Empirical evidence on the root of soaring medmal premiums?

October 1, 2006

A report from the Manhattan Institute Center for Legal Policy found a strong correlation between medical malpractice premiums and tort awards over time and across states. It found that for every $1 increase in tort awards, there is an equal $1 increase in medmal premiums over time.

A report from the Manhattan Institute Center for Legal Policy found a strong correlation between medical malpractice premiums and tort awards over time and across states. It found that for every $1 increase in tort awards, there is an equal $1 increase in medmal premiums over time.

The report, "Medical Malpractice Awards, Insurance, and Negligence: Which are Related?" also took issue with other reasons that have been given to explain soaring premiums. It found that the primary explanation for changes in premiums is tort award levels, not the oft-cited loss of investment returns or price gouging by insurers.

Sen. Edward Kennedy, D-Mass., told Medical Liability Monitor (06/2006) that the report put to rest "the empirical dispute on the root cause of soaring medical malpractice premiums. Rather than blaming insurance companies and price gouging, the authors emphasize the impact of tort awards on the high cost of medical malpractice insurance."