initiative could raise liability premiums and increase costs for consumers, Modern Healthcare reports (Schencker, Modern Healthcare, 10/30).
Proposition 46 aims to improve patient safety by:
- Increasing the state's $250,000 limit on pain-and-suffering awards in malpractice lawsuits to $1.1 million and adjusting it for future inflation;
- Requiring doctors to undergo random drug-testing; and
- Requiring doctors to use a prescription drug-reporting system.
The measure will appear on the state's Nov. 4 ballot (California Healthline, 10/24).
The survey, conducted by the Medical Liability Monitor, found that medical liability insurance rates nationwide from 2013 to 2014 fell by:
- 1.3% among general surgeons;
- 1.6% among internal medicine physicians; and
- 1.7% among ob-gyn doctors.
The northeast U.S. was the only region to experience an increase in medical liability premiums, rising by an average of 0.1% (Medical Liability Monitor release, 10/10).
Liability premiums in the western U.S. dropped by an average of 4.1% from 2013 to 2014, according to the survey. In California, liability insurance rates remained flat.
According to Modern Healthcare, the flat and declining rates can be attributed to:
- Competition within the liability insurance market;
- Fewer claims; and
- Hospitals hiring more doctors.
Brian Atchinson, CEO of the Physician Insurers Association of America, said rates have grown "dramatically less" in states, such as California, that have limited pain-and-suffering awards. For example, malpractice insurance rates for internists in California ranged from $4,168 to $15,379, while rates in states with no cap exceeded $30,000 in some cases.
Implications of Prop. 46
A July report issued by the California Legislative Analyst's Office found that raising the state's cap on non-economic damages could increase health care spending by:
- Increasing the number of claims and damage payouts; and
- Increasing defensive medicine.
Specifically, the report estimated that health care spending in California would increase by 0.1% to 0.5% if the cap is increased.
Molly Weedn -- a spokesperson for the California Medical Association, which opposes the measure -- said, "Quadrupling the cap on non-economic damages will incentivize more lawsuits and result in significantly higher awards for speculative non-economic damages, thereby increasing malpractice costs and resulting in higher malpractice insurance premiums" (Modern Healthcare, 10/30).
Meanwhile, supporters -- including trial attorneys and patient advocates -- say the limit in the malpractice law is outdated and should be updated and adjusted for inflation (California Healthline, 10/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.