GAO report refutes malpractice insurance 'crisis'.

A report by the U.S. General Accounting Office (GAO), Congress's nonpartisan research arm, gives those fighting for injured patients new evidence that the medical malpractice liability, "crisis" is a myth.

Medical Malpractice: Implications of Rising Premiums on Access to Health Care (GAO-03-836), was issued in August. Researchers examined nine states, five of which--Florida, Mississippi, Nevada, Pennsylvania, and West Virginia--the American Medical Association (AMA) classified as "crisis" states. After doctors in these states experienced higher-than-average increases in malpractice insurance premiums, they took action "in response to their concerns about rising premiums and malpractice litigation," the AMA claimed. Their actions ostensibly included reducing services, leaving the states, and even abandoning medical practice altogether.

After investigating these claims, the GAO rejected the notion of any "crisis," declaring that "many of the reported physician actions and hospital-based service reductions were not substantiated or did not widely affect access to health care."

The researchers said that while "some reports have received extensive media coverage in each of the five states, we found that actual numbers of physician departures were sometimes inaccurate or involved relatively few physicians." And despite reports that some providers had cut back on services to minimize their litigation risk, the GAO "did not find access to these services widely "affected" in the five "crisis" states.

In Florida and Pennsylvania, for example, investigators reviewed reports that mammogram services had been reduced. The GAO found that "utilization of these services among Medicare beneficiaries is higher than the national average in both [states]."

Restricting patients' rights 

The GAO report was commissioned by three members of the House of Representatives who hoped the researchers would uncover evidence to bolster their argument that federal limits must be placed on medical liability. The congressmen--James Sensenbrenner (R-Wis.), chair of the House Judiciary Committee; Billy Tauzin (R-La.), chair of the House Energy and Commerce Committee; and Steve Chabot (R-Ohio), chair of a House Judiciary subcommittee--had supported a bill to cap damages and place other restrictions on patients' rights to the medical malpractice claims.

Their support for H.R. 5--the so-called HEALTH Act--helped the House of Representatives pass that bill last March. The Senate later voted down a motion to proceed to consideration of the bill, but proponents have kept the issue alive, hoping the Senate will consider at least some version of the legislation next year.

When the report first surfaced, the AMA asked investigators to review additional data it had collected and to delay releasing a final report. The GAO responded that it had already reviewed the AMA's data and declined to change its conclusions. Instead, the final report suggested that the data were suspect.

"With respect to AMA's reference to evidence available from its own survey, our report notes that the low response rate of 10 percent to its survey precludes the ability to reliably generalize survey results," the researchers wrote. "Two of the three government studies that [the] AMA cited are examples of what we believe to be overgeneralizations of prior study results."

Five weeks after the report was issued, the House Government Reform subcommittee held a hearing to examine the "surge" in malpractice insurance rates. In an opening statement, Committee Chairman Dan Burton (R-Ind.), appeared to refer to an earlier GAO report when he defended H.R. 5's cap on noneconomic damages, "which, according to a U.S. General Accounting Office report, is what has fueled the drastic increase in medical malpractice premiums."

Burton may have been citing a June report, Medical Malpractice Insurance: Multiple Factors Have Contributed to Premium Rate Increases (GAO-03-702). But he misstated that report's central conclusion that many factors--not just high damages awards--have contributed to premium rate increases.

Culprits uncovered

The GAO reiterated that finding in its August report, pointing out that, for example, malpractice insurers experienced sharply reduced gains on their investments from 1998 to 2001. This meant that their income from premiums had to cover a larger share of costs. The GAO explained that insurers' investment income declined "as interest rates fell on the bonds that generally make up around 80 percent of these insurers' investment portfolios."

The researchers also found that insurers competed "vigorously for medical malpractice business ... [offering] prices that, in hindsight for some insurers, did not completely cover their ultimate losses on that business."

For injured people and their families, the GAO's findings provide a welcome counterpoint to the misleading anecdotes and other misinformation that lawmakers and the media receive from those seeking to limit patients' rights. The GAO investigations reveal that there is no "crisis" and that malpractice suits are not the sole cause of rising insurance premiums for doctors.

KRISTIN LOIACONO is associate director for media outreach and coalition development in ATLA's Media Relations department.