Medical Malpractice News

Summary of GAO Report

"Medical Malpractice: Implications of Rising Premiums on Access to Health Care" by the General Accounting Office, GAO-03-836, August 29, 2003

For a copy of complete study, please visit http://www.gao.gov/cgi-bin/getrpt?GAO-03-836

The latest report of the non-partisan General Accounting Office, the research arm of Congress, proves that the supposed "crisis" of access to medical care as a result of medical malpractice insurance premium increases - as alleged by the American Medical Association (AMA), the insurance industry, and some politicians - doesn't exist, or has been extremely overblown.

The report was requested by three Republican House leaders. The comprehensive analysis suggests that the AMA, which had sought to delay release of the report until it could influence the data, misled the American people, state and federal legislators, the news media and even doctors. The GAO report suggests the following:

• There is no health care access "crisis" resulting from medical malpractice insurance problems. GAO finds that doctors' groups have misled, fabricated evidence, or, at the very least, wildly overstated their case about how these problems have limited access to health care. The health care access problems that GAO could confirm were isolated and the result of numerous factors having nothing at all to do with the legal system. Specifically, GAO found that these pockets of problems "were limited to scattered, often rural, locations and in most cases providers identified long-standing factors in addition to malpractice pressures that affected the availability of services."
  

• Physician "surveys" are unreliable. AMA admitted that their 2003 physician survey had an unacceptably low response rate. When GAO attempted to obtain data from the AMA survey for individual states, including five that "were among the most visible and often-cited examples of 'crisis' states by the AMA and other provider groups," the "AMA did not release the data out of concern that response rates for these states were unacceptably low." GAO agreed, finding that "the response rate for this survey was low (10 percent overall)," "raising questions about how representative these responses were of all physicians nationwide." Furthermore, the report specifically criticizes as unreliable the two data sources relied on by the doctors: PIAA and Jury Verdict Research.
  

• Claims payments have grown far slower than inflation, in states both with and without caps. GAO correctly measured growth in claims on a per capita basis, rather than on an aggregate basis. This is the right way to do it, making it clear that claims payments have grown far slower than any measure of inflation, in both cap states and non-cap states. To the extent that GAO finds that claims and premiums have risen faster in states with caps than without, GAO notes wide variations among states in any given year and within individual states from year to year.
  

• The tort system does not encourage unnecessary defensive medicine. GAO notes that (1) some defensive medicine is good medicine, (2) managed care discourages bad defensive medicine, and (3) doctors do defensive medicine because they make money from defensive medicine. GAO criticizes the U.S. Department of Human Services (HHS) for publishing a wildly inflated estimate, based on an improper methodology, of costs from defensive medicine. GAO found that "reports that use the results of … studies [cited by the AMA] to estimate defensive medicine practices and costs nationally are not reliable."
  

• It's the insurance companies, stupid. GAO notes that malpractice rates reflect not past or present investment income, but rather the investment income insurers expect to earn in the future. Because interest rates are at historic lows, and because about 80 percent of malpractice insurers' investments are in bonds, insurers' projections of their future investment income are likely to be even lower than the already-low returns of the recent past. Nevertheless, GAO observes, "none of the insurers that we consulted regarding this issue told us definitively how much the decreases in investment income had increased premium rates."
  Report says almost nothing about malpractice litigation itself. Is there actually an explosion of lawsuits? Are damage awards skyrocketing? While studies exist showing that the number of medical malpractice cases filed and the total payout for medical malpractice claims have both remained relatively stable over the past twenty years, there is no evidence in the GAO report to speak to these issues. Thus, the GAO report provides no foundation for a conclusion that litigation is driving the increase in premiums.
  

• AMA tried to delay the release of the report. It is no real exaggeration to say that this report is extremely devastating to the AMA's case and that they wanted to delay releasing it. In fact, AMA asked GAO to review additional data before releasing the report. However, GAO had already reviewed the data and did not change its conclusions.
  

• Overall, the GAO report concludes…First, there is not a crisis. The GAO's examination of "crisis" states found just the opposite to be true. And while rural areas, not surprisingly, experienced some losses of doctors and access to medical care, overall access to medical care was not affected. Second, malpractice lawsuits are not the sole cause - or even the principal cause - of medical access problems and rising malpractice claims and insurance premiums.

  "The problems we confirmed were limited to scattered, often rural, locations
  and in most cases providers identified long-standing factors in addition
  to malpractice pressures that affected the availability of services."

September 2003