Report says malpractice claims drop while premiums rise

ST. LOUIS -- Medical malpractice insurers paid out significantly less in claims to Missouri physicians last year, but continued to raise the premiums they charge doctors, according to a new study.

The National Association of Insurance Commissioners compiled the report from information insurance carriers submitted for last year.

A key figure for insurers is the loss ratio -- the ratio between the amount the company projects it will ultimately pay out and the amount of premium it takes in. The study showed that the loss ratio for Missouri malpractice carriers dropped by nearly 35 percent last year.

In Missouri, premiums increased 8.4 percent as direct losses dropped 26 percent.

"Overall, I would say the improvement is significant," said Doug Ommen, deputy director for the Missouri Insurance Department. But he said he would not speculate on the reason.

The report also draws no conclusions.

Calvin Call, executive director of the Missouri Insurance Coalition, said he doesn't dispute the report's figures.

"They show an industry on the mend," he said. "You're going to see fewer rate increases and, in some cases, rate decreases."

The insurance industry maintains that virtually all studies comparing premiums to payouts are flawed because they don't take into account future expenses that can only be estimated. The studies also exclude hospitals that self-insure.

Republican Gov. Matt Blunt signed legislation earlier this year that imposes new restrictions on medical malpractice and other injury lawsuits. Among other things, it caps damages for pain and suffering at $350,000 in medical malpractice cases.

Blunt and Republican legislators contend the law, which takes effect Aug. 28, should help lower medical malpractice premiums for physicians.

But Jay Angoff, an attorney who is a former Missouri insurance commissioner, said the recent report shows that "the facts are 180 degrees different" from what backers of the new law had argued.

The report "means the industry was wildly, breathtakingly profitable in 2004," Angoff said.