• If medical malpractice insurance rates are driving doctors out of business, why are there more doctors? Tuesday, January 5, 2010

    One of the arguments the “tort reform” crowd uses to justify putting a cap on the amount of money a jury can award to a victim of medical negligence is their assertion that increases in the cost of malpractice insurance are driving doctors out of the business.  (Of course, this argument presumes that when insurance companies’ payouts on claims go down, the premiums they charge doctors go down along with it, which we’ve noted earlier doesn’t seem to be the case.)

    Are doctors are being driven out of the business?  And is that a phenomenon limited to states that don’t have caps on damage awards?

    Well, if doctors are abandoning their practices, many more are coming in to take their place.  The most recent data from the American Medical Association shows there are more doctors in the U.S. than ever.  And there are also more doctors per capita now than ever.  In 2008, the most recent year for which data exists, there were 309 doctors for every 100,000 people.  That’s double what it was when the AMA first began collecting data in the 1960s.

    Furthermore, there are more doctors per capita in states that don’t limit the amount that can be awarded to victims of negligence than there are in states that have implemented caps.  The American Association for Justice broke down the numbers and found there are 21% more doctors per capita in states that don’t restrict compensation that there are in states with caps:

    Number of physicians

    For example, in California, where there has been a cap on non-economic damages since 1975, the number of doctors has  increased faster than the rise in population over the past five years.  In 2008 the number of doctors per capita was 5.4% higher than it was in 2004:

    California physicians

    And in New Jersey, a state that has no limits on what juries can award victims of malpractice?  The same steady climb over the five-year period, the same 5.4% increase from 2004 to 2008…and even more doctors per capita:

    New Jersey physicians

    The bottom line:  don’t assume caps on medical negligence awards really accomplish what their proponents claim.

  • Where’s the evidence that doctors flock to states with caps on medical malpractice damage awards?
  • Medical malpractice insurance is a very good business
  • Medical negligence damage caps in Texas benefit only doctors, insurers
  • Even without malpractice caps, New York has added more doctors per capita than Texas
  • Insurance companies reap benefits of medical negligence caps

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