Transcript Download Handout 2

The Medical Professional Liability Market –
What’s Happening and Is Tort Reform the Answer?
Richard S. Biondi, FCAS, MAAA
Milliman Evaluations of
CAPS on Non-Economic
Damages

New York (NY)

Florida (FL)

Pennsylvania (PA)
Milliman USA
MAIN DATA SOURCES

National Practitioner Data Base
Physicians Only
All Paid Claims
Countrywide & Every State

FL Dep’t of Insurance Data Base
Only Commercially Insured Claims
Includes Hospital Claims
More Detail per Claim

TX Dep’t of Insurance Data Base
All Paid Claims > $10,000
Includes Physicians & Hospital Claims
Milliman USA
OTHER DATA SOURCES

Physicians Insurance Ass’n of America
- Countrywide Only

Annual Statements
- All Insurers Consolidated

Rate Filings

US Government (e.g. census) Data
Milliman USA
CAPS on Non-Economic
Damages
State
CA
FL
NY
PA
CAP Status
$250k CAP since 1975
No CAP
No CAP
No CAP
Milliman USA
RESULTS
MedMal Paid Losses
between 1991 and 2000
State
CA
FL
NY
PA
% Increase
19%
153%
96%
94%
Milliman USA
RESULTS
2000 MedMal Paid Losses
/ Physician
State
CA
FL
NY
PA
Relative to
Countrywide
Average
42%
155%
160%
174%
Milliman USA
RESULTS
Non-Economic damages /
(Economic damages + NonEconomic damages)
FL Hospital
NY Physicians
TX Hospital & Physicians
77%
66%
59%
Milliman USA
RESULTS
Milliman estimates that a $250k
cap would reduce MedMal losses
by approximately:
FL
NY
PA
20%
30%
18%
Milliman USA
RESULTS
NPDB Medical Malpractice Loss Data for 15 Large
States and Nationwide
September 1, 1990 - April 30, 2001
National Claim and Loss Rate per Doctor Reported to the NPDB
(annual losses not trended)
CA
CO
Annual
Loss
per
Doctors Doctor
66,996 2,884
6,724 3,817
Relativity
0.52
0.69
DC
FL
3,068
26,394
7,901
7,508
1.44
1.36
IL
25,565
7,929
(Cont'd)
1.44
Status Re Caps
(Reference: Aug./Sept. 2002
Medical Liability Monitor)
$250K cap on non-economic damages.
$250K cap on non-economic damages.
$1M cap total.
No cap.
No cap for most claims.
Caps apply when parties arbitrate.
No cap. Declared unconstitutional.
Milliman USA
RESULTS
NPDB Medical Malpractice Loss Data for 15 Large
States and Nationwide
September 1, 1990 - April 30, 2001
National Claim and Loss Rate per Doctor Reported to the NPDB
(annual losses not trended)
IN
KS
MA
MD
MI
NJ
Doctors
9,607
4,673
20,089
Annual
Loss
per
Doctor
4,734
5,846
3,802
15,061 3,503
18,463 4,347
18,765 7,232
(Cont'd)
Status Re Caps
(Reference: Aug./Sept. 2002
Relativity Medical Liability Monitor)
0.86
$1.25M cap on total damages.
1.06
No cap. Declared unconstitutional.
0.69
$500K cap on non-economic damages
w/ exceptions.
0.64
$500K cap on non-economic damages.
0.79
$345K cap on non-economic damages.
1.31
No cap.
Milliman USA
RESULTS
NPDB Medical Malpractice Loss Data for 15 Large
States and Nationwide
September 1, 1990 - April 30, 2001
National Claim and Loss Rate per Doctor Reported to the NPDB
(annual losses not trended)
Doctors
NY
56,264
OH
22,401
PA
29,784
TX
29,004
All Others 181,034
Total
537,389
Annual
Loss
per
Doctor
8,610
6,443
9,386
6,083
4,363
5,502
Relativity
1.56
1.17
1.71
1.11
0.79
Status Re Caps
(Reference: Aug./Sept. 2002
Medical Liability Monitor)
No cap.
No cap. Declared unconstitutional.
No cap.
No cap.
Milliman USA