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Maryland Doctors Do Not Face a Medical Malpractice Insurance Crisis, Public Citizen Report Shows

WASHINGTON, D.C. – Contrary to claims by the Maryland State Medical Society and Medical Mutual insurance company, physicians in Maryland are not facing a "crisis" in medical malpractice insurance rates caused by a rash of malpractice lawsuits and skyrocketing jury awards, according to a Public Citizen report released today.

Data from government sources show that in recent years the number of medical malpractice lawsuits per physician in Maryland has declined significantly; the total and average amounts of medical malpractice payouts to victims have declined dramatically; the number of $1 million-plus payouts has plummeted; and the doctor population is increasing.

These findings stand in stark contrast to claims made by the Medical Society and Medical Mutual, the largest insurer of doctors in the state – claims that were used to justify a recent 28 percent increase in medical malpractice insurance rates granted by the state insurance department. Both groups are gearing up to demand that the state legislature pass a law that will significantly limit a patient’s ability to hold a health care provider fully accountable for negligence.

The study’s most dramatic finding is that just 3 percent of Maryland’s doctors have been responsible for 50.8 percent of malpractice payouts to patients since 1990, when the federal National Practitioner Data Bank (NPDB) began collecting such information. These 576 doctors each have made at least two payouts. Conversely, 89.4 percent of Maryland’s doctors have never made a malpractice payout.

"There is no medical malpractice lawsuit problem in Maryland," said Frank Clemente, director of Public Citizen’s Congress Watch and an author of the study. "Marylanders need to look beyond the scare tactics of the Medical Society. It would be a huge mistake to restrict patients’ legal rights so that they cannot hold doctors, hospitals and insurance companies fully accountable for deaths or serious injuries."

Click here to view the 58-page report, The Facts About Medical Malpractice in Maryland.

Other major findings about Maryland in the report include:

The number of medical malpractice legal claims filed per physician has dropped 17.6 percent since 1996 – from 3.4 claims per 100 physicians in 1996 to 2.8 claims per 100 physicians in 2002, according to Maryland Office of Health Claims Arbitration data.
After annual medical malpractice payouts reported by the NPDB are adjusted for medical inflation, the total amount dropped 17.9 percent from 1996 to 2002. Malpractice payouts declined from $71.3 million in 1996 to $58.5 million in 2002 in adjusted dollars. In equivalent dollars, liability insurers paid $12.8 million less in 2002 than they paid in 1996.
 
The mean medical malpractice payout to injured patients dropped 29 percent from 1996 to 2002, after adjusting for medical inflation, according to NPDB data. The mean malpractice payout dropped from $310,100 in 1996 to $220,083 in 2002 – $90,017 less.

There were only three medical malpractice payouts of $1 million in each of the past two years, compared with eight payouts of $1 million or more in 1996 and 2000, according to NPDB data.
There is no "exodus" of doctors from Maryland. The doctor population has increased an average of 1.2 percent a year since 1996, and the state has the fourth highest ratio of doctors-to-population among all 50 states and Washington, D.C.

The cost of medical negligence and errors to Maryland patients and consumers is considerable. Based on findings by the Institute of Medicine, Public Citizen estimates that there are 836 to 1,862 hospital deaths in Maryland each year that are due to preventable medical errors – costing residents, families and communities $323 million to $551 million each year. This is far below the annual $155.1 million cost of medical malpractice insurance to Maryland’s health care providers.

Doctors with repeated malpractice claims against them suffer few consequences. Only 20.6 percent (37 of 180) of Maryland doctors who made three or more malpractice payouts since 1990 were disciplined by the Maryland Board of Physician Quality Assurance. Moreover, Maryland in 2002 ranked 46th among all states and the District of Columbia for the frequency at which it takes serious disciplinary actions against doctors for incompetence, misprescribing drugs, sexual misconduct, criminal convictions, ethical lapses or other offenses, according to Public Citizen’s analysis.
While the report finds that Medical Mutual’s 28 percent rate hike is not justified, it found that overall, since 1996 Medical Mutual kept its rate increases for malpractice insurance well behind the rising cost of medical services. For instance its "midpoint" premium (for general surgery) declined 15.9 percent from 1996 to 2002. This suggests the company kept rates artificially low to gain market share. Medical Mutual also had much lower investment returns in recent years. The combination of these two factors, and other problems with the "insurance cycle," suggest that industry economics – not lawsuits – were the impetus behind the company’s request for a 28 percent rate increase.

Homeowners’ insurance rates have increased 8.6 percent a year since 1996 – at least twice as fast as Medical Mutual’s insurance rates – suggesting an insurance industry, not litigation, problem.

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