Are med-mal premiums really linked to lawsuits?

Increasing legal costs may not be at the root of skyrocketing medical malpractice premiums, according to The New York Times (2/22/05). The Times reported that data from the National Practitioner Data Bank showed that the average medical malpractice payout fell from $268,605 in 2003 to $262,486 in 2004. During the same period, the number of payments made by insurers dropped from 18,996 to 17,696.

So what accounts for increasing malpractice premiums? Some suggest that declining investment earnings of insurance companies and a shift in competition in the industry are to blame. But with "headline-grabbing big awards" and data from the Physicians Insurers Association of America showing a rise in payments of more than $1 million to injured patients between 1993 and 2003, payouts for lawsuits may continue to "muddy the public picture," according to the report.