Medical Malpractice:

Six State Case Studies Show Claims and Insurance Costs Still Rise Despite Reforms

HRD-87-21: Published: Dec 31, 1986. Publicly Released: Dec 31, 1986.

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In response to a congressional request, GAO provided information on the medical malpractice insurance situation, problems, and reforms in six states to determine if their attempts since the mid-1970's to reduce insurance costs, the number of claims filed, and the average amount paid per claim were successful.

GAO found that: (1) most of the changes the states made focused on tort reforms to ensure the availability of malpractice insurance and to reduce its costs; (2) two states felt that their tort law changes helped to modify upward trends in insurance costs and in the average claim paid; (3) four states felt that their states' tort laws had little effect; (4) from 1980 to 1986, the cost of malpractice insurance increased in each of the states at a greater rate than the consumer price index and the medical care index; (5) rates of increase for hospitals ranged from 33 percent to 141 percent; (6) reported claims against physicians increased in each state, with the highest increase at 92 percent; (7) the frequency of claims increased in five states, with the highest increase at 27 percent; (8) the average claim paid against physicians increased significantly in five states; and (9) the average claim paid against hospitals increased in three states. GAO also found that the interest groups it surveyed believed that: (1) one state's statutory cap of $500,000 on malpractice awards was a major factor in decreasing awards and settlements; (2) the same state's pretrial screening process helped decrease the number of claims that went to trial; and (3) comprehensive malpractice legislation helped to moderate upward trends in insurance costs and award size in two states. GAO noted that there was little support among the organizations it contacted for federal involvement in the malpractice insurance problem because they felt that it should be dealt with at the state level.

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