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Wednesday, June 1st 2005

AMA on Malpractice Premiums

From Kevin, M.D. :

This is a talking points on malpractice reform myths put out by the American Medical Association.

I’m unsure if this figure cited in the AMA pamphlet can be contested. Perhaps, there are different ways to figure such ratios but I don’t know how, if this figure is true, that anyone can claim the medical malpractice insurance industry is not in crisis if they paid out $1.53 in med mal claims for every $1.00 collected in premiums. There is no way, in my mind, that insurance companies have sources outside of premiums (i.e. investments) that account for over 1/3 of their income. That would need to be a case for them to pay out $1.53 for every dollar collected and still make a profit.

I suppose there still may be debate on what has caused this underlying financial strain — bad investments, past undervaluation of premiums, or, as I believe, an increase in frivolous malpractice cases.