Since the dawn of the new millennium, medical malpractice insurance costs have soared. Several factors have been responsible for this problem. First, the proportion of jury awards or settlements going to administration and legal costs has increased to about 60%. This has encouraged more attorneys to become involved in medical malpractice case litigation. Second, in the nineties, the "soft" pricing of malpractice insurance resulted in heavy losses for most insurance companies, and many went out of business, or simply withdrew from the market. Third, many specialties are now regarded as extremely risky; for example, emergency medicine. Last, society has become more litigious overall.
Many types of proposals to help improve the situation have been proposed or implemented. For example, states are becoming increasingly involved in either tort reform, such as the model MICRA legislation in California. Others are insuring certain physicians who could not obtain malpractice insurance to prevent their egress from certain geographic areas of service by using different kinds of tax pools. Some are even experimenting with "no fault" types of proposals that would guarantee patients minimum awards in exchange for not litigating their cases. Many states also say that if discipline review boards were more proactive regarding the few percent of physicians who cause the most malpractice cases, the problem would be vastly lessened.
Basic malpractice insurance comes in two "flavors": an "occurrence-type" policy under which a physician is covered when any person sues for medical malpractice, so long as the incident occurred when the physician was insured at the time; and a "claims-made" policy, under which the physician is covered against a person who sues for medical malpractice provided the incident occurred while the physician was still insured with the carrier, and that at the time the person sued, the physician was still insured with the carrier. Unfortunately, due to the fact that several years typically elapse between the incident and the filing of a lawsuit, physicians, must in most cases, obtain a "tail" endorsement policy-- a supplemental or additional policy obtained at the time the physician leaves the insurance carrier, and which is 200-300% of the physician's last year's premium. (Free tail policies are given under certain circumstances.)
The reason many physicians opt for a claims-made policy is that it is cheaper in the first five years of the policy, because the physician does not present so much risk or exposure to the insurance carrier. Rates rise during each of the five years until they are equivalent to an occurrence-type policy.To combat rising rates, many physicians have formed joint underwriting organizations to issue occurrence-type policies. Other common ventures include the so-called "Captive Risk Retention" (CRR) group. An oft-quoted example is the group of Texas doctors who set up a captive to offer medical malpractice coverage to the 3,000 doctors working within the Memorial Hermann Health hospital system in 2003--policies were limited to $500,000 per claim, with a $1 million in aggregate claims per year. Whether such new groups, which in 2005 were estimated to cover about half the number of physicians in the USA, will help solve the problem is too early to tell.
Many types of proposals to help improve the situation have been proposed or implemented. For example, states are becoming increasingly involved in either tort reform, such as the model MICRA legislation in California. Others are insuring certain physicians who could not obtain malpractice insurance to prevent their egress from certain geographic areas of service by using different kinds of tax pools. Some are even experimenting with "no fault" types of proposals that would guarantee patients minimum awards in exchange for not litigating their cases. Many states also say that if discipline review boards were more proactive regarding the few percent of physicians who cause the most malpractice cases, the problem would be vastly lessened.
Basic malpractice insurance comes in two "flavors": an "occurrence-type" policy under which a physician is covered when any person sues for medical malpractice, so long as the incident occurred when the physician was insured at the time; and a "claims-made" policy, under which the physician is covered against a person who sues for medical malpractice provided the incident occurred while the physician was still insured with the carrier, and that at the time the person sued, the physician was still insured with the carrier. Unfortunately, due to the fact that several years typically elapse between the incident and the filing of a lawsuit, physicians, must in most cases, obtain a "tail" endorsement policy-- a supplemental or additional policy obtained at the time the physician leaves the insurance carrier, and which is 200-300% of the physician's last year's premium. (Free tail policies are given under certain circumstances.)
The reason many physicians opt for a claims-made policy is that it is cheaper in the first five years of the policy, because the physician does not present so much risk or exposure to the insurance carrier. Rates rise during each of the five years until they are equivalent to an occurrence-type policy.To combat rising rates, many physicians have formed joint underwriting organizations to issue occurrence-type policies. Other common ventures include the so-called "Captive Risk Retention" (CRR) group. An oft-quoted example is the group of Texas doctors who set up a captive to offer medical malpractice coverage to the 3,000 doctors working within the Memorial Hermann Health hospital system in 2003--policies were limited to $500,000 per claim, with a $1 million in aggregate claims per year. Whether such new groups, which in 2005 were estimated to cover about half the number of physicians in the USA, will help solve the problem is too early to tell.
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