Massachusetts Attorney Frank Riccio recently shared data regarding escalating malpractice premiums and the enormous payments being made to people injured by medical negligence. There are some pertinent findings, but as is typically said, let’s not let the facts get in the way…

The National Association of Insurance Commissioners just updated its statistics on direct premiums earned, direct losses incurred, direct defense and cost containment incurred, and loss and direct defense cost containment expenses ratios. The direct losses incurred have dropped from a high of $8,459,389,539 in 2003 to $3,655,161,296 in 2011. Without factoring in inflation, that represents a drop of a whopping 56.8% during those eight years.

The aggregate direct premiums earned, as shown above, have decreased five years in a row, from $12,167,900,762 in 2006 to $10,296,112,512 in 2011. Thus, malpractice insurance premiums are not “skyrocketing” as people sometimes claim. Despite the lower premiums, the loss ratios have fallen significantly. From a high of 126.83% in 2001, the last four years have ranged from 55.66% to 51.02%.

The payments reported to the National Practitioner Data Bank from 2001 through 2011 paint a similar picture, although the NPDB only includes payments incurred because of doctor, not hospital, negligence, so the numbers are somewhat lower than the NAIC numbers. The NPDB reports payments in 2004 of $4,397,780,000 and in 2011 of $2,820,910,000, a drop of 35.8%.

The NPDB statistics also show the number of payments for doctor negligence has declined ten years in a row:

2001 15,925
2002 14,978
2003 14,930
2004 14,304
2005 13,396
2006 11,677
2007 11,010
2008 10,533
2009 10,440
2010 9,458
2011 8,450

The number of payments in 2011 represents a reduction of 47% from the number of payments in 2001.

When you consider that there are approximately 1,503,323 people who die or are injured annually as a result of medical errors*, the number of people actually compensated is miniscule.

*[The $17.1 Billion Problem: The Annual Cost of Measurable Medical Errors, Health Affairs, April 2011, 30:4]