Implication of Increasing Premium Rates Essays

Implication of Increasing Premium Rates Essays Implication of Increasing Premium Rates Paper Implication of Increasing Premium Rates Paper Medical malpractice insurance should be a necessity for all healthcare providers such as physicians, medical assistants, nurses, and other medical staffs. This will enable them to be protected from liabilities and lawsuits from considered â€Å"negligent acts† such as mistakes, accidents, and oversights that may cause injuries or harm to the patients. These mistakes are unpredictable despite the skills the medical practitioners have (Rodgers). Medical malpractice may either be failure to diagnose, misdiagnosis, improper treatment or delay in treatment. There are many cases of malpractice such as wrong kidney operation, wrong treatment for flu, or wrong eye operation. Claims other than this have been increasing over the past years. Physicians are able to escape such liabilities through medical malpractice insurance. However, premium rates in medical malpractice insurance have been increasing over the past years. In 2003, the General Accounting Office of the United States released a report on medical malpractice insurance and the factors that have contributed to the increase of premium rates. The study was conducted in order to analyze the problem of physicians regarding the increases of premium rates. Physicians were agonizing that they can no longer afford the malpractice insurance and they would be limiting their services, as a result. On the other hand, some insurers stopped selling malpractice insurance because of little profitability (Medical Malpractice Insurance 2003). GAO found out several factors that contributed to the increase of premium rates such as falling investment income and rising reinsurance costs resulting to the increase of total expenses that other premium covers (Medical Malpractice Insurance 2003). The increasing trend in the premium rates of malpractice insurance began in the mid-1970s until the 1980s because of the many claims causing some insurers to stop in coverage. Also, physician-owned insurance companies replaced other liability carriers whose aim was to earn more profit. The trend severed in the 1980s when premium increased much more. In order to regulate the increasing trend, states passed laws to decrease premium rates (Thorpe, 2004). By the 1990s, increases in premium rates continued in several states such as Pennsylvania. The crisis in the increasing premium rates trend caused some large insurers to close down such as the St. Paul Companies. Additionally, processing claims by patients may take more than two years thus making it hard for insurers to set premiums (Mello, 2006). Physicians in West Virginia rallied against the high premiums which slowed down the New Jersey and caused closing of heath services temporarily. There were also follow up rallies in Connecticut and other states (Thorpe, 2004). Obstetricians, gynecologist and neurosurgeons are greatly affected by the high premium rates causing some practitioners to stop providing healthcare services. Martha Drohobyczer, a nurse midwife, for example, was not able to deliver the baby of her three-year long patient who was about to give birth to her first baby. Drohobyczer cannot afford the newly increased malpractice insurance costing $50,000 a year. Therefore, she would not be able to provide the services that her patients needed (Babula, 2002). In 2003, the physician-owned Medical Insurance Exchange of California (MIEC) ended coverage in Nevada. MIEC has been providing insurance fro physicians in Nevada for 25 years. This move by the MIEC was feared to lead the trend of insurance companies closing down (Babula, 2003). Last March 2007, the Americans for Insurance Reform released a report about the stable losses or the unstable rates of medical malpractice insurance. By 2005, physicians paid $13,000 premium with $5,400 direct losses paid. This means that doctors paid $5,400 annually to people who claimed to be injured plus the amount the insurance companies paid for lawyers (Medical Malpractice Inusrance: Stable Losses/Unstable Rates 2007, 2007). References Babula, J. (2002). Medical Malpractice Crisis: Insurance costs driving doctors away. Retrieved October 19, 2007 from reviewjournal. com/lvrj_home/2002/Jan-23-Wed-2002/news/17929548. html Babula, J. (2003). Another insurance firm set to leave. Las Vegas Review-Journal. Retrieved October 19, 2007 from reviewjournal. com/lvrj_home/2003/Jul-31-Thu 2003/news/21845688. html Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates. (2003). ): United States General Accounting Office. Retrieved October 19, 2007 from gao. gov/new. items/d03702. pdf Medical Malpractice Inusrance: Stable Losses/Unstable Rates 2007. (2007). ): American for Insurance Reform. Retrieved October 19, 2007 from insurance reform. org/StableLosses2007. pdf Mello, M. M. (2006). Understanding Medical Malpractice Insurance: A Primer. Robertwood Johnson Foundation, 1-20. Retrieved October 19, 2007 from rwjf. org/pr/synthesis/reports_and_briefs/pdf/no8_primer. pdf Rodgers, D. Importance of Professional Liability and Malpractice Insurance. Retrieved October 19, 2007, from http://profiles. friendster. com/user. php Thorpe, K. E. (2004). The Medical Malpractice ‘Crisis’: Recent Trends And The Impact Of State Tort Reforms. Health Affairs. Retrieved October 19, 2007 from http://content. healthaffairs. org/cgi/content/full/hlthaff. w4. 20v1/DC1