Medical malpractice insurance is only available to physicians so that they will be protected in the event of a judgment against them for medical malfeasance. Most states require that physicians have this type of insurance, even though most hospitals insist that a physician have this coverage before they can see patients at that hospital. There are some basic details to know about medical malpractice insurance.
- Ordinarily, a physician will buy medical malpractice insurance from either a mutual insurance company that is owned by physicians or a commercial insurance company. He can buy individual coverage or be under a policy that covers his entire group. Hospitals are also obliged to buy coverage for the physicians who are on their staffs. However, if you are a physician that is employed by the federal government, you need no such coverage, since any lawsuit would be against the federal government, which is self-insured.
- Since a physician is sued infrequently, the data is actuarially unsound, making it impossible for a physician to be "rated" based on past history. So, physicians are classified based on their specialties, and the rates are set accordingly. For example, as a group, orthopedic surgeons are more likely to have a suit brought against them than are internists, so the premiums they pay for malpractice insurance is higher. In addition, where the physician has his practice will also be factored in to the premiums
- Until about 2000, medical malpractice insurance premiums remained fairly flat. But since then, they have risen dramatically to the point that doctors in some specialties pay out almost half of their revenue in premiums. These rates have escalated as a result of medical claims growing exponentially, especially in the cities. Furthermore, many insurance companies found it more difficult to make a reasonable profit, so many of them exited the malpractice insurance business. Finally, as more cures are discovered, a greater risk is placed on physicians, and that has resulted in a rise in claims.
- With the rapid rise in malpractice insurance premiums and the onslaught of suits brought against doctors, the insurance companies that offer that coverage are finding it increasingly difficult to determine whether they are making a profit from that business. In addition, individual states have the responsibility of overseeing the insurance companies, and there has been no national consistency. For these reasons, insurance companies will either petition the states for more premium increases or they will cease doing business there. The doctors not only will pay higher premiums, they will have fewer insurance companies from which to choose.
- Several states have allowed such high premiums for some specialties that many doctors have left them for other states offering lower premiums. That has resulted in longer waits as well has higher medical bills for the public in those states.
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