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Life Health > Health Insurance

Hospital Group Calls For Liability Relief

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NU Online News Service, June 27, 5:15 p.m. — Washington

Physicians are responding to medical liability insurance rate increases in ways that could reduce patient access to health care, according to researchers from The Lewin Group, Falls Church, Va., and the American Hospital Association, Washington.

When the researchers reviewed recent survey data, they found that rates for key specialties are increasing in every state and skyrocketing in some.

In Pennsylvania, for example, typical 2002 rate increases for liability insurance for internal medicine providers, general surgeons and obstetrician/gynecologists ranged from 40% to 81%, the researchers write in an analysis in the June edition of the AHA’s TrendWatch newsletter.

“Some physicians are retiring or relocating to areas with lower premiums, and hospitals are reporting increased difficulty securing physician coverage,” the researchers write.

Physicians are also cutting back on high-risk services, such as delivering babies and handling certain types of surgery, the researchers report.

The researchers cite two main reasons for the premium increases:

  • The amount of money paid per liability claim has increased 58% since 1996, to $158,000.
  • Insurance company investment income has declined, leading many companies to raise premiums.

Compounding the problem is the fact that some major insurers are leaving the medical liability market, the researchers write.

The AHA and other insurer and provider groups are calling for federal legislation to rein in the rising costs. Their recommendations include limits on non-economic damages; limits on the time allowed for filing claims; limits on attorney contingency fees; and penalties for frivolous lawsuits.

Representatives for the trial lawyers and some patient advocacy groups argue that fear of malpractice suits gives physicians and hospitals an incentive to deliver high-quality care.

But the AHA says medical liability concerns raise the cost of care and lower its quality, by encouraging providers to practice defensive medicine.

The AHA has posted the report on the Web at


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