IN THE SUPREME COURT OF MISSOURI
DEBORAH WATTS as Next Friend for ) NATHAN WATTS, ) ) Supreme Court No. 91867 Appellants/Cross-Respondents, ) ) vs. ) ) LESTER E. COX MEDICAL CENTERS, ) d/b/a FAMILY MEDICAL CARE ) CENTER, LESTER E. COX MEDICAL ) CENTERS, MELISSA R. ) HERRMAN, M.D., MATTHEW P. ) GREEN, D.O., WILLIAM S. KELLY, M.D., )
Respondents/Cross-Appellants. )
BRIEF OF PROFESSORS OF LAW AS AMICI CURIAE IN SUPPORT OF APPELLANTS
PROFESSOR NEIL VIDMAR Duke University School of Law Box 90360 Durham, NC 27708-0360 Lead Author
DAVID ZEVAN Bar No. 42312 1. N. Taylor St. Louis, MO 63108 (314) 588-7200 Attorney for Amicus Curiae
INDEX
APPENDIX A
BIOGRAPHIES OF AMICI ...... A-1
APPENDIX B
AMA COMPENDIUM ...... A-13
APPENDIX C
MO DEPT INSURANCE REPORTS ...... A-18
APPENDIX D
BUREAU OF JUSTICE STATISTICS DATA ...... A-222
APPENDIX E
AMA MEDICAL LIABILITY REFORM – NOW! 2005 ...... A-233
Appendix A: Amici Biographies
NEIL VIDMAR is the Russell M. Robinson II Professor of Law, Duke Law School, and Professor of Psychology at Duke University. He holds a Ph.D. in social psychology from the University of Illinois and conducts empirical studies on issues in the legal system, including the subject of medical malpractice litigation. He is co-author (with Cornell Law Professor and fellow amicus) Valerie Hans of THE AMERICAN JURY: THE VERDICT (2007) and JUDGING THE JURY (1986); author of MEDICAL MALPRACTICE AND THE AMERICAN JURY: CONFRONTING THE MYTHS ABOUT JURY INCOMPETENCE,
DEEP POCKETS, AND OUTRAGEOUS DAMAGE AWARDS (1995); and editor and author of WORLD JURY
SYSTEMS (2000). He has published more than 125 articles in law reviews and social science. He reviews research proposals for the National Science Foundation and serves or has served on the editorial boards of peer review journals such as Law & Human Behavior; Law & Society Review; Law & Social Inquiry; Journal of Applied Social Psychology; Public Policy & Law; and the Journal of Empirical Legal Studies. Among those articles are: "Judicial Hellholes:" Medical Malpractice Claims, Verdicts, and the "Doctor Exodus" in Illinois, 59 Vanderbilt L. Rev. 1309 (2006); Million Dollar Medical Malpractice Cases in Florida: Post-Verdict and Pre-Suit Settlements, 59 Vanderbilt L. Rev. 1343; Medical Malpractice Lawsuits: An Essay on Patient Interests, The Contingency Fee System and Social Policy, 38 Loyola of Los Angeles L. Rev. 1221 (2005); Uncovering the 'Invisible' Profile of Medical Malpractice Litigation: Insights from Florida, 54 DePaul L. Rev. 315 (2005). Ralph Brill,He has also tendered affidavits bearing on tort cases in various states, including Best v. Taylor Machine, 179 Ill.2d 367, 689 N.E.2d 1057, 228 Ill. Dec. 636 (1997). Vidmar has lectured on judging scientific evidence for judicial education programs in the United States, Canada, Australia and New Zealand.
TOM BAKER is Professor of Law at University of Pennsylvania School of Law. From 1997 to 2008, he was the Connecticut Mutual Professor of Law and Director of the Insurance Law Center at the University of Connecticut. He teaches, researches, and writes about insurance, risk, and responsibility in a wide variety of settings, using methods and perspectives drawn from economics, sociology, and history, as well as law. His book, THE MEDICAL MALPRACTICE MYTH (Univ. of Chicago Press 2005), pulls together the empirical research on medical
A-1 malpractice and liability and proposes an evidence-based approach to medical liability reform. He is the author of INSURANCE LAW AND POLICY: CASES, MATERIALS AND PROBLEMS (Aspen 2003; 2nd ed. 2008) and many articles and book chapters. He also is a contributing editor of EMBRACING RISK: THE CHANGING CULTURE OF INSURANCE AND RESPONSIBILITY (Univ. of Chicago Press 2002), which helped to establish the emerging sociology of risk and insurance. Among his numerous articles are: Medical Malpractice and the Insurance Underwriting Cycle, 54 DEPAUL L. REV.393 (2005) and Reconsidering the Harvard Medical Practice Study Conclusions about the Validity of Medical Malpractice Claims, 33 J.L. MED. & ETHICS 501 (2005). Baker has taught insurance and related courses at Columbia Law School, the University of Miami School of Law, Vanderbilt Law School, Yale Law School, and the Faculty of Law at the Hebrew University of Jerusalem, in addition to the University of Connecticut and the University of Pennsylvania. A member of the Scientific Committee of the Geneva Association for Risk and Insurance Studies, he regularly lectures on insurance in academic and professional settings. He is the founder and facilitator of the Insurance and Society Study Group, an interdisciplinary group of scholars engaged in insurance-related research. Before entering law teaching at the University of Miami, Professor Baker clerked for Hon. Juan R. Torruella of the United States Court of Appeals for the First Circuit, practiced with the firm of Covington & Burling, and served as Associate Counsel in the Office of Independent Counsel (Walsh) investigating Iran-Contra. He received his B.A. and J.D. from Harvard University, magna cum laude.
RALPH L. BRILL has been a member of the faculty of Chicago-Kent College of Law, Illinois Institute of Technology, since 1961. He has served in administrative positions as Dean, Associate Dean and Director of Research and Writing during that time. He has taught Torts and Tort-related courses for most of those years. He also has served as consultant to lawyers and law firms in several landmark cases, including as co-author of the Illinois Trial Lawyers Association amicus briefs in Wright v. Central DuPage Hospital, 63 Ill. 2d 313 (1976) (caps on damages and required screening panels in malpractice cases unconstitutional), and Lee v. Chicago Transit Authority, 152 Ill. 2d 432 (1992) (CTA had duty to warn foreseeable trespasser of dangers of the electrified third rail). For three years, Professor Brill published, for Shepard’s Inc., The Illinois Tort Reporter, and published numerous articles analyzing aspects of Illinois tort
A-2 law and practice. Active in all aspects of professional activity, Professor Brill has served as chairs of the Civil Rights and Responsibilities Committee and the Communication Skills Committee of the American Bar Association, the Development of the Law Committee and Legal Education Committee of the Chicago Bar Association, and on the Boards of the Legal Writing Institute, the Association of Legal Writing Directors, The Illinois Institute for Continuing Legal Education, and the Children’s Legal Clinic. For a combined task force of the Illinois Bar Association and Chicago Bar Association, Professor Brill drafted the Minimum Continuing Legal Education Rules adopted by the Illinois Supreme Court.
MARTHA CHAMALLAS holds the Robert J. Lynn Chair in Law at the Moritz College of Law at the Ohio State University, where she teaches Torts, Employment Discrimination and Feminist Legal Theory. The University recognized her excellence by naming her as one of the two campus-wide University Distinguished Lecturers for the academic year 2006-2007. Prior to joining the Moritz College of Law in 2002, Professor Chamallas was on the faculty at the University of Pittsburgh School of Law. She also has taught at Louisiana State University Law Center, the University of Iowa College of Law, Washington University School of Law, and the University of Richmond School of Law. Professor Chamallas earned a B.A., cum laude in Sociology from Tufts University in 1971 and a J.D. (Order of the Coif), from Louisiana State University Law Center in 1975. Following graduation from law school, Professor Chamallas clerked for the Honorable Charles Clark of the U.S. Court of Appeals for the Fifth Circuit and served as an attorney for the U.S. Department of Labor, Office of the Solicitor, Civil Rights Division. She is the author of INTRODUCTION TO FEMINIST LEGAL THEORY (2d ed. 2003) and more than 50 book chapters, articles, essays, and other scholarly publications including, Vanished From the First Year: Lost Torts and Deep Structures in Tort Law in CANONS OF LAW (Jack Balkin & Sanford Levinson, eds., 2000); The September 11th Victim Compensation Fund: Rethinking the Damages Element in Injury Law, 71 TENN. L. REV. 51 (2003).
STEPHEN DANIELS is a Visiting Lecturer at the Sturm College of Law, University of Denver and a Research Professor at the American Bar Foundation in Chicago, IL. He holds a
A-3 Ph.D. in political science from the University of Wisconsin-Madison. His research focuses on law and public policy and the various aspects of the American civil justice system, and he has written on trial courts, legal services, juries, plaintiffs' lawyers, and the politics of civil justice reform – including the areas of medical malpractice, products liability, and punitive damages. He is co-author (with Joanne Martin) of Civil Juries and the Politics of Reform, and author or co- author of numerous articles in law reviews (e.g., Texas Law Review, Minnesota Law Review, Vanderbilt Law Review) and social science journals (e.g., Law & Society Review, Law & Policy, International Journal of the Legal Profession) focusing on law and public policy. He reviews research proposals for the National Science Foundation and manuscripts for peer reviewed journals in the law and society field and in political science. He is a current member of the editorial board for Justice System Journal, a peer reviewed journal.
THOMAS A. EATON is the J. Alton Hosch Professor at the University of Georgia School of Law where he has taught for more than twenty-five years. He has conducted numerous empirical studies on tort litigation. These studies have been published in the Georgia Law Review, the Yale Law and Policy Review, the Yale Journal on Regulation, and the Journal of Legal Studies. Among the many articles he has written are: Of Frivolous Litigation And Runaway Juries: A View From The Bench, 34 GA. L. REV. 1049 (2007); Another Brick In The Wall: An Empirical Look At Georgia Tort Litigation In The 1990s, 41 GA. L. REV. 431 (2000); and A Profile Of Tort Litigation In Georgia And Reflections On Tort Reform, 30 GA. L. REV. 627 (1996). In 2005, Professor Eaton became the first law professor at the University of Georgia to be awarded a Creative Research Medal for his collaborative empirical studies of the civil justice system.
MARC GALANTER is John and Rylla Bosshard Professor Emeritus of Law and South Asian Studies at the University of Wisconsin-Madison and LSE Centennial Professor at the London School of Economics. He received degrees in philosophy and law from the University of Chicago. In addition to the University of Wisconsin and the London School of Economics, he has taught at Chicago, Buffalo, Columbia and Stanford. From 1990 to 1998, he was Director of Wisconsin’s Institute for Legal Studies, one of the leading centers for empirical study of the legal system. He is the author of five books and over one hundred articles on litigation, lawyers and legal culture,
A-4 including articles on jury trials and on punitive damages. He has been editor of the Law & Society Review, President of the Law and Society Association, Chair of the International Commission on Folk Law and Legal Pluralism, a member of the Council on the Role of Courts, a Guggenheim Fellow, and a Fellow of the Center for Advanced Study in the Behavioral Sciences. He is a member of the American Law Institute and a Fellow of the American Academy of Arts and Sciences. Among his most relevant articles are: Reading the Landscape of Disputes: What We Know and Don’t Know (and Think We Know) About Our Allegedly Contentious and Litigious Society, 31 UCLA L. REV. 4 (1983); The Day After The Litigation Explosion, 46 MD. L. REV. 3 (1986); News from Nowhere: The Debased Debate on Civil Justice, 71 DENVER U. L. REV. 77 (1993); Predators and Parasites: Lawyer-Bashing and Civil Justice, 28 GA. L REV. 633 (1994); Real World Torts: An Antidote to Anecdote, 55 MD. L. REV. 1093 (1996); An Oil Strike in Hell: Contemporary Legends about the Civil Justice System, 40 ARIZ. L. REV. 717 (1998); The Conniving Claimant: Changing Images of Misuse of Legal Remedies, 50 DEPAUL L. REV. 647 (2000); The Turn Against Law: the Recoil Against Expanding Accountability, 81 TEXAS L. REV. 285 (2002); The Three-Legged Pig: Risk Redistribution and Antinomianism in American Legal Culture, 22 MISSISSIPPI COLL. L. REV. 47(2002); The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts, 1 J. OF EMPIRICAL LEGAL STUDIES 459 (2004).
VALERIE P. HANS is Professor of Law at Cornell Law School. She holds a Ph.D. in Social Psychology from the University of Toronto. She conducts empirical studies of law. Professor Hans has carried out extensive research, lectured, and written widely about the American jury system and other social science and the law topics, including six books and one hundred research publications. Her books on the jury include BUSINESS ON TRIAL: THE CIVIL JURY AND CORPORATE RESPONSIBILITY (2000); THE JURY SYSTEM: CONTEMPORARY SCHOLARSHIP (2006); AMERICAN JURIES: THE VERDICT (2007, with Duke Law Professor and fellow amicus Neil Vidmar) and JUDGING THE JURY (1986, with Duke Law Professor and fellow amicus with Neil Vidmar). She has served on the National Science Foundation’s Law and Social Sciences Advisory Panel, and regularly functions as an external reviewer for National Science Foundation grant proposals. She has served on the editorial boards of Journal of Empirical Legal Studies, Journal of Psychology, Public Policy, and Law, Law and Human Behavior, Law and Policy, Law & Society
A-5 Review, and Psychology, Crime, and Law. Among her published articles are: Empirical Research And Civil Jury Reform, 78 NOTRE DAME L. REV. 1497 (2003); Whiplash: Who’s To Blame? (Symposium: Responsibility And Blame: Psychological And Legal Perspectives), 68 BROOK. L. REV. 1093 (2003); Avoid Bald Men And People With Green Socks? Other Ways To Improve The Voir Dire Process In Jury Selection (Symposium: The Jury at a Crossroad: The American Experience III—the Jury in Practice), 78 CHI.-KENT L. REV. 1179 (2003); Nullification At Work? A Glimpse From The National Center For State Courts Study Of Hung Juries (Symposium: The Jury at a Crossroad: The American Experience III—the Jury in Practice), 78 CHI.-KENT L. REV. 1249 (2003); U.S. Jury Reform: The Active Jury And The Adversarial Ideal—The Jury’s Role in Administering Justice in the United States, 21 ST. LOUIS U. PUB. L. REV. 85 (2002); The Illusions And Realities Of Jurors’ Treatment Of Corporate Defendants (Symposium: The American Civil Jury: Illusion and Reality), 48 DEPAUL L. REV. 327 (1998).
EDWARD J. KIONKA is Visiting Professor of Law at the University of Georgia School of Law where he leads courses in the areas of torts and federal courts. For 30 years, Kionka taught law at Southern Illinois University where he was a member of the founding faculty and served as associate dean during 1984-85. Kionka has been a visiting professor at law schools across the country including Washington University in St. Louis, Emory University, the University of San Diego and Saint Louis University. Before his tenure at Southern Illinois, he served as assistant dean and assistant professor at the University of Illinois College of Law and as executive director of the Illinois Institute for Continuing Legal Education. He was also an associate at Leibman, Williams, Bennett, Baird and Minow in Chicago. Professor Kionka is the co-author of EVIDENCE: TEACHING MATERIALS FOR AN AGE OF SCIENCE AND STATUTES and the author of TORTS IN A NUTSHELL and TORTS BLACK LETTER. He has also written numerous articles appearing in journals such as the Louisiana Law Review and the Illinois Bar Journal. Most pertinent among his published articles is: Things To Do (Or Not) To Address The Medical Malpractice Insurance Problem, 26 N. ILL. U. L. REV. 469 (2006).
HERBERT M. KRITZER, Ph.D. University of North Carolina at Chapel Hill, 1974; B.A. Haverford College 1969, is the Marvin J. Sonosky Chair of Law and Public Policy at the University
A-6 of Minnesota Law School, and is also an Affiliated Professor of Political Science. Prior to coming to the University of Minnesota he was Professor of Law at the William Mitchell College of Law (2007-09), and Professor of Political Science and Law at University of Wisconsin-Madison (1977- 2007). From 2003 to 2007 he served as editor of Law & Society Review. He has conducted extensive empirical research on a range of law related topics including the civil justice system, the legal profession, judicial selection, and judicial decision-making; his research includes work in the United States as well as other common law countries. He is the author or coauthor of five books and more than 100 articles or book chapter. His most recent book is Risks, Reputations, and Rewards: Contingency Fee Legal Practice in the United States (Stanford University Press, 2004). He is the coeditor of the Oxford Handbook of Empirical Legal Research (Oxford University Press 2010).
Joanne Martin is a Senior Research Fellow , Emerita, at the American Bar Foundation in Chicago, IL. She holds a J.D. for Loyola University of Chicago and an M.M. from Northwestern University’s Kellogg School of Management. Her research focuses on law and public policy and the various aspects of the American civil justice system. She has written on trial courts, juries, plaintiffs' lawyers, and the politics of civil justice reform – including the areas of medical malpractice, products liability, and punitive damages. She is co-author (with Stephen Daniels) of Civil Juries and the Politics of Reform (Northwestern University Press, 1995), and author or co- author of numerous articles in law reviews (e.g., Texas Law Review, Minnesota Law Review, Wisconsin Law Review) and social science journals (e.g., Law & Policy, Justice System Journal) focusing on law and public policy. She reviews research proposals for the National Science Foundation and is a current member of the editorial board for Law & Social Inquiry, a peer- reviewed journal.
FRANK M. MCCLELLAN is the I. Herman Stern Professor of Law at Temple University, Beasley School of Law, where he has taught since 1981 and where he teaches Torts, Bioethics, Medical Malpractice, and Drug Product Liability. He also lectures at Temple University School of Medicine on various topics related to law, medicine and ethics and at American Law Institute- American Bar Association (“ALI-ABA”) conferences, currently serving as the Co-Chair and
A-7 Planner of the ALI-ABA course medical malpractice course. In 1995, Temple University awarded him the Friel-Scanlon Prize for outstanding scholarship. Professor McClellan has written numerous law review articles on medical malpractice, bioethics and tort law. Professor McClellan earned his B.A. from Rutgers University (1967), his J.D. from Duquesne University (1970), and his LL.M. degree from Yale University (1974). At Duquesne, he was a member of the law review and received a merit award for academic excellence. At Yale, he was awarded the Felix S. Cohen Prize in Jurisprudence. From 1970-71 he served as a law clerk for the late Honorable William H. Hastie, Chief Judge of the U.S. Court of Appeals for the Third Circuit. He then practiced as an associate with the Washington, D.C. law firm of Wilmer, Cutler & Pickering before joining the law faculty of Duquesne University, where he taught from 1972 through 1981. Professor McClellan devotes much of his public service time to projects aimed toward eliminating racial and other group-based biases in higher education and in the justice system. In 2002-2003 he served a the Chair of a Workgroup that spent two years exploring perceptions of racial bias in the court system of attorneys, litigants and judges throughout the state of Pennsylvania, as a part of an overall study of bias in the justice system conducted by the Pennsylvania Supreme Court Committee on Racial and Gender Bias. He is the author of MEDICAL MALPRACTICE: LAW, TACTICS AND ETHICS (Temple Univ. Press 1994), co-author of TORTS: CASES, PROBLEMS AND MATERIALS (3rd ed. 2002), and author of 30 scholarly articles, including: The Nature and Impact of the “Tort Reform” Movement, 35 HOFSTRA L. REV. 437 (2007); Medical Malpractice Law, Morality and the Culture Wars: A Critical Assessment of the Tort Reform Movement, 27 J. LEGAL MED. 33 (2006); Litigating Medical Malpractice Claims: Developments in the Law, in LITIGATING MEDICAL MALPRACTICE CLAIMS (ALI-ABA 2001, updates 2002, 2004, 2005) (with E. Ihuekwumere); Tort Law and the Pharmacist, in LITIGATING MEDICAL MALPRACTICE CLAIMS (ALI-ABA 2001, update 2002, 2004, 2005) (with L. Fierro); Tort Liability of Physicians, Hospitals, and Other Health Care Providers, in LITIGATING MEDICAL MALPRACTICE CLAIMS (ALI-ABA 2001, updates 2002, 2004, 2005); Tort Reform for Medical Malpractice Cases: Stories v. Statistics, 3 L. & BIOETHICS REP. 7 (2003); Bendectin Revisited: Is There a Right to a Jury Trial in an Age of Judicial Gatekeeping?, 37 WASHBURN L.J. 261 (1998); Confronting Racial, Ethnic, or Gender Bias in Product Liability Cases, in LITIGATING MEDICAL
A-8 MALPRACTICE CLAIMS (ALI-ABA 1997); Recent Decisions on Institutional and Practitioner Liability, in LITIGATING MEDICAL MALPRACTICE CLAIMS (ALI-ABA 1997); Symposium, The Dark Side of Tort Reform: Searching for Racial Justice, 48 RUTGERS L. REV. 761 (1996).
DEBORAH JONES MERRITT is John Deaver Drinko-Baker & Hostetler Chair in Law; Courtesy Professor of Sociology; Courtesy Professor of Public Policy and Management; and Associate Faculty Member in Women’s Studies, all at the Ohio State University. Professor Merritt graduated from Harvard College summa cum laude in 1977 and from Columbia Law School in 1980. While at Columbia, she was Managing Editor of the Columbia Law Review and won the Robert Noxon Toppan Prize. After graduation, Professor Merritt clerked for Judge (now Justice) Ruth Bader Ginsburg on the U.S. Court of Appeals for the District of Columbia Circuit and for Justice Sandra Day O’Connor on the Supreme Court of the United States. Professor Merritt practiced law in Atlanta, Georgia, and joined the law faculty at the University of Illinois in 1985. She served there as Professor of Law, Professor of Women’s Studies, Advisor to the Joint JD/MD Program, and Associate Dean for Academic Affairs before moving to Ohio State, where she accepted the Drinko Chair in 1995. Professor Merritt has been honored as both an Ohio State University Distinguished Lecturer (1999) and as a University Distinguished Scholar (2002), awards conferred on the University’s most outstanding researchers. In 2004, the University recognized her work promoting diversity with one of its Distinguished Diversity Enhancement Awards. She also served as the University’s general commencement speaker for the Autumn 2004 commencement. From 2000-2005, Merritt directed the John Glenn Institute, a University-wide institute devoted to encouraging public service and informing public policy. Much of her work has focused on public policy issues, and she has made numerous presentations to judges, legislators, and other policymakers. She has also co-taught courses in Europe with both Justice Ginsburg and Justice O’Connor. Professor Merritt teaches Evidence, Law and Psychology, Law and Social Science, and Women and Law has published widely on issues of equality, affirmative action, federalism, health and technology, legal education, tort reform, and law and social science. She is the author of more than 100 scholarly articles, essays, papers, and presentations, including: Justice Sandra Day O’Connor: The Framers’ “First Woman,” 31 J. OF SUPREME COURT HISTORY 107 (2006) (invited contribution to tribute issue
A-9 honoring Justice O’Connor); Ruth Bader Ginsburg’s Jurisprudence of Opportunity and Equality, 104 COLUMBIA L. REV. 39 (2004) (invited contribution to Symposium Honoring Justice Ginsburg’s Tenth Anniversary on the Supreme Court) (with David Lieberman); Constructing Identity in Law and Social Science, 11 J. OF CONTEMP. LEGAL ISSUES 731 (2001); Constitutional Fact and Theory: A Reply to Chief Judge Posner, 97 MICH. L. REV. 1287 (1999); Affirmative Action: An International Human Rights Dialogue, 54 RECORD OF THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK 278 (May/June 1999) (with Ruth Bader Ginsburg; excerpted in BROOKINGS REVIEW (Winter 2000); Is the Tort System in Crisis? New Empirical Evidence, 60 OHIO STATE L. J. 315 (1999) (with Kathryn Barry).
Ralph Peeples is Professor of Law at Wake Forest University School of Law. He has taught Torts at Wake Forest for over ten years. Peeples received his A.B. degree cum laude in 1973 from Davidson College, and his J.D. degree from New York University School of Law in 1976, where he was a Root-Tilden Scholar. Peeples joined the Wake Forest Law School faculty in 1979. He has written extensively on the subject of medical malpractice litigation. His articles on the subject of medical malpractice have appeared in journals such as Law and Contemporary Problems, the Journal of Health and Social Behavior, Wake Forest Law Review, Catholic University Law Review, Southern Methodist University Law Review, the Journal of Dispute Resolution, the Journal of Empirical Legal Studies, and the Yale Journal of Health, Policy, Law and Ethics.
JAMES T. RICHARDSON is Foundation Professor of Sociology and Judicial Studies at the University of Nevada, Reno, where he directs the graduate Judicial Studies degree program for trial judges, offered in conjunction with the National Judicial College and the National Council of Juvenile and Family Court Judges. He teaches a seminar, “Social and Behavioral Sciences and the Law” in the program. He has a Ph.D. in Sociology from Washington State University, as well as a J.D. from Old College, Nevada School of Law. He has done research on the legal system, including research on jury behavior. He has published work in Law and Human Behavior, Behavioral Sciences and Law, Brigham Young University Law Review, University of Queensland Law review, University of New South Wales Law Journal, The Justice System Journal, Judicature,
A-10 and other books and journals in the social sciences. He reviews for a number of journals in the social sciences and in law related fields.
MICHAEL L. RUSTAD, Ph.D., J.D., LL.M. is the Thomas F. Lambert Jr. Professor of Law and Co-Director of the Intellectual Property (IP) Law Concentration at Suffolk University Law School. He was the founding director of the IP concentration and is currently co-director with Professor Andrew Beckerman-Rodau. He is the current chair of the Executive Committee of the American Association of Law Schools (AALS) Torts & Compensation Systems Section. He has been member of the American Law Institute Since 1994, where he is on the Members Consultative Group for the Restatement (Third) of Torts. He is the author of fifteen books and more than sixty law review articles. His most recent books are: Software Licensing: Principles and Practical Strategies (Oxford University Press, 2010) and Internet Law in a Nutshell (West/Thompson 2009). He was chosen as Hugh C. Culverhouse distinguished visiting chair at Stetson University College of Law for 2009-2010. In December 2010, he achieved the milestone of being cited more than 1,000 times in Westlaw’s law review database. He is a leading scholar in the field of tort damages.
Charles M. Silver holds the Roy W. and Eugenia C. McDonald Endowed Chair at the University of Texas School of Law, where he writes and teaches about civil procedure, professional responsibility and, increasingly, health care law and policy.Professor Silver has coauthored a series of studies of medical malpractice litigation in Texas, most of which have been published in peer-reviewed journals. These articles include:The Impact of the 2003 Texas Medical Malpractice Damages Cap on Physician Supply and Insurer Payouts: Separating Facts from Rhetoric, 44 The Advocate 25 (2008) (with David A. Hyman and Bernard Black); Estimating the Effect of Damage Caps in Medical Malpractice Cases: Evidence from Texas, J. Legal Analysis (2008) (with David A. Hyman, Bernard S. Black, and William M. Sage); Defense Costs and Insurer Reserves in Medical Malpractice and Other Personal Injury Cases: Evidence from Texas, 1988- 2004, 10 Amer. Law & Econ. Rev. 185 (2008) (with Bernard Black, David A. Hyman, and William M. Sage); and Malpractice Payouts and Malpractice Insurance: Evidence from Texas Closed
A-11 Claims, 1990-2003, 33 Geneva Papers on Risk and Insurance: Issues and Practice 177-192 (2008) (with David A. Hyman, Bernard S. Black, William M. Sage and Kathryn Zeiler)
Richard W. Wright is a Professor of Law at the Illinois Institute of Technology's Chicago- Kent College of Law. He is an elected member of the American Law Institute, past chair of the Torts and Compensation Systems Section of the Association of American Law Schools, and a member of the Advisory Boards of the Torts, Product Liability and Insurance Law Journal of the Social Science Research Network, the Journal of Tort Law, and the Center for Justice and Democracy. He has been a visiting professor or fellow at the University of Texas in Austin, the University of Canterbury in New Zealand, Brasenose College and the University of Oxford in England, the University of Melbourne in Australia, and the Universidad Torcuato di Tella in Buenos Aires, Argentina. His published work appears in several international collections of leading scholarship on tort law and jurisprudence.
A-12 APPENDIX B
Data Compiled from American Medical Association’s
Physician Characteristics and Distribution in the U.S.
Missouri :1970-2008
A-13 Figure 1: Per-capita Patient Treating Physicians in Missouri: 1971-2008
Patient Care Physicians Per Capita (1971-2008) 250 225 200 175 150 Missour 125 i 100 75 50 25 Physicians per 100,000 persons 0
Year
Year National Missouri Arkansas Illinois Indiana Iowa 2008 240 218 187 247 200 168 2007 239 218 187 246 199 167 2006 242 215 189 244 199 166 2005 239 215 189 244 199 166 2004 235 214 189 241 196 166 2003 235 213 186 239 197 166 2002 234 210 182 235 192 160 2001 235 212 181 237 189 161 2000 230 203 173 231 180 155 1999 224 203 175 229 177 154 1998 230 207 180 233 178 157 1996 217 202 169 226 171 153 1995 216 197 160 221 166 151 1994 207 194 155 213 159 145
A-14 1993 207 191 154 211 158 144 1992 204 188 153 208 154 141 1990 198 177 141 193 146 138 1989 195 175 138 192 143 135 1986 184 166 132 185 135 128 1985 180 163 128 182 132 124 1983 174 154 123 178 126 121 1982 169 150 120 174 122 120 1981 164 143 114 165 117 114 1979 155 132 107 155 112 108 1978 149 127 99 148 108 105 1977 146 127 97 144 106 101 1976 137 122 88 135 100 97 1975 135 117 85 132 96 95 1974 132 114 83 130 93 92 1973 130 115 81 125 92 89 1971 128 111 82 122 90 91
Patient Care Physicians Per Capita (1971- 2008)
275 National 250 225 Missouri 200 Arkansas 175 150 Illinois 125 Indiana 100 75 Iowa 50
Physicians per 100,000 persons 25 Kansas 0
Year A-15 Neurosurgeons and OB-GYNs per Capita (1970- 2008) 800
700
600 NS
500 OBG 400
300
200 Number of Physicians per Capita 100
0
Year
Year NS OBG
1970 42 335
1972 48 377
1973 45 376
A-16 1974 48 405
1975 51 412
1976 48 431
1978 55 434
1979 61 452
1980 61 470
1981 59 499
1982 66 524
1983 66 538
1985 67 585
1986 71 579
1989 85 623
1990 86 624
1992 88 651
1993 88 644
1994 91 655
1995 103 673
1996 102 688
1997 106 691
1998 101 697
1999 106 692
2000 104 701
2001 106 705
2002 101 696
2003 107 704
2004 119 700
2006 117 702
2008 108 697
A-17 Medical malpractice insurance in Missouri the current difficulties in perspective
an analysis by the Missouri Department of Insurance
Scott B Lakin, Director
February 2003
A-18 Table of Contents
Executive summary ...... p. 1 Summary of recommendations ...... p. 3 Missouri's market: an overview ...... P 5 Key facts ...... P. 5 Recent market changes ...... p. 6 The basics of medical malpractice ...... p. 7 Cyclical crises ...... P 9 The 1976 reforms ...... p. 10 The 1986 reforms ...... p. 10 Claims and awards ...... p. 12 Claims activity ...... p. 13 Malpractice awards and settlements ...... p. 15 Profitability in the Missouri market ...... p. 21 Loss ratios ...... p. 21 NAIC profitability figures ...... p. 23 Competition in the current market ...... p. 24 Underpricing and insolvencies ...... p. 24 The shrinking 2002 market for physicians ...... p. 26 Rate regulation in Missouri ...... p. 27 Premium costs drop from 1990 to 2001 ...... p. 28 Premium rate increases ...... p. 29 New entrants eye Missouri physicians market ...... p. 30
Potential solutions to Missouri's difficulties ...... p. 31 Caps on total damages ...... p. 31 Reduced cap on non-economic damages ...... p. 32 States with caps on medical malpractice damages (table) ...... p. 33 State provision of medical malpractice insurance ...... p. 35 Commission on patient safety ...... p. 38 Revisiting the Scott decision ...... p. 39 Affidavit of merit ...... p. 41 Further restrictions on punitive damages ...... p. 42
Other statutory, administrative changes ...... p. 43 Formal examination on medical malpractice ratemaking ...... P. 43 Elimination of mandatory insurance by law and contract ...... P. 44 Medicaid reimbursements ...... P. 45 Use of Missouri actuarial data ...... P. 45 Prohibition on surcharges for pending claims ...... P. 45 Adequate notice to policyholders ...... p. 46 Better monitoring of the market ...... p. 46 Staggered policy expirations ...... P. 46
Footnotes ...... p. 47
A-19 1 Medical malpractice in Missouri: the current difficulties in perspective Executive summary
Missouri is enduring its third underwriting cycle in medical malpractice insurance in the past three decades.
After a decade of declining premiums and aggressive competition for market share, several large carriers — which underpriced their products, but accustomed providers to less expensive coverage — have withdrawn from the market nationally or become insolvent. Medical providers, particularly physicians, have experienced severe "rate shock" as they seek coverage from the remaining higher- cost insurers, which in turn are raising rates further. The withdrawal of carriers also has produced a serious capacity problem in which remaining malpractice insurers sometimes lack both the capital and underwriting staff to handle the demand for new business.
Just as in the previous two underwriting cycles, medical groups joined by many insurers and members of the business community have called for limits on malpractice liability awards to patients who have suffered major injury from medical negligence. Unlike most states, Missouri in 1986 adopted limits on an injured patient's ability to recover damages. Those changes appear to have added much stability to the Missouri malpractice environment:
■ Claims closed and filed have trended downward for both physicians and other types of providers. ■ In the past decade, awards for malpractice damages actually lagged behind general inflation ■ All increases in award sizes are accounted for by medical inflation, wage inflation (for lost earnings) and the increase in severity of the injury to the patient. ■ Physicians pay less aggregate premium for malpractice coverage than in 1990, even though 40 percent more doctors are licensed. All medical providers also pay less overall for coverage than in 1990. ■ Economic awards for increased medical costs and lost earnings now account for a greater share of total damages than non-economic damages. ■ Missouri has few of the multimillion-dollar awards cited in the media and, when they do occur, most damages represent the medical costs to treat the injury and the income the victim cannot earn.
Insurers need time and capital to fill the void in the market left by the departed carriers. Physicians are hard-pressed to absorb increased malpractice insurance costs when they have limited ability to pass on those expenses to managed care companies and government programs. These difficulties, however, find their roots in the insurance underwriting cycle, not at the hands of the victims.
The experience of the past 15 years has provided valuable lessons on how to improve the administration of justice for medical negligence, which Missouri should adopt. But based on recent experience of other states — and previously in Missouri — further "tort reforms" will not provide relief to financially distressed physicians for several years, if at all.
A-20 2 Yet after creating a stable market that benefited providers over the past 15 years, Missouri should not allow that environment to deteriorate. The General Assembly should enact legislation to reverse and clarify a recent court decision that threatens to weaken non-economic damage caps, which would increase insurers' assessment of risk.
The Missouri Department of Insurance (MDI) also believes the state faces an imperative public safety need to assist the physician community during this transition until a "softer" market develops. MDI favors emergency legislation to allow a joint underwriting association to provide coverage at fair rates to physicians in critical specialties such as obstetrics, emergency and trauma medicine and surgery, who historically have faced the highest risks of malpractice litigation and the highest level of premiums. MDI anticipates that the JUA will only operate for a few years, but needs to begin offering coverage this year.
Considering the large increases for those who buy coverage in the private market, I have directed my staff to prepare for a formal examination of the state's major malpractice insurers. Missouri always has relied on the free market to police malpractice rates, and we need a better understanding of whether Missouri's medical malpractice market remains competitive, how the carriers set rates and whether they are excessive or, in the 1990s, were inadequate.
MDI also has been disappointed by the general absence of debate on the underlying cause for malpractice — preventable medical errors. During the 1990s, the insurance, business and labor communities worked with government to conquer a workers compensation price spiral by slashing workplace injury rates and unleashing market forces to reduce premiums by about 25 percent. Missouri should devote that same degree of intensity to improving patient safety.
The National Institute of Medicine's landmark report on medical errors in 1999 indicated that 44,000 to 98,000 Americans die in hospitals alone each year from preventable medical errors, translating into a prorated share of up to 2,000 Missourians. Many more suffer permanent injuries from errors in other medical settings. Cost pressures to reduce staffing while adopting expensive new technologies, increased reliance on medications, time pressures in a managed-care environment and other forces have fostered conditions that need to be addressed.
MDI urges Gov. Bob Holden to convene a broad-based commission to recommend legislative, administrative and clinical measures to improve medical outcomes and prevent errors. That sort of medicine will provide a long-term remedy for many of the ills that the malpractice market.
Scott B. Lakin, Director Missouri Department of Insurance February 6, 2003
A-21 3 Summary of MDI recommendations for medical malpractice improvements
1. Missouri should establish a limited-scope joint underwriting association to offer medical malpractice coverage for distressed specialties critical to the public safety. An alternative -- a patient compensation or excess liability fund -- would spread responsibility for more expensive awards and should reduce premiums, but it likely would require all Missouri physicians to carry such coverage and take longer to establish.
2. The governor should immediately establish a Missouri Commission on Patient Safety to explore ways to reduce medical errors that drive the cost of malpractice and permanently disable and/or kill our residents.
3. The General Assembly should reverse the effect of the Scott decision, an appellate court ruling that allows multiple caps for non-economic damages when only one injury has occurred.
4. The General Assembly should require judges to dismiss cases, without prejudice, in which plaintiff's attorneys have not produced affidavits attesting to malpractice from qualified professionals within 90 days after the lawsuits are filed.
5. MDI will conduct a formal multi-company examination to determine whether Missouri's medical malpractice market for physicians is competitive, how carriers calculate rates, the role Missouri loss experience plays in those calculations and whether Missouri rates now are excessive (or have been inadequate in the past).
6. A change in Missouri law should allow MDI to reject malpractice rate filings that do not meet acceptable standards on using Missouri-only data.
7. As soon as practical, Gov. Bob Holden should propose a Medicaid reimbursement increase for obstetricians, who deliver more than 40 percent of the state's newborns under this program. These high-risk physicians now have few ways of recouping increasing costs for medical malpractice.
8. Missouri should prohibit insurers from surcharging providers that have a pending medical malpractice claim.
9. The law should give physicians and other medical malpractice policyholders at least 60 days notice of nonrenewals and renewal rates.
A-22 4 10. MDI should begin collecting data by medical specialty to monitor whether rates charged to specialists are reasonable and whether coverage is available. MDI should also have the statutory authority to fine self-insured providers that do not file data as required by law.
11. MDI should work with insurers to develop a plan for staggering the expiration dates of medical malpractice policies, particularly for physicians, to avoid the logjam that has contributed to the failure of physicians to receive timely quotes on new policies.
A-235 Missouri's market: an overview
Key facts
■ Missouri – unlike half the states – already has a cap on non-economic damages, which compensate the victim for lost quality of life and incidental costs because of his/her injury. (pp. 33-35)
Enacted in 1986, Missouri's cap started at $350,000. Adjusted annually by law with a U.S. Department of Commerce factor, the cap became $557,000 for 2003. In last year of available data, only six of 439 paid claims reached the cap. (p. 20)
■ Missouri does not require physicians to carry medical malpractice insurance unless they are on staff at urban hospitals. In that case, they must have $500,000 in coverage. (p. 45)
■ For 15 years, claims filed and closed with payment – both key indicators — have trended downward for both physicians and other types of providers. (pp. 14-15)
In 2001 — the last year of available data the number of claims dosed with payment dropped to 439, or by 42 percent from the peak of 1988. Claims filed have shown a similar decline. Since 1987 — the apex for filings — such claims overall fell from 2,244 to 1,599, or by 29 percent. Physicians have been less successful than hospitals in reducing claims frequency. Hospitals reduced their claims by 72 percent while claims against doctors dropped 22 percent over these 15 years.
■ In the past decade, awards for malpractice damages actually lagged behind general inflation. (p. 16)
For all providers, the average payment on paid daims rose 15.5 percent between 1992 and 2001, compared to a general consumer price index (CPI) change of 26 percent. Average payments on claims dosed against physicians rose 23 percent. Adjusted for inflation, claims payouts against physicians declined by 20 percent over the decade.
■ All increases in award sizes are accounted for by medical inflation, wage inflation (for lost earnings) and the increase in severity of the injury to the patient. (p. 18)
Wages and health care — the main costs paid by medical malpractice damages — experienced inflation rates much greater than the CPI over the past decade. Severity of the injury sufferedalso increased dramatically, particularly after 1999. While the average injury had been graded permanent and minor in 1987 when the system began, the severity rating by insurers themselves jumped permanent and more than significant by early 2002. (p. 17) These factors have played an important role in increasing compensation to victims.
■ Physicians pay less aggregate premium for malpractice coverage than in 1990, even though 40 percent more doctors are licensed. All medical providers also pay less overall for insurers' coverage than in 1990. (p. 29)
All medical care providers paid $127 million for malpractice policies in 1990, compared to $97 million in 2001, a decline of 24 percent. Providers purchased another $22 2 million in the unregulated "surplus lines market" in 2001. Even without adjusting for inflation, premiums for all providers fell at least 5.5 percent For physicians only, the malpractice bill in the
A-24 6 admitted market dropped to $68 million in 2001 from $94 million in 1990, or a reduction of 28 percent. (Premium figures in the surplus lines market are not available for physicians and surgeons in either 1990 nor 2001; self-insured facilities or corportions do not report. "Self-insured" doctors are a misnomer — they are uninsured.)
■ Most damages awarded in Missouri cover lost earnings and extra medical costs for treating the injury suffered by the victim. (p. 18)
Since 1997, "pain and suffering' awards have been less than economic payments. In 2001, non-economic damages were 92 percent of the awards for health costs and lost wages after reaching a low of 80 percent in 1999. For the first six months of 2002, non-economic damages fell to 87.2 percent of the economic award.
■ Missouri has few of the multimillion-dollar awards cited in the media and, when they do occur, most damages represented the medical costs to treat the injury and the income the victim cannot earn. (p. 20)
Missouri recorded 11 awards for $1 million or more in 1996, of which five were for $2 million or more. Those numbers since have trended downward. Over the past five years, Missouri had 36 awards of more than $1 million, or 1.4 percent of all paid claims. Of those 36 awards, seven were for more than $2 million, or 0.2 percent of all paid claims. Recent market changes
■ Between August 2001 and May 2002, more than half the Missouri market – 57 percent — disappeared for doctors who were seeking new carriers. Only three carriers were taking new business, for all practical purposes. These remaining companies lacked the capacity – even simply the underwriting staff – to process applications and handle doctors' demand after the insolvencies and withdrawals. (pp. 25-26)
During those nine months, two carriers (PHICO and Legion) became insolvent, two very large insurers (St Paul and Chicago) withdrew from the national market and Missouri's largest company (Intermed) exhausted its financial capacity. Neither the insolvencies nor withdrawals were traced to problems in Missouri's market
■ During the past three years, Missouri's four largest remaining writers have raised rates from 28 to 97 percent. (p. 30)
■ Missouri's market for physicians remains attractive, although new entrants will need time to develop a distribution network. In the past few months, five companies have been licensed, decided to expand or applied for admission to Missouri. (p. 31)
Early signs point to increasing interest from insurers in the Missouri market for physicians, which would increase capacity and spur price competition. The large Missouri Hospital Plan (the state's sole provider-controlled insurer, operated by the Missouri Hospital Association) plans to expand its offerings for physicians; in March it will offer coverage for physicians who are on staff at the hospitals rather than just the doctors directly employed by hospitals. Particularly this entry into the physicians market could increase price competition in the immediate future, depending on the scope of its expansion.
A-25 7 The basics of medical malpractice insurance
Medical malpractice lawsuits were filed in London in the 1600s, and Blackstone's Commentaries addressed medical negligence in England by 1803. American litigation dates back to colonial times.
These lawsuits grew more commonplace by the mid-1800s — and were welcomed by skilled medical doctors as a means to curtail the practices of others who had neither medical education nor government licenses. Instead, the development boomeranged as the best-trained and -qualified doctors were held to higher standards. Of particular concern then were compound fractures, whose treatment often resulted in shortened limbs.
By the late 1800s, medical malpractice insurance became available as protection for qualified physicians, but may also have had an unintended effect: doctors became worth suing when poor outcomes resulted unexpectedly, at least in urban areas.
Nevertheless, medical malpractice litigation was considered rare — often a news curiosity — until at least the 1960s. By then, growing rates of health insurance in a more middle-class America increased access to medical care, and numerous sources — from physicians themselves to research breakthroughs to television — heightened consumer expectations about outcomes.'
Poor outcomes, however, do not necessarily constitute medical malpractice. Not all patients respond the same to all treatments, and treatments aren't foolproof. If a patient has been advised about the risks and provides informed consent to standard medical procedures, no malpractice likely occurs despite an injury.
Black's Law Dictionary cites four elements that the patient must prove to establish a claim of malpractice:2
1) The existence of the physician's (or other health-care provider's) duty to the plaintiff, usually based on the existence of the physician-patient relationship. 2) Negligence, or violation of an applicable standard of care. These standards reflect training: a physician may be held to a higher standard of care than a nurse, and a specialist to a higher level yet. Standards of care may vary among geographic areas. 3) Damages (a compensable injury). A patient may suffer from negligence, but if no permanent damage results, the likelihood of malpractice is negligible. 4) Causation, or connection between the violation of the standard of care and the harm.
A-26 8 Expert witness testimony is necessary to prove, in particular, negligence and causation.
Malpractice insurance provides significant protection — often $1 million per occurrence and $3 million maximum — for providers and their personal and business assets. But this coverage also protects patients, their families and ultimately the government from extra medical expenses, lost income and decreased quality of life.
In Missouri and most jurisdictions, a plaintiff may receive an award in three parts:
■ Economic damages, or the cost of medical treatment needed for the negligent injury and the loss of earnings that resulted. These damages account for the majority of awards in Missouri. ■ Non-economic damages, which compensate the victim or family for loss in the quality of life from the injury. These damages may cover a patient's pain and suffering, loss of enjoyment of life, inability to engage in usual activities, emotional distress, disfigurement and mental anguish of survivors or disruption of family in wrongful death cases. Missouri is among half the states that limit the amount of such damages or total awards. ■ Punitive damages against providers for willful misconduct. Such damages are strictly limited by Missouri law and rarely awarded; malpractice insurance does not cover these damages.
To protect personal assets against such awards and the cost of defending claims, physicians and other health-care providers typically buy one of two kinds of medical malpractice insurance:
■ An occurrence policy, which typically has higher premiums, but longer coverage. Health-care providers are covered indefinitely for all incidents that occur between the first day and expiration date of the policy. These types of policies are no longer typical in Missouri. ■ A claims-made policy, which only covers claims made while the policy is in effect for incidents during that period. These policies are initially less expensive than occurrence coverage, but increase over time When a claims-made policy expires, the company may offer "tail" coverage to provide extended coverage for incidents that occurred while the policy was in effect, but for which claims have not been filed. "Tail" coverage can cost double or triple the original policy. If the provider does not purchase "tail" coverage, no insurance exists for any claim that is made after the expiration date, even though the injury occurred during the policy period. A provider may purchase "nose" coverage from a new insurer to provide protection for these past incidents, but such policies may be quite expensive.
Missouri doctors — unlike those in Kansas and many other states — are not required to carry medical malpractice insurance unless they have staff privileges at an urban hospital (located in a county with more than 75,000 residents).
In the spring of 2002, MDI Director Scott B. Lakin became aware of growing physician complaints about unexpectedly large premium increases, and he began meeting with groups of doctors around the state. Gov. Bob Holden asked him to hold a public hearing Oct. 30 and report on the growth of medical malpractice difficulties for physicians and other providers and the contrast with market conditions shown in MDI's annual malpractice report. This study responds to Gov. Holden's request.
A-279 Cyclical crises in medical malpractice insurance
Missouri's current medical malpractice difficulties are the third such development in the past 30 years. Each has been associated with insurance underwriting cycles and general economic downturns. Economists cannot explain the causes of these cycles of economic expansion and contraction. In essence, profitability creates competition, which leads to underpricing that breeds unprofitability and the flight of competitors from the market; then "hard" markets produce higher premiums and profitability that attracts new companies or encourages expansion, starting the cycle again.
In retrospect, the difficulties of the 1970s have been described as a "crisis of availability" — some providers, particularly doctors, could not find coverage at any price. The national literature indicates an increase in medical malpractice claims dating roughly from the late 1960s that resulted in withdrawal of the large, multi-line insurers that dominated the line. States like Massachusetts emerged with no such insurers still operating.
In the mid-1980s, the difficulties were more often considered a "crisis of affordability," in which rates for doctors and other providers were considered onerous.
The current medical malpractice market in Missouri bears the signs of the classic insurance underwriting cycle. A review of national analyses and a fall 2002 MDI survey of Missouri's medical malpractice carriers indicates that events dating as far back as the mid-1980s — during the last crisis — led to a hotly competitive market in the late 1990s in which several large carriers substantially underpriced their product. Even more conservatively priced carriers held rates low to maintain market share. This hyper-competition depressed pricing while wage increases and health care inflation naturally were forcing awards upward.
When several carriers withdrew from the market or became insolvent as true costs mounted, Missouri's physicians suffered from "rate shock" as they were forced to buy coverage from higher- priced insurers. Those carriers also were re-evaluating risks in a "hard" market, which led to further price increases. Physicians with adverse claims histories have severe difficulties finding coverage because the remaining carriers are more selective in their underwriting; these doctors may face significant new surcharges if their previous carriers did not take into account claims histories.
The question then becomes whether the remaining insurers in the market will raise rates to generate attractive profit levels. If so, eventually insurers offering coverage at significant savings likely will enter and expand in the market — beginning the cycle again.
A-2810 The 1976 reforms
The crisis of the early and mid-1970s has not been well documented because the Missouri Department of Insurance did not collect detailed data during the era.
The Missouri General Assembly in 1976 responded to availability difficulties by enacting Senate Bill 471 (Sections 538.010 to 538.080, RSMo). A key feature established a pre-trial screening mechanism for medical malpractice lawsuits before a "professional liability review board," which was designed to encourage early settlements of malpractice cases, but not prohibit court action. The six-member boards were composed of a circuit judge who presided, two attorneys, two medical professionals (one of whom practiced the specialty of the defendant) and a lay member; the members changed from case to case.
With 90 days notice, the board convened to hear evidence on the case and could subpoena witnesses. Although hearings were informal, the testimony was sworn, and a formal record was kept. Within a month after the hearing, the board was to make its recommendations on liability and damages. A plaintiff who did not accept the recommendations still could proceed to trial, at which no mention of the board's action was permissible. Insurers paid a tax to fund the board's operation.
In February 1979, the Missouri Supreme Court struck down this procedure as an unconstitutional barrier for individuals to the courts. A state constitutional provision states that "the courts of justice shall be open to every person, and certain remedy afforded for every injury to person, property or character, and that right and justice shall be administered without sale, denial or delay." The legislature later repealed all the 1976 tort reforms in 1984.
Although the members of the court have changed, the constitutional provision and this legal precedent should give pause to advocates of another screening mechanism that is designed to prohibit the filing of frivolous lawsuits. MDI is aware of no screening mechanism that strictly prohibits access to the courts, and states like Nevada recently have abandoned their screening panels after insurers indicated they only increased legal costs.
In a more significant change, the medical malpractice troubles of the 1970s gave impetus to creation of medical malpractice insurers owned by their provider policyholders. While this development was expected to have a short lifespan, such mutuals and their descendants control a majority — almost three-fourths — of the national medical malpractice market today. Although many did become insolvent because laws on capitalization were relaxed to encourage their establishment, others prospered and eventually grew into publicly owned corporations.
The 1986 reforms
Another sharp rise in medical malpractice claims and pricing problems prompted the General Assembly to pass SB 663 in 1986 (Chapter 538, RSMo).
A-2911 Overall claims peaked in 1986 with almost 2,100 filed against hospitals, doctors and other health- care providers, tripling from 695 in 1979.
Loss-ratios for the medical malpractice line reached 136 percent earlier, in 1984, largely on the strength of a 188.1 percent figure for hospitals. Physicians actually posted an all-time high of 131 percent in 1981. (These figures compare to 81 percent for the entire line and 61 percent for physicians in 2001.) In each instance, losses were more costly than combined premiums and investment income for insurers.
The 1986 legislation:
■ Capped awards for non-economic damages at $350,000 per occurrence, adjusted annually by MDI to reflect inflation. In 1975, California had enacted its "MICRA" limit on medical malpractice non- economic damages at $250,000 without any increases for inflation, prompting Missouri and more than a dozen other states to eventually adopt similar limits. (Half the states still have no limits on damages.) In Missouri, the indexed limits were $547,000 in 2002; they rise to $557,000 in 2003. ■ Limited punitive damage awards to cases involving "willful, wanton or malicious" misconduct. Punitive damages, however, are not covered by medical malpractice insurance and have no effect on rates. In Missouri, punitive damages are seldom awarded. ■ Required itemization of awards for past economic and non-economic damages and future damages, such as continuing medical care. Any party could request payment of future damages of more than $100,000 in a structured settlement that would limit such costs. For example, the death of a plaintiff after 10 years could end payment of both medical and wage indemnity. ■ Required that the plaintiff file an affidavit for each defendant from a health-care provider stating the case possessed merit. The court could — but was not required to — dismiss the lawsuit without prejudice if no such affidavit was filed. (This provision replaced the screening mechanism of 1976 to discourage the filing of frivolous cases.) ■ Modified liability rules to make a defendant jointly liable only with other defendants whose fault was equal to or less than his or her own, based on the judge's or jury's award. Previously, courts could force defendants who had any level of liability to pay the entire award if the other defendant(s) could not. ■ Allowed the Administrative Hearing Commission, which hears licensing actions against professionals, to impose immediate, temporary license restrictions against a potentially dangerous provider, subject to appeal. ■ Required physicians on staff at a hospital in a county more than 75,000 residents to maintain at least $500,000 in medical malpractice insurance or lose staff privileges. ■ Required hospitals and outpatient surgical centers to report disciplinary actions against practitioners to their state licensing boards within 15 days. ■ Required insurers and self-insured health-care providers to report claims information at least quarterly to MDI, which forwards the information to licensing boards.
Since 1986, the legislature has adopted few changes in medical malpractice law. In 1997, Missouri's landmark HMO reform law removed the malpractice liability exemption for health maintenance organizations, which generally led them to require physicians in their networks to carry coverage $1 million per occurrence with a $3 million maximum.
A-3012 Aftermath of the 1986 revisions Claims and awards
The passage of the 1986 law coincided with the almost immediate brightening of the Missouri medical malpractice market. Key indicators on claims and payment activity peaked in 1987-88 or before and fell sharply before rebounding and stabilizing by 1992. In the past 15 years, the cost drivers associated with the 1986 crisis have not been surpassed.
In retrospect, however, loss ratios had peaked and headed downward before the General Assembly acted. This phenomenon was noted in states across the country, whether or not they limited damage awards, and has sparked debate on whether market improvements stemmed from the dynamics of the insurance cycle or tort changes.
Profitability in Missouri became well established by 1988 when the line's loss ratio dropped to 45.6 percent — i.e., only 45.6 cents in benefits were paid or reserved of each $1 in premiums earned by insurers. Medical malpractice loss ratios in the lower to mid-50 percent range were the rule until 1999 when declining premiums helped raise the ratios. Physicians' coverage experienced much the same result: loss ratios dropped to 33 percent by 1990 before rebounding and remaining in the mid-60s through 2001, except for two anomalous years.
The 1986 changes, however, did not have an effect on premium costs for Missouri physicians for several years. MDI does not regulate rates, so its database contains little information on average premiums during the period. But from 1986 to 1989, total premiums continued climbing from $52 million to $94 million for physicians and from $94 million to $132 million for all medical providers. MDI released a report in September 1990 referring to companies that had begun reducing rates — a trend that continued for much of the following decade.
Missouri collects more detailed information on medical malpractice insurance than virtually any other state. Following is an analysis of the information submitted by insurance companies and self- insured health-care providers, as required by the 1986 statutes.
A-3113 Claims activity ■ The number of medical malpractice claims closed with and without payment have declined markedly since the last reforms - by 37 and 42 percent, respectively, since the peak year of 1988, when pre-reform claims were still pending.
Closed Claim Count --.-- Closed Claims -All Medical Care Providers -*-- Closed Without Payment
2,300 -A--- Closed w Payment 2,100 1,900 2,037 1,956 1,700 1 855 1,888 1,892 1,930 1,901 1,813 1,815 , 1,500 1,754 1,625 1,624 1,622 1 1,300 .....----4-4 ,534 1,100 1,303 1,284 1,330 1,313 1,290 1,24‘9 . -4 - 11---- 4N 1,288 1,195 1,171 1,209 1,202 900 1,095 1,128 1,u// 1,100 '...
700 849 753 500 653 618 644 646 64 558 559 557 . ° 604 . 530 , ,,,, US 300 4) , 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Year
These indicators reflect the recent past, combining claims filing activity in preceding years - medical malpractice claims take almost four years to settle on average - with the insurers' assessment of the prevailing legal climate, the facts of individual cases, their willingness to settle and any judicial result.
In the post-reform peak year of 1988, insurers closed 2,037 claims against all medical providers with payments on 753. By 2001, the number of claims closed had fallen to 1,288, or by 37 percent? The number of claims closed with payment dropped to 439, or by 42 percent. Most of this decrease occurred during the six years since a secondary peak in 1995.
For physicians and surgeons, claims closed declined to 630 in 2001, or 41 percent from their peak year of 1990, when 1,061 claims were closed. Almost all the decline occurred since a secondary peak of 1,045 in 1995. Insurers and self-insureds paid out awards on 190 claims in both 2000 and 2001 for physicians.
As the first chart indicates, two-thirds - 66 percent - of claims closed in Missouri resulted in no payment in 2001; this ratio has remained steady for many years. The percentage rises among claims against physicians, in which the plaintiff prevailed in 20 to 30 percent of the claims from 1998 to 2001. This low percentage may be expected when torts are used to resolve medical negligence'
A-3214 ■ Claims filed' - a key indicator of future system costs - have shown a similar decline. Since 1987 - the top year for filings - such claims overall fell from 2,244 to 1,599, or by 29 percent. Physicians have been less successful than hospitals in reducing claims frequency.
Hospitals reduced their claims by 72 percent while claims against doctors dropped 22 percent over these 15 years.
Claims Repotted to Insurer
All Medical Care providers 2,700 Physicians and Surgeons 2,244 Hospitals 2,143 2,037 2,200 1,967 1,966 1,996 2P10 1,852 1,828 1,783 1,763 1,679 n. 1,627 1,625 1,599 1,700 ■
1 ,041 1,098 1,083 1,069 ":1- 1,200 982 1,007 1,021 1,023 999 883 878 780 736 782 815 739 8 i sit 541 504 Z 700 472 473 424 451 417 356 374 275 260 • 200 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Year
Claims against doctors remained relatively stable from 1987 to 1996, when more than 1,000 still were filed against physicians. All of the doctors' declines have occurred since that secondary peak in 1996; the rate of filings has trended slightly upward over the past two years, growing from 736 in 1999 to 782 in 2000 to 815 in 2001, but remain 25 percent below the earlier peaks.
A-3315 Malpractice awards and settlements
■ Since 1992, when medical malpractice insurance stabilized from the sharp peaks and troughs of the 1980s, the increase in payments to victims has lagged behind general price inflation in Missouri.
For the entire line, the average payment on closed claims with awards or settlements rose 15.5 percent between 1992 and 2001, compared to a consumer price index (CPI) change of 26 percent.'
The average payment reached $165,859 in 2001 for claims closed (generally those filed about 1997), with $87,793 for economic losses and $81,066 for non-economic losses. Those figures compare to total average settlements of $146,148 in 1992, with economic damages of $64,276 and non-economic losses of $79,321.
Average payments on claims closed against physicians rose 23 percent, compared to the 26 percent CPI rise, posting an average of $202,358 for paid claims in 2001 with $118,441 for economic losses and $83,917 for non-economic losses. Those figures compared to $164,517 in 1992 when economic damages totaled $77,779 and non-economic awards were $86,737.
Total losses for physicians dropped considerably below 1992 when adjusted for inflation. When using the standard inflation calculators (based on 1982-4 prices in St. Louis), losses for physicians dropped from $31 million in 1992 to $24.8 million in 2001, or by 20 percent over the decade.
Physician and Surgeons Medical Malpractice: Direct Losses Incurred Nominal and Inflation Adjusted
$100 94.2 I Nominal I $80 60.7 51.2 15 7 15 5 $60 41.8 . 43.0 9.2 ' 40.4 41.1 63.0 $40
$20 33 2 31.0 . 30.4 ' 293 25.7 1 Adjusted 24.8 $0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Year
Standard inflation aajustrrent iecluces the lasses to 1984 dollars in St Louis.
A-3416 That malpractice payments have declined from 1992 levels, after considering general inflation, becomes even more surprising when considering that health-care inflation and wage increases, the drivers for economic damages, increased at even higher levels than the consumer price index (CPI). The change in malpractice payments compares, for example, to the effect of health-care inflation on 1-1M0 premiums, which rose 47.9 percent between 1998 and 2001.
■ The inflation-adjusted decline of these payments since 1992 also occurred even though the severity of injuries to the patient has risen substantially.
When claims are filed, insurers assign a rating to describe the severity of the injury. According to the standard table used by insurers in their MDI reports:
• 1 = Temporary Emotional • 2 = Temporary Insignificant: Lacerations, contusions, minor scars, rash. • 3 = Temporary Minor: Infections, mis- set fracture, fall in hospital. • 4 = Temporary Major: Burns, surgical material left, drug side-effect, brain damage. • 5 — Permanent, Minor: Loss of fingers, loss or damage to organs, other non-disabling injuries • 6 = Permanent, Significant: Deafness, loss of limb, loss of eye, loss of one kidney or lung • 7 — Permanent, Major. Paraplegia, blindness, loss of two limbs, brain damage • 8 = Permanent, Grave: Quadriplegia, severe brain damage, lifelong care or fatal diagnosis m • 9 Death
Average Injury Severity
6.20
5.81 6.00 5 5.45 —MI— Closed With 531 531 5.50 524 520 521 Payment 4.9 9 5.07 5.05 5.02 .55 AINVECil Closed 5.00 5.19 521 Without 0 11 5.09 5.08 5.08 ■11 4111 4.99 4.96 Payment 450 ( 447,2 468' 4.44' .0. , gy as CO Cr a , p N, , c s as &°, O Er ci■ rn 1-1 /-1 Year
Particularly since 1999, the severity has spiked, based on the assessment by insurers.
In 1988, the average injury suffered in closed claims with payment was rated about 5, or nintr and permanent. However, by the first half of 2002, the average reached 6.2, or permanent and nvre than significant by the account of the insurers themselves. Most of this increase occurred after 1999, when the severity rating was 5.3.
A-3517 The claims closed without payment had climbed to 5.5 by the first half of 2002, or more severe that the average paid claim in 1999 or 2000.
Average Claims Payment by Injury Severity
Injury Severity 1997 1998 1999 2000 2001 1 $37,061 $71,259 $43,155 $47,970 $49,903 2 $24,624 $16,654 $20,467 $20,539 $15,837 3 $40,153 $42,177 $52,836 $71,545 $45,439 4 $71,816 $95,416 $69,153 $125,179 $124,399 5 $149,759 $119,488 $92,693 $142,521 $90,250 6 $197,874 $185,503 $193,894 $299,576 $261,062 7 $380,485 $607,444 $430,899 $480,383 $530,262 8 $705,577 $369,414 $401,038 $576,477 $228,524 9 $199,594 $210,623 $152,697 $210,311 $198,651 Source: Missouri Department of Insurance medical malpractice claims data
The upsurge in severity may explain the signs of more expensive settlements and awards that then appeared in early 2002. During the first six months, average total awards jumped 28 percent, led by a 31 percent increase in economic damages for health costs and lost wages. These six months may represent another anomaly, but the development bears close monitoring.
■ All of the increases in average medical malpractice payouts since 1990 are accounted for by increases in the medical cost of treating injury, the earnings lost by the victim and the severity of the injury suffered.
Through the 1990s, both average wages and medical costs - the primary elements of economic damages - tended to rise more rapidly than the CPI and act as the principal drivers of total indemnity. Furthermore, awards and settlements for lost earnings and treatment costs in malpractice cases increased faster than general wage and health care inflation. From 1992 to 2001, wage inflation in malpractice settlements grew 316 percent, and those earning losses were 202 percent more than general wage inflation.
The remainder of increases in awards is primarily attributable to a steady rise in the severity of injuries from 4.99 to 5.73 between 1988 and 2001. Preliminary data for 2002 indicates a further increase to 6.2.
Statistical methods can remove or "control" for the effects of rising wages, medical inflation, and injury severity on claim costs.
Without increases in health care costs and average wages, and if injury severities remained constant, average payments would have decreased fairly significantly during the 1990s. See the statistical model.'
A-3618 ■ Economic awards -- for lost income and extra medical costs -- have grown to outweigh non-economic damages since Missouri adopted its reforms in 1986, although the two remain closely linked.
In 1987, non-economic awards/settlements were 104 percent of the economic damages, but that ratio has declined, particularly since peaks in 1992 and 1996 when it reached 125 percent, based on claims reported closed to MDI.
Non-economic awards as % of economic awards
130% 125% 123%
120% 117°
104% , . o 102%
• V.16711 . 92%
90% lif lif : 0% 80% 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Since 1997, "pain and suffering" awards have been less than economic payments. In 2001, non- economic damages were 92 percent of the awards for health costs and lost wages after reaching a low of 80 percent in 1999. For the first six months of 2002, non-economic damages fell to 87.2 percent of the economic award.
A-3719 ■ Few - in fact, a declining number of - medical malpractice awards equal Missouri's indexed cap on non-economic damages.
Medical Malpractice Closed Claims, 1986-2001
Claim Total Number Number Missouri's closed closed above reaching non-economic year claims $250,000 Missouri's cap (indexed) non-economic non-economic damages cap
1986 2,067 5 5 $350,000 1987 1,956 13 9 356,000 1988 2,037 13 5 373,000 1989 1,813 17 7 391,000 1990 1,815 28 12 401,000 1991 1,855 40 16 430,000 1992 1,888 42 23 446,000 1993 1,882 35 16 462,000 1994 1,754 36 9 474,000 1995 1,930 48 13 482,000 1996 1,901 54 18 492,000 1997 1,625 50 10 502,000 1998 1,624 38 11 513,000 1999 1,622 34 6 517,000 2000 1,534 50 9 528,000 2001 1,288 37 6 540,000
The number of claims reaching Missouri's cap peaked in 1992 and generally has dropped since to only a handful of cases each year. In virtually every year, the severity of the claims receiving judgments equal to the Missouri caps averages a 7 or 8 - permanent injury like quadriplegia, blindness, severe brain damage requiring lifetime care or a terminal diagnosis.
In 2001, only 1.4 percent of the total 439 Missouri claims closed with payment reached the cap, which was indexed to $540,000 at that time.
The $250,000 figure on non-economic damages represents the California MICRA limits, which proponents of tort changes have advocated in Missouri and nationwide. HR 4600, which passed the U.S. House in September 2002 but died in the Senate, would have set a national cap on non- economic damages of $250,000 as well - but would have left Missouri's indexed limits in place; the federal legislation would have imposed caps only on the majority of states that do not have any now Only 37 Missouri settlements/awards, or 8.4 percent of closed claims with payment, exceeded the MICRA caps in Missouri in 2001.
As the table below indicates, capping Missouri settlements and awards for non-economic damages at $250,000 would reduce total payments (not premiums) by about 10 to 12 percent, perhaps less.
A-3820 Damages by category paid and non-economic damages exceeding California's $250,000 cap Missouri, 1987-2002
Year Total Economic Non-economic Non-economic % of total % of non- indemnity damages damages damages damages economic exceeding damages $250,000
1987 $41,003,366 $20,091,034 $20,910,332 $1,948,250 4.8% 9.3% 1988 $52,721,590 $28,506,973 $24,139,617 $1,535,604 2.9% 6.4% 1989 $43,916,237 $21,882,070 $22,034,167 $2,830,955 6.4% 12.8% 1990 $64,952,967 $35,459,578 $29,493,389 $5,734,258 8.8% 19.4% 1991 $81,124,089 $43,622,123 $37,501,966 $8,189,215 10.1% 21.8% 1992 $81,871,513 $36,438,356 $45,433,157 $16,081,915 19.6% 35.4% 1993 $81,828,491 $42,138,210 $39,690,281 $10,277,275 12.6% 25.9% 1994 $74,595,146 $35,011,950 $39,583,196 $8,993,080 12.1% 22.7% 1995 $83,436,964 $37,349,665 $46,087,299 $8,258,718 9.9% 17.9% 1996 $104,184,324 $51,083,198 $53,101,126 $16,995,293 16.3% 32.0% 1997 $87,582,188 $44,876,651 $42,705,537 $10,187,393 11.6% 23.9% 1998 $81,417,382 $41,930,389 $39,486,993 $12,028,266 14.8% 30.5% 1999 $72,383,291 $39,680,388 $32,702,903 $5,320,132 7.3% 16.3% 2000 $90,482,814 $48,405,403 $42,077,411 $9,833,787 10.9% 23.4% 2001 $82,227,206 $42,735,152 $39,492,054 $8,143,102 9.9% 20.6% 2002 (9 months) $72,488,001 $38,723,764 $33,764,237 $8,611,140 11.9% 25.5%
■ Missourians received few multi-million dollar awards that have surfaced in other states and, when such awards are made, they largely cover economic damages - i.e., medical costs and lost earnings. Such awards peaked in 1996.
Multimillion-dollar awards in Missouri
Year Claims Closed $1 million-plus $2 million-plus closed with awards awards payment
1988 2,037 753 1 0 1989 1,813 618 2 0 1990 1,815 644 3 1 1991 1,855 646 7 0 1992 1,888 558 8 3 1993 1,892 559 8 2 1994 1,754 552 4 2 1995 1,930 640 4 0 1996 1,901 604 11 5 1997 1,625 530 8 2 1998 1,624 496 8 3 1999 1,622 545 3 1 2000 1,534 434 8 0 2001 1,288 439 9 1 2002 (9 months) 875 317 4 1
A-3921 Profitability in the Missouri market Loss ratios
Premium and loss data for Missouri indicate two unambiguous trends, both of which have created profitability strains on malpractice providers in the admitted market.
■ Between 1990 and 2001, (1) total earned premiums tended to decline while (2) claims costs have increased incrementally.
Medical Malpractice Premium and Losses Missouri, 1990-2001
Premium Earne $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 Er"---41)---116-- Incurred $40,000,000 $20,000,000 $0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Since 1999, the result has been higher loss ratios -- the percentage of premium earned that is paid out or reserved for future payments -- than had been experienced earlier in the decade. Between 1990 and 2001, earned premium declined by 24 percent' while claims payments increased by 36 percent, resulting in elevated loss ratios beginning in 1999. (The year 1996 was an anomaly created when five carriers dramatically increased their reserves)
A-4022 Medical Malpractice Insurance, Premium and Losses (Admitted Market Only) Missouri, 1990-2001
Year Premium Earned Losses Incurred Loss Ratio
1990 $127,371,871 $58,030,387 45.6% 1991 $108,788,193 $57,589,693 52.9% 1992 $96,442,625 $50,971,777 52.9% 1993 $101,049,704 $57,543,001 56.9% 1994 $117,860,545 $65,449,209 55.5% 1995 $122,240,889 $61,756,820 50.5% 1996 $123,401,931 $117,608,550 95.3% 1997 $101,923,637 $54,273,811 53.2% 1998 $88,559,722 $48,185,927 54.4% 1999 $93,676,069 $68,353,073 73.0% 2000 $91,969,348 $65,056,683 70.7% 2001 $97,027,590 $79,027,069 81.4%
Loss Ratio by Malpractice Specialty
Line 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Physicians 67.5% 65.6% 66.2% 51.7% 58.1% 113.3% 61.4% 79.5% 63.1% 96.7% 60.9% Dentists 28.4% 18.6% 83.9% 21.0% -10.4% 32.6% 45.1% 17.1% -20.2% 11.5% 34.8% Nurses -92.6% 52.1% -22.1% 98.1% 28.9% -92.5% -54.1% 21.2% 34.6% 222.6% 31.0% Hospitals 29.1% 8.5% 23.3% 85.1% 30.7% 91.5% 15.0% 19.7% 72.6% 8.7% 160.4% Other 11.3% 82.9% 63.2% 33.8% 44.5% 38.4% 59.7% -7.1% 191.5% -28.8% 111.9% Total 52.9% 52.9% 56.9% 55.5% 50.5% 95.3% 53.2% 54.4% 73.0% 70.7% 81.4% Source: Missouri Supplement Data
Loss ratios for these specialties fluctuate, sometimes dramatically, from year to year because a relatively small number of claims are closed. A more accurate picture may emerge if a moving average over five years is used. The unusual spike for physicians in 1996 skews this picture, so the loss ratio for 1997 to 2001 appears to decline.
Missouri Loss Ratio Five-Year Averages
Line 1991-1995 1992-1996 1993-1997 1994-1998 1995-1999 1996-2000 1997-2001 Physicians 61.3% 71.2% 70.5% 72.7% 75.9% 84.6% 71.9% Dentists 27.7% 28.5% 33.7% 21.1% 13.7% 18.8% 18.9% Nurses 9.9% 10.2% -15.5% -8.4% -29.5% -11.0% 26.8% Hospitals 35.4% 47.5% 51.6% 52.8% 49.0% 40.3% 51.4% Other 46.6% 48.5% 48.2% 36.7% 55.2% 60.7% 78.3% Total 53.7% 63.0% 93.0% 62.7% 66.1% 70.8% 66.6% Source: Missouri Supplement Data
Losses in these ratios consist of three parts: actual payments on incidents that occurred during the year; actuarial projections of future payments for those losses, which are known as reserves; and corrections for reserve errors in previous years. When those reserves are overestimated (or underestimated), this practice can lead to misleading impressions of the profitability of the line.
A-4123 NAIC profitability figures
The National Association of Insurance Commissioners' (NAIC) publishes data on fixed expenses, underwriting profit, taxes and investment income by state that allow calculation of profitability for Missouri only.
■ Based on NAIC data, the medical malpractice sector's bottom-line difficulties date at least from 1997, although it did not become apparent in market behavior until the current economic downturn. Medical malpractice insurance in Missouri was still slightly profitable in 2000, the last year of available data, when MDI began seeing the first substantial rate hikes by carriers.
Other than the anomalous year of 1996, the medical malpractice line had posted among the most robust profits of any insurance sector from the late 1980s through 1997. The year 1997 produced the last year of underwriting profits (profitability without investment income or tax offsets). Investments protected the bottom line in 1998. After-tax profitability plummeted from 17.5 percent of premium earned in 1998 to a 7 percent loss in 1999. The line rebounded in 2000, thanks to an upturn in investment income and tax treatment, again posting a slim profit. Figures for 2001 are not yet available, but gross losses were 16.7 percent for the entire market including surplus lines companies and 14.5 for regulated malpractice insurers in Missouri. Those figures will decline, possibly significantly, after federal taxes are computed. In 1997, for example, a 14 percent gross loss was reduced by half through tax offsets.
As expected, investment income turned downward in 2001 as the stock market and interest rates slipped sharply. Missouri malpractice insurers invest slightly more than half of their portfolio in bonds, and that figure rises substantially for insurers that specialize in medical malpractice coverage; common stock holdings total about 30 percent overall. This conservative approach to investment protects insurers from much of the stock market's erratic behavior, but they have suffered financially from the Federal Reserve Board's steady cutting of interest rates that influence bond performance. This downward trend in investment income certainly continued in 2002 for interest and stock market income and further removed the cushion that insurers use to offset underwriting losses.
Missouri Medical Malpractice Profitability Results 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Underwriting Profit Admitted Market 11.5% -3.1% -38.5% -29.0% -36.0% Total Market -5.8% 6.8% 10.2% 1.5% 0.3% -46.1% 16.0% -6.4% -34.9% -28.1% -39.2% Investment Gain Admitted Market 21.5% Total Market 26.7% 37.5% 27.6% 17.8% 20.2% 23.7% 27.0% 29.4% 20.9% 27.1% 22.5% Gross Profit on Insurance Transaction (Before Taxes) Admitted Market -14.5% Total Market 20.9% 44.3% 37.8% 19.3% 20.5% -22.4% 43.0% 23.0% -14.0% -1.0% -16.7% Net Profit on Insurance Transaction (After Taxes) Admitted Market Total Market 17.8% 33.9% 28.1% 15.4% 16.0% -11.9% 30.9% 17.5% -7.05 1.5% n/a Source: 1991-2000 Total Market Figures -- NAIC, Profitability By Line by State in 2000. Figures for 2001 and for all "admitted market" are MDI calculations based on NAIC annual statement data, where calculations adhered to NAIC profitability formulas, Net (after tax) profits for 2001 were unavailable at the time of publication. Losses will be less than the -16.7 percent figure for gross profits, perhaps significantly so, due to tax offsets.
A-4224 Competition in the current market
The affordability crisis of the early 1980s occurred after mounting losses, real or projected, convinced major carriers of the need for significant premium increases. The losses also prompted Missouri, among other states, to adopt reforms in 1986 that reduced the liability of physicians, other health-care providers and their insurers for patient injuries or deaths.
National and Missouri data indicate the losses peaked in 1984 and rapidly began declining. Combined with major increases in premiums in the late 1980s, the drop in losses boosted substantially the profitability of the line. By 1988, Missouri quickly had established a highly profitable medical malpractice market with only 45.6 cents of benefits paid or reserved for every $1 in premium earned by the carriers.
With the decline in losses, major insurers like St. Paul Fire and Marine Insurance Co. – the national leader in medical malpractice writings – began releasing "over-reserves" that had been set up for losses.' This shift improved the financial performance of those insurers and made medical malpractice appear to be an attractive area for expansion by other insurers.
Underpricing and insolvencies
Several provider-controlled insurers – including PIE of Ohio, PHICO of Pennsylvania, PIC of Pennsylvania, Scpie of California' and MIIX of New Jersey' – expanded beyond the boundaries of their original states of "domicile" and principal marketing. These entities often used aggressive pricing strategies to establish and expand beachheads elsewhere. PIE and PHICO grew quickly in Missouri.
Many companies also had little "feel" for the legal and medical environments into which they were expanding, which can feed inaccurate actuarial projections on rates. Some did little more than copy the rate filings of apparently successful and lower-priced companies when they entered the Missouri market.
Medical malpractice is particularly susceptible to inaccurate pricing because companies cannot respond quickly to errors. Medical malpractice is known as a "long-tail" line — the precise extent of the insurer's liability is not known for years because frequency and extent of injuries often are not known for years and litigation requires further years to complete. Missouri's average of almost four years to pay a claim actually is quite short compared to other states in which the injured patient can wait a decade or more for any payment of lost wages and medical costs.
This lengthy delay in learning actual costs leaves insurers that have pursued inadequate pricing with few alternatives, particularly if they have sold "tail" insurance that covers claims filed after the policy period ends.
This nature of the line also frustrates state regulators that have few means to prove and correct underpricing or overpricing, if that occurs during periods of constricted supply.
A-4325 The case of PIE Mutual, whose entry into the Missouri market had been hotly contested, is particularly instructive on underpricing. By 1996, its last full year of operation, PIE had one-fifth of the physicians' coverage in the state and 13 percent of the entire market; it ranked second in premium volume for both areas. The Ohio Department of Insurance later reported in receivership proceedings that the company's claims exceeded its assets by $275 million, or almost three times the entire medical malpractice premium paid in Missouri.
PHICO has been the latest of the major medical malpractice insurers to become insolvent. In August 2001, the Pennsylvania Department of Insurance obtained a court order to take control of the insurer, and liquidation of assets began in early 2002. Its "negative surplus" was believed to total $250 million despite filed financial statements to the contrary. In 2000 — the last full year of its Missouri operations — PHICO ranked No. 6 among all medical malpractice insurers with $7.6 million in written premium and 8.2 percent of the entire market. It was the 5th-largest writer for Missouri doctors with 7.8 percent market share. Only the year before, PHICO had been the largest writer with 21 percent of the entire market and 24 percent of physicians, or almost twice the size of the next largest competitor.
PHICO's departure from the Missouri market in August 2001 was the first in a series that affected competitiveness of the market. In December 2001, Chicago Insurance Co. and its affiliate in the Fireman's Fund group, Interstate, announced a moratorium on new accounts and then withdrew from physicians' medical malpractice nationally; Chicago reportedly had been among the least expensive insurers for Missouri physicians. Also in December, St. Paul announced its plan to withdraw from medical malpractice nationally after 65 years in the business.'
Legion Insurance Co. went into receivership, again in Pennsylvania, in March 2002; a small insurer, it had less than 1 percent of the Missouri market. But North American Specialty Insurance Co., which had been "fronting" for the defunct PHICO, stopped writing business as well; its premium had totaled almost 4 percent of the Missouri market in 2001.
Withdrawals from Missouri Medical Malpractice Market
Company 2001 MO market share' 2001 MO loss ratio Overall Physicians Physicians/Surgeons
PHICO 8.2% 7.8% 99.4% Chicago/Interstate 9.4% 23.4% 73.4% St Paul 5.4% 4.2% 31.6% Legion 0.4% 0.5% 21.0% North American Specialty 2.8% 3.9% 44.5% Total 262% 31.6%
Market capacity severely contracted in May 2002 when Intermed Insurance Co. — the state's largest medical malpractice insurer for doctors in 2001 with 26.1 percent of premium — stopped writing policies for physicians who were new applicants because of a major rating agency's warning about further expansion given its capital structure.
A-4426 The shrinking 2002 market for physicians
In the most immediate effect of these insolvencies and withdrawals, hundreds of physicians and other health-care providers received written notice in late 2001 and 2002 that their coverage would end when their policies expired or, in the case of PHICO, before. Physicians sometimes received only 30 days notice of their nonrenewals. While a month generally is adequate time to find alternative coverage in a normal market, it is insufficient in a "hard" market when hundreds of doctors flood a small number of carriers. Only three insurers generally were available for doctors by mid-2002: Medical Assurance Co., Medical Protective Co. and the Doctors Company.
June and December are the periods when most physicians shop for coverage if they have been nonrenewed or are dissatisfied with rates because policies most commonly expire Dec. 31 (calendar-year policies) or June 30 (policies typically issued after medical students begin practicing). For those physicians with a June 30, 2002 expiration date who needed to locate a new carrier, the circumstances were dire: between the withdrawals and declination of new business by Intermed, more than 57 percent of the Missouri market had disappeared in the past year for doctors who were seeking new carriers.
The companies still writing, if they wished to expand, were handicapped by inadequate underwriting staff to satisfy demand. For example, Medical Assurance Co. — the No. 3 carrier for Missouri doctors in 2001 — was overwhelmed by applicants and was forced to hire and train new underwriters, according to its testimony at an October 2002 MDI public hearing. Physicians complained that quotes on new coverage, if they arrived, often did not come until the day their old policies expired.
In these circumstances, it is not surprising that about 13 percent, or 75, of the 582 doctors responding to a Missouri State Medical Association survey in the fall 2002 had been unable to locate other coverage, even if carriers had not become more selective and raised rates substantially.
Doctors reacted with alarm because many could not practice without coverage. For those on staff in urban hospitals, they faced losing privileges under state law if they did not obtain at least $500,000 in coverage. Since 1997, health maintenance organizations have tended to require that doctors have at least $1 million in coverage per occurrence and $3 million overall during the policy's life if they wished to remain in the networks, which provided the bulk of their patient caseload.
This shift in competitive structure of the market occurred quite suddenly. At the end of 2001, insurer reports to the Missouri Department of Insurance indicated that 32 carriers were still writing physician coverage alone, up from 27 the year before. Such numbers would have been more than adequate for the market. The depth and breadth of the availability shrinkage became apparent in late summer 2002 when MDI conducted a survey of medical malpractice writers that provided greater insights into market dynamics.
A-4527 Many were no longer writing physicians, had stopped offering coverage to new applicants or were covering only a few of the more than 300 categories of doctors.
According to the survey results, many carriers were restricting coverage of higher-risk physician specialties, such as general surgeons, neurosurgeons, orthopedic surgeons, obstetricians and emergency room doctors. These physicians tend to have the highest rate of claims and already paid the highest malpractice rates. The regular commercial market was providing few alternatives for these practitioners, who increasingly were turning to the "surplus lines" or specialty markets for coverage that is much more expensive.15 These physicians also were the most heavily represented in the MSMA survey. Rate regulation in Missouri
Missouri law gives MDI extremely limited authority to reject company medical malpractice rates unless 1) they are excessive or inadequate and 2) the market is no longer competitive.
MDI traditionally has relied on its authority to regulate casualty or liability rates under Sections 379.420 to 379.510, RSMO. The key Section 379.470 provides that:
1) Rates shall not be excessive or inadequate...nor shall they be unfairly discriminatory. 2) No rate shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable. 3) No rate shall be held to be inadequate unless such rate is unreasonably low for the insurance provided and the continued use of such rate endangers the solvency of the insurer using the same, or unless such rate is unreasonably low for the insurance provided and the use of such rate by the insurer using same has, or if continued will have, the effect of destroying competition or creating a monopoly. 4) Due consideration shall be given to past and prospective loss experience within this state and consideration may also be given to past and prospective loss experience outside this state to the extent appropriate....
A state regulation (20 CSR 500-4.100(1)(b)) then requires the filing of policy forms, rating manuals, rating plans and modifications within 10 days after their effective dates. In other words, medical malpractice insurers can begin using new policies and rates before they are filed with MDI.
The law does not define "unreasonably high" nor does it specify how MDI would determine whether "a reasonable degree of competition" exists.
Missouri and other states with similar "use and file" systems have relied on the competitive market to regulate rates. In recent practice, MDI product analysts have asked the property and casualty actuary to review filings when they consider the filing to be insufficiently documented or the rate increase exceeds 25 percent.
A-46 28 Premium costs drop from 1990 to 2001
Medical Malpractice Premium Earned
--Physicians & Surgeons —II— All Medical Care Providers 140 132 127 130 Tt3 122 118 120 108 m 131 112 96 97
89 88 89 8 90 86 83 83
80 69 68 70 65 61 61 61 63 57 60
50
40 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Year
Both physicians and all medical providers in Missouri pay less total premium today for medical malpractice coverage than they did in 1990. The overall expense for physicians is less, even though Missouri's number of licensed instate doctors grew from 9,797 in 1990 to 13,459 in 2001, or by 40 percent.
All medical care providers paid $127 million for malpractice policies in 1990, compared to $97 million in 2001, a decline of 24 percent. Today, data is available (unlike in 1990) on the non-admitted or surplus lines market, and providers purchased another $22.2 million there. So
medical professionals and facilities were paying less than $120 million in 2001 — compared to $127 million in 1990 plus whatever sales took place in surplus lines. That translates into a nominal decline of at least 5.5 percent. (Health entities that self-insure did not report in either 1990 nor 2001.)
For physicians only, the malpractice bill in the admitted market dropped to $68 million in 2001 from $94 million in 1990, or a reduction of 28 percent. (Premium figures in the surplus lines market are not available for physicians and surgeons in either 1990 nor 2001)
The declines for both all providers and physicians are even more dramatic if the figures are adjusted for inflation.
29 A-47 Not every licensed doctor needs medical malpractice insurance or is required to insure. But using figures from the Board of Registration for the Healing Arts, the average medical malpractice costs per licensed instate doctor fell from about $6,500 in 1990 to $4,900 to 2001 in the admitted market.
Premium rate increases
In 2002, nonrenewed physicians seeking new carriers also confronted the results of two years of solid rate increases from most of the state's major carriers. From the early 1990s through the end of the decade, rate increases for physicians had been extremely rare, and many doctors enjoyed substantial discounts from officially filed rates that are not subject to monitoring by MDI.
Medical malpractice rate changes, 1999-2002 Missouri market only)
Company 2001 market share Overall rate change's Effective dates
Intermed Insurance Co.*** 26.1% 65.8% 11/1/00, 11/1/01, 7/1/02 Medical Assurance Co. 16.2% 96.9% 4/1/00, 9/1/01, 10/1/02 Medical Protective Insurance 10.8% 45.6% 1/1/99, 5/1/00, 5/1/01, 5/1/02 The Doctors Company 6.4% 27.5% 10/1/00, 4/1/02, 5/1/02, 8/1/02 Zurich American Insurance Co. 2.3% none none Preferred Professional 1.6% 37.5% 1/1/01, 1/1/02 Missouri Hospital Plan 0.9% none none Truck Insurance Exchange (Farmers) 0.9% 10.0% 7/15/01 Continental Casualty Co. (CNA) 0.4% 100.0% 10/1/00 PI-IICO Insurance Co.* n/a 29.0% 7/1/00 Chicago Insurance Co.** 23.4% 39.3% 10/1/00 St. Paul Fire and Maxine** 4.2% none none
* Insolvent, August 2001 ** Withdrawing from national markets *** No longer writing for new applicants
In the past three years, the rate behavior of most carriers was clearly at odds with the Insurance Services Office (ISO), an industry rate advisory group, which files "loss costs" on behalf of smaller companies in the Missouri market. ISO's loss-cost filings for Missouri would have translated into reductions in each of the past three years: a negative 7.1 percent in May 2000; negative 2.2 percent in March 2001; and negative 6 percent in March 2002. The cumulative change would reduce costs by 15 percent, assuming no changes in such other expenses as loss adjustment, reinsurance and administration."
The Missouri State Medical Association 2002 survey found the 582 respondents — about 10 percent of its members — had faced average premium increases of 61.2 percent in 2002 alone, with some facing much larger costs. The same survey found those doctors had experienced average premium increases of almost 100 percent over a two-year period (likely the two renewal cycles in the 13 months from June 2001 to July 2002). MSMA agreed that these motivated respondents
A-4830 likely represented the higher end of rate increases and availability problems in Missouri; about 75 doctors indicated they could not find alternative coverage.
In meetings with MDI and at the public hearing Oct. 30, doctors said these premium increases exacerbated a "cash flow" problem that has occurred because, unlike many businesses and the medical business a decade ago, they cannot pass along higher costs. Reimbursements from their key income sources — managed care plans, Medicare and Medicaid — have been static or declining with little cushion available to absorb these increases. Obstetricians, for example, are heavily dependent on Medicaid, which pays for more than 40 percent of the live births in Missouri.
Dozens of physicians also took advantage of MDI's Internet Public Portal to comment on medical malpractice and voiced resentment that the remaining carriers in the market were taking advantage of their position to "price-gouge," compounded by reaction to the last-minute quotes on coverage. In particular, physicians complained about unjustified surcharges for pending, unsettled claims — even though the insurers indicated they did not levy such extra premiums.
The insurers differed on the rationale for the major price increases that new applicants experienced. From their perspective, the carriers that left the market had been underpricing the product for many years, so physicians switching to the more conservative insurers should expect a rate increase, sometimes substantial. Some departing carriers allegedly were charging discounted prices of 40 to 60 percent below other insurers. Physicians also may have been covered by previous insurers that did not surcharge for past history, so these could have experienced further premium increases if they had several paid claims.
In these cases, the switch to new carriers would involve a one-time "rate shock" rather than a long-term pattern of increases that characterized periods around 1976 and 1986.
New entrants eye Missouri physicians market
Early signs point to increasing interest from the provider community in the Missouri market for physicians, which would increase capacity and spur price competition.
Since mid-2002, plans associated with the Minnesota and Wisconsin medical societies gained licenses for the Missouri market. A new affiliate of NCMIC, a large medical malpractice insurer devoted previously to chiropractors, has applied for licenses in Missouri and other states. Organizers of a new Missouri physicians mutual have applied for licensing under Chapter 383, RSMo.
And the Missouri Hospital Plan (the state's sole provider-controlled insurer operated by the Missouri Hospital Association), working through its Medical Liability Alliance subsidiary, plans to expand its offerings for physicians; in March it will offer coverage for physicians who are on staff at the hospitals rather than just the doctors directly employed by hospitals. Particularly this entry into the physicians market could increase price competition in the near future.
A-4931 Potential solutions to Missouri's medical malpractice difficulties
Caps on total damages
Seven states have adopted limits on total damages that injured patients can recover from health- care providers for lost earnings, medical care and non-economic damages: Colorado, Indiana, Louisiana, New Mexico, South Dakota and Virginia. Kansas' attempt to impose an overall limit was ruled unconstitutional in 198817; a trial court struck down Nebraska's lid in June 2000, and the state Supreme Court is considering the appeal.'
The change has not guaranteed low loss-ratios for medical malpractice insurers — note New Mexico in the accompanying chart — but these states generally have very low comparative losses by medical malpractice carriers. (It does raise questions about why providers are paying such relatively high premiums in some of these states if losses are so low. For example, loss ratios were only 46.7 percent in Colorado; 41.3 percent in Indiana; 38.4 percent in Louisiana; 38.2 percent in Nebraska; and 52.2 percent in South Dakota.)
Neither President George W. Bush nor HR 4600, which passed the U.S. House last September, has proposed denying patients the right to recover all of their lost earnings or the cost of their medical treaunent, as have these states. Far preferable is Missouri's method of periodic payment of damages, under which an insurer can request for awards of more than $100,000; this approach particularly mitigates against lump-sum settlements swollen by medical costs that do not materialize (if the patient dies).
Such caps on total damages do provide certainty to the risks faced by the insurance industry, but can impose substantial future costs on the injured patient, the family and eventually government programs for care and lost income.
MDI is aware of no interested party, including insurers, that seriously is proposing such a cap in Missouri. With the court action in Kansas and Nebraska, no neighboring state has an effective overall cap on damages.
A-5032 Reduced cap on non-economic damages
For the past 25 years, the debate on controlling medical malpractice insurance costs has centered on reducing the compensation paid to patients or their survivors for the non-economic damages of their injuries. These damages, popularly are known as "pain and suffering," refer to a broader, more intangible kind of loss, like physical pain. These damages encompass all the new limitations that decrease the patients' quality of life — chronic pain, disfigurement, emotional distress, life with physical difficulties and/or reliance on daily custodial care, inability to have children and damage to the marital relationship — or that are faced by the dead patients' survivors, such as loss of consortium," hardships on the remaining parent or damage to the family relationship.
Missouri courts simply have directed juries to settle on awards that are "fair and reasonable." Said one 1978 decision:
One of the most difficult decisions facing the jury in a personal injury action is to decide the amount of the monetary award, if any, that the plaintiff is entitled to be awarded as compensation for past, present and future pain and suffering. The measure of damages for pain and suffering in this state is and has been what is fair and reasonable.... There is no fixed measure, table or standard which the jury can use as an accurate index to establish an award of damages. No method is available to the jury by which it can objectively evaluate such damages.... Graeff v. Baptist Temple of Springfield, 576 SW2d 291 (Mo banc 1978)
Because of the intangible nature and lack of guidelines for setting awards, insurers have been particularly critical of the unpredictability of these damages in states without caps. Even in Missouri, which has had caps for more than 15 years, insurers complained of unpredictable juries and awards in the fall 2002 MDI survey.
The national movement to caps on non-economic damages began in 1975 when California, reacting to the inability of thousands of physicians to obtain insurance during that national crisis, enacted a $250,000 lid. The cap was not subject to inflation; if it had been, the lid would have been lifted to $546,000 in 2002. The failure to index has created a loss of almost $300,000 in purchasing power for the most seriously injured patients and families.
In 1986, Missouri became one of the states (today 18) that cap non-economic damages. The Missouri General Assembly enacted a $350,000 limit, subject to annual adjustments by the Department of Insurance to reflect increases in the federal consumer price index. In 2002, the Missouri limit was $547,000, or almost exactly the California amount if it had been indexed.
Except for Kansas' $250,000 limit, no neighboring state has adopted lids on non-economic damages. Nebraska had a de facto limit of $1.25 million on all damages, including non-economic.
A-5133 States with caps on medical malpractice damages
State Premium earned Losses incurred Loss Limits on non-economic damages 2001 2001 ratio
Alaska $13,293,309 12,597,719 94.8% $400,000 with exceptions California $644,513,658 416,926,519 64.7 $250,000 Colorado $97,550,663 45,597,857 46.7 $250,000 with $1 million total Hawaii $30,074,426 20,830,292 69.3 $375,000 with exceptions Idaho $21,812,351 21,528,993 98.7 $400,000 adjusted annually Indiana $58,683,466 24,210,659 413 11.25 million cap Kansas $45,795,108 32,241,839 70.4 $250,000 Louisiana $81,910,566 31,432,473 38.4 $100,000 with $500,000 for all damages Maryland $182,617,595 201,363,731 110.3 $500,000 Massachusetts $155,175,190 147,725,882 95.2 $500,000 adjusted annually Michigan $176,596,758 106,657,813 60.4 $280,000 with exceptions adjusted annually Missouri $119,264,941 100,199,202 84.0 $350,000 adjusted annually Mississippi $44,517,385 88,223,697 198.2 $500,000 adjusted with exceptions (2002) Montana $17,343,074 20,737,185 119.6 $250,000 North Dakota $12,886,419 11,079,257 86.0 $500,000 Nebraska $22,354,359 8,530,241 382 $1.25 million for all damages Nevada $57,249,341 76,479,000 133.6 $350,000 with exceptions (2002) New Mexico $29,899,908 60,016,937 200.7 $600,000 for all damages with exceptions Ohio $299,682,201 319,650,997 106.7 $250,000 to $500,000 South Dakota $10,529,290 5,492,608 522 11 million for all general damages Utah $37,131,283 38,151,193 102.7 $250,000 Virginia $141,270,379 125,320,585 88.7 $1.5 million adjusted periodically Wisconsin $64,048,496 19,854,728 31.0 $350,000 adjusted annually West Virginia $76,930,120 74,531,461 96.9 $1 million
Countrywide 6,998,177,384 6,814,160,297 97.4%
States with all caps 2,441,130,286 2,009,380,868 823%
States with non-economic caps $1,998,931,655 1,708,779,508 855%
Source: National Association of Insurance Commissioners Italics = states with overall caps, not just non-economic damages Current through late 2002
Loss ratio data based on admitted (regulated) and surplus lines markets; Missouri's loss ratio is higher than cited elsewhere in this report because the non-admitted or surplus lines market is included here.
Non-economic damage caps, or those combined with general caps, have been ruled unconstitutional in Florida, Illinois, Alabama, New Hampshire, Oregon, South Dakota, Texas, Washington and recently Nebraska. The Kansas total damages cap was struck as unconstitutional.
A-5234 Advocates of reducing the maximum non-economic damage award to $250,000 maintain that the change would remove incentives for attorneys to pursue these cases, cutting the cost of the medical malpractice system and eventually premiums.
However, lowering the caps further in Missouri would come at considerable cost for the small number of cases in which patients suffered the greatest damage. MDI prefers to look elsewhere for solutions first, rather than reducing the compensation of victims.
If Missouri adopted the $250,000 lid, any relief for physicians and other health-care providers would not take place for several years and would amount to much smaller savings than physicians are demanding. After the Nevada and Mississippi legislatures in 2002 passed most if not all the reforms requested by insurers, including caps for the first time, doctors there were stunned to learn that they would need to wait several years for any meaningful reductions in insurance premiums. After passage, the insurers announced that they would wait to reduce premiums until the statutory changes have been tested in court and produce bottom-line results. With the "long tail" of medical malpractice and the lengthy time needed for appellate review, these changes could take years, often three to five.
Such caps have been criticized because they reduce compensation disproportionately for the young, seniors and women who do not work outside the home. Because young people often have not made career choices, their economic damages from lost earnings generally reflect minimal amounts. Homemakers, full-time mothers and retired persons usually do not have earnings affected by the medical error and resulting injury. If their medical treatment is provided through insurance, Medicaid or Medicare, non-economic damages are the only compensation received.
President Bush in January reiterated his plans to press for congressional approval of $250,000 limits on non-economic damages. Although the White House did not release details of his proposal, HR 4600 that passed the House last September with the President's endorsement would not have changed Missouri's limits. The legislation would have affected only those states that had no limits.
If the caps here shrink to the California MICRA levels, damages to injured patients would have been reduced by $8.1 million in Missouri in 2001. The reductions, affecting 37 cases altogether, would have been equal to 20 percent of non-economic damages, but only 10 percent of total amounts paid. Because the change would not have affected administrative costs, reinsurance, loss adjustment expenses, dividends and other expenses, the effect on reducing premiums would have been considerably less. Doctors, meanwhile, are complaining of 40 to 100 percent increases in premiums.
The number of claim awards that reach Missouri's indexed caps has drifted steadily downward since reaching a peak of 23 cases in 1992. In 2001, the maximum amount was awarded in only six cases, or 1.3 percent of all claims closed with payment and 0.4 percent of all closed claims. (See chart, page 19.) The average claims involve quadriplegia, blindness, lifetime care and other permanent severe or grave injuries or death as a result of the medical error.
35 A-53 Even taking into account economic damages for medical treatlient and lost earnings, few Missouri cases produce the multimillion-dollar awards that gain media attention. (See chart, page 20.) In the 15 years since Missouri's 1986 reforms, only 21 cases have received awards exceeding $2 million; in the past five years of data available, 32 reached $1 million. The number peaked in 1996, when 11 claims received awards of more than $1 million and five reached $2 million. The bulk of these awards involve economic damages that would not change under proposed tort revisions. Such figures are not difficult to reach if the injury results in permanent handicaps, inability to work and lifetime medical care for a younger or middle-aged professional or business executive.
MDI did examine 24 cases in which the final awards in 2001 were more than 200 percent of the insurers' estimates of the damages — and might substantiate claims of "runaway" juries. Most (21) of the cases involved at least significant, permanent injury, with more than half (14) involving the death of the patient; nine of the cases involved newborns with the child dying in five cases. In only three of the 24 cases were minor injuries involved, with an average award of $75,000. State provision of medical malpractice insurance
Prompted by the crises of the 1970s and 1980s, direct state provision of medical malpractice insurance has taken two main forms: joint underwriting associations (JUAs); and patient compensation funds.
A JUA addresses malpractice availability problems by giving physicians an "insurer of last resort," operated by the state, with its deficits spread in prorated shares to all casualty companies. The cost of insurance under a JUA is almost always more expensive than private insurance. Twelve states have active JUAs that provide medical malpractice coverage. Nine states — including Missouri — have statutory authority to operate a medical malpractice JUA, but have not activated one.
Among the difficulties faced by JUAs is maintaining prices that are affordable for physicians and others while avoiding the political temptation to set premiums that require all ratepayers to subsidize the legitimate business costs of physicians and other health-care providers. If premiums are too low, the state becomes the insurer of first resort, and the private medical malpractice market withers. If premiums are priced above market averages, then affordability problems are not eased. States could find that they become the insurer of "only resort" for physicians and other providers that have extensive claims histories and have become active partners in allowing unsafe practitioners to continue operating. Such JUAs also tend to lose all but the least insurable providers when the markets turn "soft" and price competition returns.
Fourteen states, including Kansas, have established patient compensation funds to provide coverage in excess of the coverage limits of a malpractice insurance policy. In these states, physicians participating in the fund are required to purchase private medical malpractice insurance, for example, for $200,000 per injury and $600,000 total coverage. The state fund then covers awards up to a maximum that, in some states, represents the total amount that an injured patient can receive from economic and non-economic damages combined. At least three of the patient compensation fund states also require all physicians practicing there to carry medical malpractice insurance, which Missouri does not; in the others, participation is voluntary, but strongly
A-5436 encouraged because judgments against providers often are not subject to damage caps unless they join.
Many of these patient-fund states have healthy loss-ratios, but others have been plagued by operating difficulties — they are much larger operations than many insurers, with almost all state physicians participating. Their financial positions range from deficits of $38 million to a balance of $576 million. These funds also have become targets of the physician community because of surcharges that now make annual fees more expensive than their private insurance. Pennsylvania, for example, is eliminating its fund and ceding those responsibilities to the private sector.
MDI recommends that the General Assembly revise state law to allow Missouri to establish a workable, limited-scope joint underwriting association to offer medical malpractice for distressed specialties.
The insolvency, withdrawal and moratoria on new business by medical malpractice insurers with more than half of the Missouri physicians market since mid-2001 has severely reduced the private capacity to provide this coverage. Even if insurers did not face profitability pressures, such an exodus — which did not stem from Missouri market or tort conditions — would place physicians at a serious disadvantage in obtaining, retaining and paying for medical malpractice insurance.
MDI remains committed to the free market as the best long-run mechanism for providing affordable coverage. However, the largest carrier ceased writing new business and anticipates dropping a substantial number of policyholders upon their next expiration date; only three companies of appreciable size are regularly offering policies to new physician-customers.
It is highly debatable whether the market is any longer competitive for providing medical malpractice coverage for several higher-risk specialties, including obstetricians, neurosurgeons, orthopedic surgeons, trauma and emergency room physicians and perhaps all general surgeons. In the heavy July 2002 renewal cycle, the remaining writers were not prepared to handle the crush of new applications received. Restricted supply in the face of increasing demand inevitably promotes higher prices among remaining carriers, and the "long tail" nature of this line complicates regulatory attempts to prevent overpricing.
Several companies are interested in entering Missouri's physician market. Generally, though, these carriers will require time to establish themselves and restore the degree of competition found here not long ago.
Besides addressing the currently constricted supply of coverage, Missouri needs to act to protect public health and safety because the physicians most greatly affected are critical to accident victims, those who need surgery and pregnant mothers. Most rural Missouri counties already have physician shortages, and the state should act to prevent the departure of existing physicians there or decisions by family practitioners to drop obstetrics.
Chapter 383, RSMo, already has provisions for the director of insurance to establish a joint underwriting association that would assess all casualty (liability) insurers in the state on a pro-rata
37 A-55 basis for startup costs and any operating deficits. The statute, however, is not workable in today's environment because 1) the JUA would have to charge double the rates available in the private market for a physician's first year of coverage, 2) the financing structure would impose substantial costs on the general revenue fund and 3) it is unclear whether the JUA could limit its scope to medical providers that have the greatest difficulty obtaining coverage and greatest importance to the public safety.
Statutory changes must address these deficiencies before a limited-scope JUA can function properly.
The program would have a structure that would not erode state revenues through tax credits or other loss of premium tax revenues that exist under current law.
The JUA should have the ability to charge rates that are actuarially sound, unless the legislature agrees that subsidies are necessary. Considerable evidence exists that medical malpractice was substantially underpriced during the late 1990s, and the insurers responsible largely have withdrawn or gone insolvent. But JUA rates that are actuarially sound also could guard against premium charges that may represent the other extreme -- "price gouging" -- or inaccurate projections by private insurers during this period of transition to a more provider-friendly market.
MDI is not proposing that the state enter the medical malpractice business on a long-term basis or on a major scale. A JUA is expected to have a rather short life span (possibly three years or less) after which most of the state's insurers believe the hard market for pricing and availability should ease. The three years would cover a transition period in which the medical malpractice industry could adjust and expand its own resources to meet the demand in Missouri.
Many Missourians — including all homeowners — are experiencing substantial premium increases in this "hard" property and casualty market while HMO premiums rose 47.9 percent from 1999 to 2001; so most residents are experiencing "rate shock." But this JUA effort is targeted at those medical specialties that are most dramatically affected by rate upgrades and are deemed essential to the public safety.
Finally, the JUA cases would represent an opportunity for Missouri to test new approaches to claim defense, other facets of medical malpractice litigation and requirements to improve patient safety.
The JUA could operate under control of the director, as prescribed currently in Chapter 383, or under a different governing structure. A considerable number of states operate JUAs or patient stabilization/compensation funds (excess liability funds), so numerous governing models are available.
A-5638 Commission on patient safety
The governor should immediately establish a Missouri Commission on Patient Safety to explore ways to reduce negligent medical errors that drive the cost of malpractice and permanently disable and/or result in the death of residents.
Missouri's business community reduced its workers compensation insurance costs by 25 percent in the 1990s because it took steps to improve workplace safety and reduce on-the-job injuries even though medical costs and wages were rising. Missouri's medical community also could reduce its medical malpractice costs in the long run — and benefit all parties concerned — by increasing patient safety through better education and other steps to improve the quality of medical care. The current debate has been sadly lacking in attention to the root causes of medical malpractice actions — medical errors.
From the landmark 1990 Harvard Medical Practice Study to the 1999 National Institute of Medicine report to a burgeoning number of others that echo the findings, the literature is now filled with documentation of preventable medical errors that, by some estimates, result in the death of almost 2,000 Missourians each year in hospitals alone and impose permanent disabilities on many more. The elderly are among the most vulnerable to such mishaps, and this effort could dovetail with the state's initiatives on improving nursing home care. Private accreditation authorities also have imposed new requirements on patient safety, including notification of errors to injured patients and their families.
Our system of ensuring patient safety may have grown accustomed to relying on medical malpractice judgments to compensate victims rather than taking often painful steps to eliminate unsafe practitioners and upgrade health-care delivery systems that breed preventable errors. Experience in other states and information on the National Practitioner Data Bank indicates that a small number of doctors — perhaps 5 or 6 percent — accounts for more than half of medical malpractice claims.
MDI recommends that the commission include representatives from the Missouri Department of Health and Senior Services, Missouri Board of Registration for the Healing Arts, Missouri Department of Insurance, Missouri State Medical Association, Missouri Association of Osteopathic Physicians and Surgeons, Missouri Academy of Family Physicians, the Missouri Hospital Association, the Missouri Health Care Association, the Missouri Association of Homes for the Aged, Missouri Nurses Association, the state's medical educators, other medical groups and consumers.
The commission should report back to the governor by Jan. 1, 2004 with recommendations for administrative and legislative action, including mandatory reporting of medical errors, public disclosure of medical errors and malpractice judgments, standards of care and any changes in licensing to protect health-care consumers.
A-5739 Revisiting the Scott decision
Insurers and providers have been stirred by a recent court decision that one injury can have more than one non-economic damage cap applied, although it followed the findings of a federal court on a Missouri case several years before. In Scott v. SSM Healthcare of January 2002, the Missouri Court of Appeals, Eastern District, countered most previous interpretations of the Missouri statutory cap on non-economic damages "per occurrence" set forth in Section 538.210, RSMo. In Scott, a 17-year-old boy sustained serious permanent injuries as result of an undiagnosed sinus infection that spread to his brain. The boy was involved in a car accident and was taken to the hospital where he was treated for minor injuries and released. Two days later, the boy returned to the hospital's emergency room, complaining of severe headaches. The boy received a CT scan of his head, and radiologist Dr. A concluded that the CT scan was normal. The boy was diagnosed with a mild concussion, presumably caused by the car accident, given headache medication and sent home. The next day the boy's condition did not improve, and the parents called the hospital to report continuing headaches, lethargy, nausea and vomiting. Emergency room physician Dr. B. advised them that these symptoms were further evidence of a concussion and should pass in a few days. The next morning, the boy collapsed in his kitchen, unable to use the right side of his body. He was rushed to a different hospital where a spinal tap and CT scan revealed a brain infection and swelling inside the skull. After several brain surgeries, the boy remained in a coma for several weeks. Despite considerable recovery, the boy sustained permanent injuries including "a significant degree" of paralysis on the right side of his body and a permanent drainage tube in his brain. The boy and his mother filed suit against the hospital (both doctors were deemed agents of the hospital) alleging that Dr. A negligently misread the initial CT scan that would have permitted detection and treatment of the sinus infection before it spread to the brain and Dr. B negligently failed to instruct the parents to bring the boy back to the emergency room. The jury found for the plaintiffs, and the trial court determined the boy was entitled to receive the statutory cap for two separate occurrences of malpractice. The hospital argued on appeal that because it was a single defendant, only one cap for noneconomic damages could apply to it. The court of appeals agreed with the trial court and determined that the only way to give meaning to the "per occurrence" language in the statute is to interpret Section 538.210.1 as applying a separate noneconomic damages cap to each separate, distinct negligent act by a defendant. The court held that the legislature otherwise would not have needed to place the "per occurrence" language in the statute. In the Scott decision, the Missouri Eastern District Court of Appeals followed the 1996 federal court decision in Romero v. U.S that concluded two separate damage caps were appropriate when two separate, distinct "occurrences" of medical malpractice contributed to the plaintiff's injuries."
The Scott decision has clearly caught the attention of doctors and insurers. Numerous doctors mentioned the decision in letters, telephone calls and e-mails to MDI. Insurers mentioned it
A-5840 repeatedly in their responses to the MDI survey, and its ramifications were discussed at the October 30, 2002 public hearing.
The two concerns are that, first, the court decision violated the legislative intent of Section 538.210, RSMo, and, second, insurers have set their rates for years with the understanding that Missouri law permitted a single cap on non-economic damages per injured plaintiff, yet multiple caps may apply.
Whether the Missouri courts violated the intent of the General Assembly is often hard to determine. The official legislative history on bills is minimal, and the 197 members of the Senate and House may each have differing interpretations of a piece of legislation. The Scott court noted that the term "occurrence" was not defined in the statute itself, and that common dictionary definitions could plausibly refer to either the harm a plaintiff has sustained or to an act of medical negligence causing that harm.
Consistent with the Scott decision, the pre-legislative-session transcript of the meeting of stakeholders, including trial attorneys, hospitals, physicians and insurers in the medical malpractice debate from 1985, does refer to agreement on applying a cap. The representative speaking on behalf of the Missouri Association of Trial Attorneys (MATA) stated:
The first area to be covered would deal with a cap on awards for non-economic loss. And I believe that we are in agreement that there would be no aggregate cap on awards for non-economic loss.'
The MATA representative then discussed the amount of the cap, the definitions of "defendant" and "health care providers," the exclusion of punitive damages from the cap and the need for a section to allow punitive damages only where willful or wanton conduct is shown. Afterwards, the other participants at the meeting agreed with the MATA characterization of the group's consensus
On the other hand, the standard definition within the insurance industry of an "occurrence" agrees with the losing argument advanced by the defendants in the Scott case. For example Barron's Dictionary of Insurance Terms (3td. Ed.) defines an occurrence as:
An event that results in bodily injury and/or property damage to a third party A clause that is common to most liability insurance policies stipulates that all bodily injuries and/or property damages resulting from the same general conditions are interpreted as resulting from one occurrence and thus subject to the policy limits per occurrence.'
The insurance industry interprets the "per occurrence" language of Section 538.210 more akin to "per injury" than "per negligent act." A similar definition of "occurrence" can be found in medical malpractice policies used in Missouri. For example, the policy used by the Medical Protective Co. says an "occurrence" means
"accident All injuries arising from: a. the same or related acts, errors or omissions; or b. the continuous or repeated exposure to substantially the same harmful conditions will be considered one occurrence."
A-5941 In terms of the availability and affordability of medical malpractice insurance in Missouri, the second concern regarding the Scott decision is perhaps more important: malpractice carriers are concerned that they priced coverage assuming that Section 538.210, RSMo provides a per-injury cap.' After Scott, that is clearly no longer appropriate in all situations. Yet, they cannot retroactively re-price their product. It is already typical for plaintiff's attorneys to sue multiple providers in a malpractice lawsuit; over the past 14 years, 56 percent of claims closed with payment had multiple defendants. The presumption is that plaintiffs' attorneys will begin to request multiple caps, increasing the average amount of claims, perhaps substantially.
In their testimony at the October 30, 2002 hearing, representatives of the Missouri Association of Trial Attorneys said they felt the Scott decision was a limited one, based on the facts of the case. One of the attorneys had taken three cases to verdicts since the decision without asking for multiple caps.
The Scott decision clearly does not underlie the rate increases that companies had already imposed. The Department of Insurance plans to ask the larger carriers whether they are seeing Scott-based requests for multiple caps on a regular basis in the future.
MDI recommends that the General Assembly revise Section 538.210 to preserve stability in the Missouri malpractice market. Predictability allows insurers to have greater confidence in their risk projections. Missouri's 1986 reforms have been tested by time and provide a substantial pool of loss data on their effect. Uncertainty because of Scott likely will encourage insurers to raise rates and keep them high for several years until the effect becomes clear.
From a legal and actuarial viewpoint, Scott may have only a slight effect on losses in Missouri. The MDI staff's review of the history of Missouri medical malpractice law, the federal precedent, the statute's background and the Scott case details found considerable underpinning for the decision, and two "occurrences" of medical malpractice appear to have taken place in the case.
On the other hand, insurers certainly view the case as added risk to Missouri's medical malpractice environment, which is helpful neither in keeping premiums reasonable nor in attracting new insurers to the market. The trial bar's use of Scott in crafting multiple caps in current court pleadings almost certainly will feed the insurers' perception.
If the General Assembly wishes to reverse the decision, it simply can delete "per occurrence." Affidavit of merit
Proponents advocate strengthening Missouri's statutes requiring that the plaintiff file an affidavit of merit on the alleged act of malpractice. MDI has been advised by insurers that judges frequently do not dismiss the case if no such affidavit is filed.
A-6042 The proposal would require 1) dismissal — without prejudice — if the affidavit is not filed within 90 days unless the court allows an extension and 2) the use of physicians for the affidavit who are licensed in the same discipline and actively practicing in the same field.
The medical affidavit was included in the 1986 reforms as a replacement for the professional liability review boards, which were established in 1976 as nonbinding screening mechanisms to reduce the filing of frivolous lawsuits. The boards were ruled unconstitutional in 1979. Yet the affidavit process needs strengthening to fairly discourage the filing of lawsuits that lack merit. Two-thirds of Missouri medical malpractice cases eventually are closed without any payment, and the ratio increases for claims against physicians.
The resources that private insurers are choosing to use to defend these cases — about $10,000 each for those claims with no award — have strained their financial underpinning. From 1997 to 1999, insurers' loss adjustment expenses — costs for defense attorneys, expert witnesses and the like — jumped from 15 percent to 41 percent of all medical malpractice premiums collected in the state. In 2001, the share still rested at 31 percent.
MDI sees the affidavit of merit as a potentially more valuable and far less objectionable means of reducing less meritorious lawsuits than other proposals, such as drastically reducing the cap on non-economic damages or contingency fee caps, if the language is crafted carefully.
But the available legislative draft, for example, would require a plaintiff's attorney to find a licensed nursing home or hospital to make such an affidavit if this type of facility is the defendant; no such licensee is likely to do so. The same probably would apply if the defendant was an ancillary provider, such as therapists typically employed by a facility. With the advent of managed care, such ancillary providers are more frequently the target of medical error cases. The requirement about a physician licensed in the same specialty/subspecialty as the doctor committing the alleged medical error may also represent too high a requirement in some areas with close-knit medical communities and seems unnecessarily onerous in cases of obvious errors (sponges or other foreign objects left in the body after surgery). The legislature may also wish to consider special circumstances in which multiple defendants are named because medical records are not available to identify the negligent party.
MDI agrees with the proposal that the court should be required to dismiss the case without an affidavit, unless an extension is granted, because lawsuits of suspect merit should not become mere bargaining chips for a settlement with the provider and the insurer. Further restrictions on punitive damages
Proponents of tort change also have circulated heightened requirements for punitive damage awards, although by all accounts these are rare in Missouri and are not covered by regular medical malpractice insurance. Missouri already requires that the plaintiff prove the provider
A-6143 engaged in "willful, wanton or malicious conduct" — a standard that only a tiny fraction of cases could meet.
The proposed change would require "clear and convincing" evidence — the highest civil standard — that the medical action was "outrageous because of the tortfeasor's (provider's) evil motive or reckless indifference to the rights of the plaintiff." Maximum damages would total twice the actual economic and non-economic damages awarded.
This provision, in effect, would eliminate punitive damages as a consequence for even the most flagrant cases of malpractice in Missouri. Other statutory, administrative changes
Formal examination on medical malpractice ratemaking
MDI has scheduled a formal examination of leading medical malpractice insurers to answer growing questions about ratemaking.
First and foremost, the examination will determine whether the medical malpractice market in Missouri is competitive. Under Section 379.470, RSMo, MDI cannot reject rates on lines like medical malpractice unless 1) the rates are excessive or inadequate and 2) "a reasonable degree of competition does not exist."
This examination will focus on the physicians' portion of the market, which had as many as 32 companies reporting activity through the end of 2001; however, a fall 2002 MDI survey of carriers indicated that only three were still open to writing most new business -- i.e., for newly licensed doctors, physicians who lost their previous carrier and those who were shopping for better rates or service. Between the dearth of carriers and the implications of maintaining "tail" coverage, physicians have limited ability to change insurers in the current market and must absorb premium increases, regardless of size.
If the examination determines the market does not have "a reasonable degree of competition," the MDI team will review whether rates for coverage are excessive, both overall and for indi- vidual specialties. Over the past three years, medical malpractice carriers that dominate the Missouri market have raised rates by 25 to almost 100 percent. Anecdotal reports indicate rates for some doctors and subspecialties may have increased by even larger amounts. Doctors particularly are skeptical of the reasonableness of "tail" coverage that they buy to protect themselves when a "claims-made" policy expires.
The MDI team also will examine how carriers calculate rates and the role Missouri loss experience plays in those calculations. For example, during the 1990s, insurers' rates filed with MDI had little relationship to actual discounted charges to policyholders, according to survey results. MDI has received sharply differing reports from policyholders and companies on such issues as surcharges for adverse claims histories and pending claims. MDI's desk audits also have
A-6244 failed to provide satisfactory determinations of how heavily Missouri's tort environment and insurers' experience have affected rate determinations, compared to national data. And MDI needs far more specific data on rates for specific subspecialties, such as obstetrics and neurosurgery, which are not now made available.
The examination also will review the amount, nature and use of insurers' spending for loss adjust- ment expenses (LAE), which in medical malpractice largely consists of defending against a claim that results in a lawsuit. In 1997, Missouri's medical malpractice insurers were spending 15.6 percent of premium on LAE, but that figure grew to 41.4 percent in 1999. In 2001, the spending still exceeded 31 percent of premium. Although medical malpractice has had historically higher spending levels on LAE than other lines because most claims entail lawsuits, such rapid growth and high spending has placed severe strains on the line's potential profitability.
As part of this examination, MDI also plans to determine how it can better collect data to detect difficulties in the market and to identify problem areas. Missouri is among the few states that collects and publishes data specific enough that policymakers have a broad understanding of trends for physicians versus medical malpractice in general. However, severe problems can exist with obstetricians and surgeons even though family practitioners largely escape those difficulties.
MDI also will consider making its recent survey of carriers an annual exercise, at least until the market stabilizes. Policymakers in state government need better insights into medical malpractice market dynamics, certainly as long as supply is severely limited and pricing is both high and vola- tile.
Elimination of mandatory insurance by law and contract
Missouri's 1986 law only requires physicians to carry medical malpractice insurance — a minimum of $500,000 — if they are on staff at a hospital in a county with at least 75,000 residents: St. Louis City and the urbanized counties of St. Louis, Clay, Boone, Buchanan, Franklin, Greene, Jasper, Jefferson and Jackson. Hospitals in smaller counties may require doctors on staff to carry such coverage, and HMOs since 1997 typically make physicians in their networks purchase coverage of $1 million per occurrence and $3 million maximum.
One draft legislative proposal would eliminate all legal and contractual provisions mandating coverage of physicians and, by implications, their staffs. They would have the freedom to carry lesser coverage or "go naked." Physicians with few if any personal assets would have few incentives to purchase a policy, denying patients that protection.
The prohibition on hospitals and health plans requiring coverage would transfer to those entities 100 percent of the cost of liability insurance for their operations. They, of course, likely would reduce compensation for physicians to cover those expenses. Doctors, in turn, would continue to be named as defendants in medical malpractice litigation, but almost certainly would have to hire their own legal defense out of pocket.
A-6345 MDI believes that medical malpractice insurance provides necessary assurances for patients who are the subject of medical negligence and would oppose the repeal of Missouri's minimal requirements on medical malpractice coverage. The state's efforts are best focused on making such insurance more affordable and available for physicians and other health-care providers.
Medicaid reimbursements
MDI strongly recommends that, as soon as practical, Governor Holden consider adjustments to the state Medicaid reimbursement rates for obstetricians, who handle more than 40 percent of deliveries in Missouri under this program. As medical trade groups readily acknowledge, many of the current difficulties stem from the inability of doctors to pass through increased personal medical malpractice costs to HMOs, Medicare and Medicaid. Emergency room doctors, for example, are facing these expenses despite a reduction in Medicare reimbursements.
While doctors eventually can negotiate with managed care companies to raise reimbursement rates, obstetricians have no such ability under the Medicaid program. (Medicare is outside state control.) Despite the state's general revenue difficulties, it has a vested interest in making sure that Missouri's newborns have access to qualified physicians with insurance coverage, particularly in already underserved inner-city and rural areas.
Use of Missouri actuarial data for ratemaking
The law should explicitly allow MDI to reject filings that do not meet acceptable standards for relying on Missouri-only data in making rate calculations. The Insurance Services Office (ISO), relying on Missouri-only data except for trend, has advised smaller companies that rates for Missouri doctors should have been reduced for the past three years, despite large increases by other carriers.
Missouri could require the reporting of loss data to ISO, which now receives data for slightly more than one-third of the Missouri market, or MDI could otherwise appoint a statistical agent to collect and analyze Missouri data for use by insurers in setting rates.
Prohibition on surcharges for pending claims
Missouri, by law or regulation, should prohibit surcharging medical providers that have a pending medical malpractice claim/lawsuit. Two-thirds of medical malpractice claims do not result in payment. Many claims are filed that are a result of poor outcomes, not medical negligence or incompetence.
Most insurers advised MDI that they do not surcharge for such open claims, but carriers refuted that assertion. The disagreement may lie in nomenclature: most insurers appear to rely solely on discounts from base rates for "claims-free" records; doctors merely see that they are quoted a higher rate for having a pending claim and describe that as a "surcharge."
A-6446 Barring any pricing differential would, if nothing else, provide reassurances to physicians.
MDI plans to investigate the use of these surcharges/discounts in the forthcoming examination of medical malpractice carriers.
Adequate notice to policyholders
MDI should seek statutory revisions that give physicians and other medical malpractice policyholders at least 60 days notice of nonrenewals and renewal rates. Unlike most policyholders in Missouri, medical malpractice insureds have no statutory protections that require adequate advance notice of nonrenewal and renewal rates.
Better monitoring of the market
MDI collects the most extensive state data in the country on medical malpractice insurance, and medical malpractice insurers -- including self-insured organizations -- are required to file specific data, such as claims information, with the agency. While many self-insureds comply with the law, others have been lackadaisical at best and defiant of their legal responsibilities at worst. MDI should have the power to fine self-insureds that do not report data as required by law.
Staggered policy expirations
MDI should work with insurers on breaking the logjam of policy expirations that now occur at the end of June and end of December for physicians to avoid any repetition of the "11th-hour quote" phenomenon that resulted this year. With the withdrawal of medical malpractice insurers, underwriters at the remaining carriers were unable to evaluate new applications, and too many physicians did not receive quotes on new policies until a few days or hours before their current contracts expired.
A-6547 Footnotes
Much of the material on the background of medical malpractice is drawn from the testimony of Lawrence Smarr, president of the Physician Insurers Association of America, before the U.S. House Judiciary Committee's subcommittee on civil and administrative law, June 12, 2002.
2 Black's Law Dictionary. 6th ed. St. Paul, MN: West Publishing Co., 1991.
"(1)he nature of both medical injuries and medical records makes it difficult for the patient to determine from his own resources whether a claim is valid. The malpractice system must thus rely heavily on discovery following filing of a claim (lawsuit) to determine whether there is evidence of actual negligence. Malpractice claims also generally name all parties involved in a patient's care (for example, the internist, surgeon, anesthetist, and hospital) in attempting to detect who the negligent party is. It is only through this discovery process that a plaintiff's attorney can judge whether it is worth investing resources to pursue the case further. The need for such a process implies, however, that there will be (many dropped rather quickly. Although dropped quickly, these cases inevitably impose some costs of defense, add to the administrative cost of the tort system, and lead to a perception of unfairness among doctors." "Reforming Medical Malpractice and Insurance," Joseph P. Newhouse and Paul C. Weiler, Regulation: Cato Review of Business and Government, Cato Institute, Washington, D.C.
Newhouse is the John D. and Catherine T MacArthur Professor of Health Policy and Management at Harvard University and director of the Division of Health Policy Research and Education. Paul C. Weiler is a professor at Harvard Law School.
The Missouri claims data does not include those involving PHICO in 2001. The Pennsylvania Department of Insurance took PHICO into rehabilitation (and later liquidation) in August 2001. The rehabilitators did not submit reports to MDI on claims closed and filed, and that information is not recoverable now It is difficult to project the likely reports because PHICO had been rapidly losing its market share in Missouri over the previous two years; trending may have been unaffected because earlier years did not indude PIE, another insolvent medical malpractice insurer. MDI expects to work with new management of the state's guaranty association, which is processing PHICO claims, to add information on these claims as they close.
Missouri law requires self-insured providers to report data on claims filed and closed in Section 383.105, RSMo. MDI staff have identified some providers who do not do so and has succeeded in gaining only partial compliance; one hospital system has refused. MDI does not have authority to fine violators. To the extent that providers have not been buying coverage in the admitted or surplus lines markets recently, the lack of such data does not affect trending. s U.S. Department of Labor, Bureau of Labor Statistics.
6 Time Series Analysis of Cost Components of Medical Malpractice Awards, 1990-2001
Variable Parameter Estimate Significance Level (P-Value) Intercept -1,33,803 .0001 CPI-Health Care, Lagged One Year 4,592 .0001 Missouri Average Annual Wages, Lagged One Year 32 .0001 Dummy Variable: Injury Severity Level 3 & 4 24,293 .0014 Dummy Variable: Injury Severity Level 5 & 6 104,212 .0001 Dummy Variable: Injury Severity Level 7 & 8 403,527 .0001 Dummy Variable: Injury Severity Level 9 126,998 .0001 Number of Years Since 1990 -66,834 .0001 All autocorrelative coefficientss to the fourth order (not shown) are significant to the .0001 level. Source: Missouri Department of Insurance medical malpractice claims data; Bureau of Labor Statistics Medical CPI for St. Louis and average annual wages for Missouri. Regression based on 6,694 claims close with payment, 1990-2001
A-6648 7 A portion of the decline in premiums can be accounted for by an increase in the market share of non-admitted writers, or the so-called surplus lines market that is not subject to state regulation. Based on calculations of NAIC annual statement data, the non-admitted market share of premiums earned increased from 10.9 percent to 18.6 percent between 1997 and 2001. (NAIC data on medical malpractice premiums for surplus lines companies is not readily available until 1997.) Medical malpractice premiums in the non-admitted market rose from $12.4 million in 1997 to $22.2 million in 2001; all of the increase occurred in 2000 and 2001. The data is not available on specialties, such as hospitals and physicians.
8 The National Association of Insurance Commissioners, based in Kansas City, is composed of the insurance superintendents, directors and commissioners for all states, territories and the District of Columbia. It has an independent staff of analysts that produces multi-state data
9 St. Paul reportedly released $1.1 billion in over-reserves from 1992 to 1997. Wall Street Journal, June 24, 2002.
10 Scpie is withdrawing from its national expansion program and retrenching to California-only business. it In May 2002, the New Jersey Department of Banking and Insurance approved a plan for MIIX to discontinue its non- New Jersey business, close out its business in a state where it writes 37 percent of all doctors and open a successor company. The department indicated MIIX had enough to pay claims on current policies, and the plan — unlike an insolvency proceeding — avoids referral of new claims to the state's guaranty fund, which would only pay $300,000 per claim and subject individual doctors to paying the remainder of claims and defense costs.
12 PHICO's 2000 market share is used because the Pennsylvania liquidators did not submit premium information for 2001.
13 St. Paul's operations in Missouri had been highly profitable, with only a third of premium paid or reserved for losses. It had sought no rate increases here in recent years.
14 Except for PHICO, which shows 2000 numbers. The Pennsylvania Department of Insurance's liquidators do not file required reports when insurers domiciled there become insolvent
" These figures do not include cancellation of discounts.
" ISO has advised its member companies that it plans to file "loss-cost" increases of 13.3 percent for Missouri doctors and 14.3 percent for Missouri hospitals, effective Apri11, 2003. It based its projections —which do not include loss adjustment and administrative expenses —on reports from companies with 36.7 percent of the Missouri market.
17 Kansas Malpractice Victims Coalition v. Bell, 243 Kan. 333, 757 P.2d 251 (1988)
18 In Nebraska, a $1.25 million cap on total medical malpractice awards, which had been in place since 1976, was ruled unconstitutional in June 2000 by a trial court that upheld a $5.6 million judgment for a baby's pre-birth injuries. The Nebraska Supreme Court is reviewing the case, Gourley a Nebraska Methodist Health System Inc. In his ruling, the district court judge said that the cap was unconstitutional in that it creates two classes of malpractice victims: those with economic damages amounting to less than $1.25 million who can recover all their expenses and those who are more seriously injured who can only recover a portion. The constitution guarantees that everyone in a particular dass be treated equally, he said. The judge also said that he could find no legitimate relationship between insurance and the cap. Insurance companies are only responsible for the first $200,000 of an award. The rest is paid from a state pool, the Hospital Medical Liability Excess Pool, which is funded by health care providers — generally known as a "patient compensation fund." The cap had been rarely reached. The case is being appealed to the state Supreme Court.
19 Consortium is the legal right of one spouse to the company, affection and assistance of the other.
' Romero v. U.S., 865 F.Supp. 585 (E.D. Mo. 1994), at page 593.
A-6749 21 Transcript of the November 27, 1985 meeting of the Missouri Association of Trial Attorneys, the Missouri Association of Osteopathic Physicians and Surgeons, the Missouri State Medical Association, the Missouri Hospital Association, the Missouri Professional Liability Insurance Association, the Providers Insurance Company, the Missouri Medical Insurance Company, Medical Defense Associates and the Professional Mutual Insurance Company, at page 4.
22 Barron's Dictionary of Insurance Terms, Third Edition, 1995. See also the definition in the Glossary of Insurance and Risk Management Terms of the International Risk Management Institute, Inc., Sixth Edition, 1996.
At this writing, MDI has not had the opportunity to query insurers on why such an assumption was realistic, given the contrary 1996 decision by the federal court in the Romero v.U.SU.S. case.
A-6850 2005 Missouri Medical Malpractice Insurance Report September 2006
A-69
A-70 Also Available From DIFP
The following reports are available by sending a written request along with $35 to: Missouri Department of Insurance, Financial Institutions and Professional Registration, P.O. Box 690, Jefferson City, MO 65102-0690
1. Missouri Complaint Index Report summary information: http://www.insurance.mo.gov/reports/complaint/index.htm
2. Missouri Department of Insurance Annual Report summary information: http://www.insurance.mo.gov/aboutInsurance/annual_report.htm
3. Missouri Legal Malpractice (Closed Claim) Report summary information: http://www.insurance.mo.gov/reports/legmal/index.htm
4. Missouri Life, Accident & Health Supplement Data summary information: http://www.insurance.mo.gov/reports/suppdata.htm
5. Missouri Market Share Report summary information: http://www.insurance.mo.gov/reports/mktshr.htm
6. Missouri Medical Malpractice (Closed Claim) Report summary information: http://www.insurance.mo.gov/reports/index.htm
7. Missouri Product Liability (Closed Claim) Report summary information: http://www.insurance.mo.gov/reports/prodliab/index.htm
8. Missouri Property & Casualty Supplement Report summary information: http://www.insurance.mo.gov/reports/suppdata.htm
9. Missouri Real Estate Malpractice (Closed Claim) Report summary information: http://www.insurance.mo.gov/reports/remal/index.htm
10. Mortgage Guaranty Report summary information: http://www.insurance.mo.gov/reports/mortguar/index.htm
11. Private Passenger Automobile Report summary information http://www.insurance.mo.gov/reports/ppauto.pdf
12. Missouri Health Maintenance Organization Report summary information: http://www.insurance.mo.gov/reports/hmo/index.htm
Databases: For more information: http://www.insurance.mo.gov/reports/index.htm#aggdata
1. Medicare Supplement Experience Data 2. Commercial Liability Experience Data 3. Missouri Zip Code Insurance Data for:
¾ Homeowners/Dwelling Fire, ¾ Farmowners (dwelling only), ¾ Mobile Home, ¾ Earthquake, and ¾ Private Passenger Automobile
Some data is available to the public for a fee by special request only. For additional information, contact the Statistics Section at (573) 751-4126.
A-71
A-72 Contents
Section Description Page
Executive summary
I Major Historical Trends 1
II Claim Severity 59
III Claim Severity by Injury Severity 71 And Lapsed Time to Disposition
IV Indemnity Analysis by Company 85
V Indemnity Analysis by Professional Specialty 93
VI Claim Study by Means of Disposition 103
VII Market Share and Experience Data by Company 115
Definition of Terms 141
A-73
A-74 Executive Summary
Data Sources
This report is based upon data provided by insurers and self-insured hospitals to the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). These data include open and closed claims that insurance companies and self-insured hospitals are required to report under Section 383.115 RSMo. The department makes every possible effort to make sure these data are accurate; however, the accuracy of this report depends largely upon the accuracy of the data filed by the insurers and self-insured hospitals.
As a caveat, readers are cautioned that claims covered by self-insureds and largely unregulated surplus lines companies are underreported. While all malpractice providers are required by statute to report claims data, DIFP has traditionally had limited regulatory authority over such entities. While the actual number is unknown, DIFP believes that between 15 and 20 percent of Missouri malpractice claims go unreported. Recently, new legislation was enacted to remedy underreporting, but it is currently being implemented and does not impact the data in this report.
Additional information is derived from the Page 15 supplement to the annual statement that companies are required to file. These data contain information about type of business, company, volume of business, market share, loss ratio, and insurer expenses.
Highlights
Data for physicians and surgeons, hospitals and other medical care providers are summarized in this report. The category of “other medical care providers” includes, but is not limited to, dentists, nurses, nursing homes, chiropractors, pharmacies, optometrists, podiatrists/chiropodists, clinics, and corporations.
Among the findings of the report are:
Profitability Medical malpractice operations in Missouri returned a profit for the second consecutive year, following depressed and even negative returns for the period of 1999-2003. Claims incurred plus Missouri-specific loss adjustment and administrative costs amounted to 88.5 percent of earned premium in 2005 for the total market, and 88.7 percent for the licensed or admitted market (excluding the largely unregulated excess and surplus lines companies). These costs had exceeded 100 percent of premium during the five years preceding 2004.
Overall, profitability of the medical malpractice line may be assessed by adjusting Missouri underwriting results to account for expenses and revenues that are not state or line specific, such as investment returns, various unallocated costs, and federal taxes. The National Association of Insurance Commissioners (NAIC) reported that medical malpractice insurance in Missouri produced a net return of 17.2 percent of earned premium in 2004. Estimates produced by DIFP, using the NAIC profitability formula, indicate a profit rate of 13.5 percent of earned premium in 2005.
Incurred claims declined from $126.0 million to $114.4 million between 2004 and 2005, representing 49 percent of earned premium (loss ratio). However, defense and adjustment expenses related to settling claims, the largest expense component for medical malpractice insurance, increased from $50.4 million to $72.7 million over the same period.
After two years of significant declines, the number of newly opened claims spiked sharply in 2005. One of the most instantly recognizable features of the 2005 claims data is the historically unparalleled spike in the number of new claims. Newly reported claims for all practitioners is the highest recorded in the DIFP database, surpassing the previous high reached in 1986. In 1986, 2,128 claims were opened, declining to 1,540 in 2004. In 2005, 2,425 new claims were reported to insurers.
A-75 The timing of 2005 claims suggests that the large increase is related to the implementation of new tort limitations effective for claims filed after August 2005. The media widely reported long lines for dockets accepting new claims at the end of August. Insurers have also notified DIFP that the tort limitation deadline produced a large influx of new suits filed.
A month-by-month examination of newly opened claims supports this interpretation. The annual increase is attributable to activity occurring in August, September, and October of 2005 as insurers responded to the August lawsuits.
The number of claims closed reached near historic lows in 2005. After increasing for three consecutive years, the number of closed claims reported to the DIFP significantly declined in 2005. Total closed claims declined by nearly 8 percent to 1,699 between 2004 and 2005, a figure approaching the historic lows of the late 1990s. Similarly, claims closed with payment declined from 523 to 478 in 2005. Claims closed against physicians and surgeons also declined at a similar rate, though claims against hospitals increased by approximately 10 percent.
The average award per paid claim increased slightly in 2005, following sharp increases observed in the three prior years, reaching an historic high. In 2001, average awards declined to $166,623, but then increased to $207,440 in 2002, $211,446 in 2003, and $252,043 in 2004. In 2005, this figure reached $253,304, the highest on record. Average payments for physicians and surgeons followed the same trend, reaching $300,931 in 2005, while claims against hospitals paid an average of $216,746.
Factors associated with rising payments continued to exert upward pressure on claim costs. Previous department analysis has shown that average awards are highly sensitive to medical inflation, the growth in real wages, and average injury severity.
Scale Severity Examples Temporary Injuries 1 Emotional only Fright, no physical damage 2 Insignificant Lacerations, contusions, minor scars, rash. No delay in recovery 3 Minor Infections, misset fracture, fall in hospital, recovery delayed 4 Major Burns, surgical material left, drug side effect, brain damage, recovery delayed Permanent Injuries 5 Minor Loss of fingers, loss or damage to organs. Includes nondisabling injuries 6 Significant Deafness, loss of limb, loss of eye, loss on one kidney or lung 7 Major Paraplegia, blindness, loss of two limbs, brain damage 8 Grave Quadriplegia, sever brain damage, life long care or fatal prognosis
9 Death
Average Injury Severity The injuries associated with medical malpractice claims are coded on a nine-point scale, with 1 representing minimal physical harm and 9 representing death:
By this scale, the average injury severity associated with paid claims increased in 2004 to 6.1, tying the historic high reached in 2002. Injury severity declined to 5.9 in 2005, but it’s too early to determine whether this represents a trend. For claims against physicians and surgeons, excluding nurses, dentists, other practitioners, and hospitals and clinics, average injury severity on paid claims reached a record high of 6.5 in 2004, dropping only one-tenth of a point to 6.4 in 2005. Injury severity category 6 represents “significant permanent” injuries, such as loss of limb or organ.
In 2004, the number of paid claims on non-permanent injuries (categories 1-4) declined from 189 to 165 and increased only slightly to 168 in 2005. Paid claims for deaths also declined between 2003 and 2005, from 178 to 124. Claims for permanent injuries, ranging from non-disabling injuries such as loss of fingers or damage to organs to severe or debilitating injuries including blindness, quadriplegia, loss of limb, or brain damage, increased from 172 to 189 between 2003 and 2004, and declined only slightly to 186 in
A-76 2005. Permanent injuries, especially those requiring extensive and perhaps life-long medical care, represent the most expensive category of claims.
Increases in average injury severity are apparent over many years, though the underlying causes of the trend are not well understood. Nevertheless, the trend undoubtedly plays a significant role in the increasing awards observed over the past several years. However, the average injury severity associated with currently pending new claims indicates that the trend may be diminishing. For all providers, average injury severity of reported claims has declined from a high of 6 in 2001, to 5.3 in 2004, and to 5.0 in 2005. However, how trends in reported claims might impact average injury severity levels of paid claims in the future is unknown. In addition, injury severities for some categories of providers, such as physicians and surgeons and hospitals, increased in 2005.
Inflationary Pressures Together, medical care and lost wages are the primary economic components of malpractice awards. These two factors have exerted a significant upward pressure on average awards in recent years. According to the Consumer Price Index (CPI) between 1999 and 2005, health care costs in Missouri have increased by an annual average of 4.4 percent, while average wages have increased by 3.2 percent. Both costs increased more rapidly than the overall rate of inflation, which grew by an annual average of 2.7 percent over the same time period. In 2005, health care costs increased by 4.2 percent, though average wages increased at a rate slightly less than the overall inflation rate of 3.3 percent.
CPI and Medical CPI – St. Louis-All Consumers
Annual Wages for MO* % Change from Prior Year
Average Average Annual CPI - Annual 1982- CPI - All Medical Wages All Medical Wages 1984=100 Goods CPI in MO Goods CPI in MO 1989 121.8 145.6 $20,900 1990 128.1 159 $21,716 5.2% 9.2% 3.9% 1991 132.1 171.7 $22,574 3.1% 8.0% 4.0% 1992 134.7 181 $23,550 2.0% 5.4% 4.3% 1993 137.5 191.5 $23,898 2.1% 5.8% 1.5% 1994 141.3 201.7 $24,628 2.8% 5.3% 3.1% 1995 145.2 210 $25,669 2.8% 4.1% 4.2% 1996 149.6 218.4 $26,609 3.0% 4.0% 3.7% 1997 152.9 226.4 $27,780 2.2% 3.7% 4.4% 1998 154.5 233.9 $28,907 1.0% 3.3% 4.1% 1999 157.6 245.7 $29,958 2.0% 5.0% 3.6% 2000 163.1 256.8 $31,384 3.5% 4.5% 4.8% 2001 167.3 268.2 $32,421 2.6% 4.4% 3.3% 2002 169.1 279.1 $33,118 1.1% 4.1% 2.1% 2003 173.4 ** $33,788 2.5% ** 2.0% 2004 180.3 307.4 $34,845 4.0% ** 3.1% 2005 186.2 320.2 $35,945 3.3% 4.2% 3.2%
A-77 *The CPI is published for major metropolitan areas. The CPI for St. Louis is used here. Average wages represent all of Missouri
**The Bureau of Labor Statistics did not publish the medical CPI for St. Louis in 2003 due to data limitations.
Source: Bureau of Labor Statistics
For the licensed market, both claim payments and incurred claim costs declined in 2005. Claim payments made in 2005, typically for claims opened in prior years, decreased by 31.4 percent to $77.6 million. Claim costs incurred in 2005, representing primarily insurers’ expectations of future payouts on pending claims, declined by 15.2 percent to $88.6 million. Earned premium declined by a more modest 5.2 percent.
For physicians and surgeons, excluding other practitioners such as dentists, nurses, and clinics and hospitals, paid claims declined from $81.1 million to $49.8 million in 2005, while incurred claims declined from $91.2 million to $77.2 million.
The most prevalent of alleged medical errors leading to a malpractice payment are those associated with surgery, delivery, and diagnosis. Beginning in 2004, the Department adopted the “error and omission” codes used by the National Practitioner Databank (NPDB). Errors are grouped into several broad categories. In descending order of prevalence of paid claims for all providers for 2005, the most significant categories are error/improper performance (46.9%), failure to treat (21.1%), delay in performance (4.4%), improper/illegal behavior (1.9%), communication and supervision (1.3%), unnecessary procedure / treatment (0.4%), and continuity of care (0.4%).
Diagnosis-related failures were the most common identifiable allegation. Together, failure to diagnose, or delayed or incorrect diagnosis accounted for 17.5% of claims. Delivery complications, such as failure to identify or treat fetal distress, are associated with 5.3% of paid claims. Significant surgical failures, such as operating on the wrong body part or wrong patient, or the retention of foreign objects in the patient after surgery, accounted for 3.0% of paid claims.
Additional information is presented separately for physicians and surgeons and hospitals.
A-78 Section I Major Historical Trends
This section contains graphs depicting trends in the medical malpractice insurance for:
• All medical care providers • Physicians & Surgeons only • Hospitals only
The tables and graphs are further categorized by:
• Market Trends: Page Licensed and non-admitted premium 3 Analysis of carriers 4 Profitability 6 Historical premium and losses 11 Actual and inflation-adjusted premium earned 15 Actual and inflation-adjusted paid losses 16 Loss ratio for Missouri 17 Number of insurance writers in Missouri 18
• Frequency and Severity and Origin of Claims: Number of new claims reported to insurers 19 Number of new claims by month 20 Average injury severity of new claims reported to insurers 21 Number of closed claims 22 Average injury severity of closed claims 23 Average indemnity of closed claims 24 Average loss adjustment expense of closed claims 27 Claims by county jurisdiction 32 Allegation categories 41
• Claim Disposition: Number of months for paid claims from incident to disposition 50 Number of months by injury severity from incident to disposition 51 Lawsuits filed by month 54 Percentage of closed claims after lawsuit filed 55 Percentage of closed claims in favor of the plaintiff after lawsuit filed 56 Percentage of court dispositions closed after judge/jury verdict 57
A-79
A-80 Medical Malpractice Insurance Licensed and Non-Admitted Premium, 1997-2005
Percent of Percent of Premium Written Premium Earned Year Market Written Market Earned Market 1997 Licensed $101,850,006 88.6% $101,923,637 89.1% Non-Admitted $13,130,298 11.4% $12,449,407 10.9% Total $114,980,304 $114,373,044
1998 Licensed $81,659,276 83.7% $88,559,722 86.0% Non-Admitted $15,870,718 16.3% $14,403,279 14.0% Total $97,529,994 $102,963,001
1999 Licensed $94,908,930 90.5% $93,676,069 88.2% Non-Admitted $10,010,000 9.5% $12,559,760 11.8% Total $104,918,930 $106,235,829
2000 Licensed $92,838,702 81.7% $91,969,348 84.8% Non-Admitted $20,739,467 18.3% $16,511,806 15.2% Total $113,578,169 $108,481,154
2001 Licensed $109,081,421 81.6% $97,027,590 81.3% Non-Admitted $24,602,498 18.4% $22,272,120 18.7% Total $133,683,919 $119,299,710
2002 Licensed $171,916,338 83.9% $156,106,364 85.2% Non-Admitted $33,103,146 16.1% $27,181,392 14.8% Total $205,019,484 $183,287,756
2003 Licensed $186,479,369 82.2% $169,970,363 81.4% Non-Admitted $40,481,669 17.8% $38,761,618 18.6% Total $226,961,038 $208,731,981
2004 Licensed $205,581,129 83.3% $202,933,059 83.4% Non-Admitted $41,074,434 16.7% $40,462,218 16.6% Total $246,655,563 $243,395,277
2005 Licensed $190,032,878 81.7% $192,382,331 82.7% Non-Admitted $42,471,266 18.3% $40,298,835 17.3% Total $232,504,144 $232,681,166
A-81 MARKET ANALYSIS 2003-2005 (0.1 percent of market or more for either year) All Medical Care Providers
2005 2003 2005 2003 LICENSED MARKET Market Market NON-ADMITTED MARKET Market Market Company Name Share Share Company Name Share Share MISSOURI PHYSICIANS MUTUAL 18.26% 8.32% COLUMBIA CASUALTY COMPANY 2.11% 1.79% MISSOURI HOSPITAL PLAN 14.17% 11.83% LEXINGTON INSURANCE COMPANY 1.87% 2.96% MEDICAL ASSURANCE CO INC THE 11.06% 14.22% EVEREST INDEMNITY INSURANCE COMPANY 1.69% -0.16% MEDICAL PROTECTIVE COMPANY 7.63% 14.16% EVANSTON INSURANCE COMPANY 1.52% 1.71% INTERMED INSURANCE COMPANY 4.40% 10.90% ST LUKES HEALTH SYSTEM RISK RETENTION GROUP 1.39% 0.77% PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 3.64% 0.41% ARCH SPECIALTY INSURANCE COMPANY 1.28% 1.29% HEALTH CARE INDEMNITY INC 3.50% 3.08% HUDSON SPECIALTY INSURANCE COMPANY 1.21% MEDICAL LIABILITY ALLIANCE 2.77% 1.65% PRINCETON EXCESS AND SURPLUS LINES INSURANCE 0.85% DOCTORS COMPANY AN INTERINS EXCHANGE 2.15% 4.35% ADMIRAL INSURANCE COMPANY 0.78% 0.08% PROFESSIONAL LIABILITY INSURANCE COMPANY OF A 1.84% STEADFAST INSURANCE COMPANY 0.74% 0.54% MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 1.50% OPHTHALMIC MUTUAL INS CO A RISK RETEN- 0.58% 0.49% AMERICAN CASUALTY CO OF READING PA 1.16% 0.79% LANDMARK AMERICAN INSURANCE COMPANY 0.48% 0.18% PREFERRED PHYSICIANS MEDICAL RRG INC 1.12% 0.76% EMERGENCY PHYSICIANS INSURANCE CO RRG 0.42% 0.14% NATIONAL UNION FIRE INSURANCE COMPANY OF PITT 1.10% 0.74% ESSENTIAL RISK RETENTION GROUP INC 0.40% PREFERRED PROFESSIONAL INSURANCE COMPANY 1.07% 0.88% HEALTH CARE INDUSTRY LIABILITY RECIPROCAL INS 0.38% KANSAS MEDICAL MUTUAL INS CO 1.05% 0.35% NATIONAL GUARDIAN RISK RETENTION GROUP INC 0.36% 0.26% CINCINNATI INS CO THE 0.76% 0.84% OMS NATIONAL INSURANCE COMPANY RRG 0.27% 0.21% PROFESSIONAL SOLUTIONS INSURANCE COMPANY 0.64% INTERSTATE FIRE & CASUALTY COMPANY 0.23% NCMIC INSURANCE COMPANY 0.60% 0.61% LANDMARK INSURANCE COMPANY 0.19% CONTINENTAL CASUALTY COMPANY 0.51% 0.11% OCEANUS INSURANCE COMPANY RRG 0.18% PODIATRY INSURANCE COMPANY OF AMERICA A MUTUA 0.40% 0.30% WESTERN WORLD INSURANCE COMPANY INC 0.18% 0.18% CHICAGO INSURANCE COMPANY 0.39% 2.19% NATIONAL FIRE AND MARINE INSURANCE CO 0.17% 0.06% FIRST SPECIALTY INSURANCE CORPORATION 0.38% 1.44% EMERGENCY MEDICINE RISK RETENTION GROUP INC 0.15% ACE AMERICAN INSURANCE COMPANY 0.27% 0.12% COMMUNITY BLOOD CENTERS EXCHANGE 0.13% 0.11% PACO ASSURANCE COMPANY INC 0.26% 0.00% HOMELAND INSURANCE COMPANY OF NEW YORK 0.10% ISMIE MUTUAL INSURANCE COMPANY 0.21% SYSTEMS PROTECTION ASSURANCE RISK RETENTION G 0.10% PHARMACISTS MUTUAL INSURANCE COMPANY 0.17% 0.16% TIG SPECIALTY INSURANCE CO 1.05% CHURCH MUTUAL INSURANCE COMPANY 0.14% 0.11% RED MOUNTAIN CASUALTY INSURANCE COMPANY INC 0.07% 0.75% MID CENTURY INSURANCE COMPANY 0.12% 2.89% EXECUTIVE RISK SPECIALTY INSURANCE CO 0.02% 0.71% EXECUTIVE RISK INDEMNITY INC 0.11% 0.16% GENERAL STAR INDEMNITY COMPANY 0.06% 0.52% DARWIN NATIONAL ASSURANCE COMPANY 0.10% PROFESSIONAL UNDERWRITERS LIABILITY INS 0.02% 0.46% TIG INSURANCE COMPANY 1.22% AMERICAN INTERNATIONAL SPECIALTY LINES -0.01% 0.40% TRUCK INSURANCE EXCHANGE 0.00% 0.94% ZURICH AMERICAN INSURANCE COMPANY 0.01% 0.47%
A-82 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0.35% AMCO INSURANCE COMPANY 0.28% GULF INSURANCE COMPANY 0.22% FORTRESS INSURANCE COMPANY 0.06% 0.18% MARKET ANALYSIS 2003-2005 (0.1 percent of market or more for either year) Physicians and Surgeons
2005 2003 LICENSED MARKET Market Market Company Name Share Share
MISSOURI PHYSICIANS MUTUAL 31.73% 13.82% MEDICAL ASSURANCE CO INC THE 18.30% 22.77% MEDICAL PROTECTIVE COMPANY 11.23% 21.72% INTERMED INSURANCE COMPANY 7.33% 16.77% PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 6.33% 0.69% MEDICAL LIABILITY ALLIANCE 4.73% 2.75% DOCTORS COMPANY AN INTERINS EXCHANGE 3.73% 7.24% PROFESSIONAL LIABILITY INSURANCE COMPANY OF A 3.20% MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 2.60% PREFERRED PHYSICIANS MEDICAL RRG INC 1.95% 1.26% PREFERRED PROFESSIONAL INSURANCE COMPANY 1.86% 1.47% KANSAS MEDICAL MUTUAL INS CO 1.82% 0.59% NATIONAL UNION FIRE INSURANCE COMPANY OF PITT 1.25% 0.00% PROFESSIONAL SOLUTIONS INSURANCE COMPANY 1.11% PODIATRY INSURANCE COMPANY OF AMERICA A MUTUA 0.69% 0.49% ACE AMERICAN INSURANCE COMPANY 0.48% PACO ASSURANCE COMPANY INC 0.45% 0.00% ISMIE MUTUAL INSURANCE COMPANY 0.37% CONTINENTAL CASUALTY COMPANY 0.34% 0.04% MID CENTURY INSURANCE COMPANY 0.21% 4.80% DARWIN NATIONAL ASSURANCE COMPANY 0.18% TRUCK INSURANCE EXCHANGE 0.00% 1.56% CHICAGO INSURANCE COMPANY 2.78% NCMIC INSURANCE COMPANY 0.00% 0.86% ZURICH AMERICAN INSURANCE COMPANY 0.02% 0.27%
Data is not available on physicians and surgeon coverage in the nonadmitted market.
A-83 Profitability estimates for 2005 are derived from the profitability formula developed by the National Association of Insurance Commissioners (NAIC). Though the formula may be slightly modified from time to time, it is unlikely that such modifications with have a significant or material impact on the estimates. Nevertheless, these estimates should be considered preliminary, and subject to future adjustment due to the refiling of financial information, formula adjustments, or other factors.
Definitions
Various expenses and revenues are reported as national aggregates on the financial annual statement filed by insurers. In addition, some general or fixed costs are not associated with a specific line of business. As a result, estimates of profitability for multistate and multiline companies are derived from a formula that allocates national aggregates to states and lines of business. Allocations are based on the proportion of premium or losses in a given line and state. The full formula can be found in the NAIC publication Profitability by Line by State.
The primary expense categories are:
Incurred Losses – Losses are an estimate of the amount that will eventually be paid out on all claims for losses that occurred during the reporting period. Incurred loss amounts include not only the losses associated with closed and pending claims, but also losses incurred during the year for which claims have yet to be reported to the insurer (generally called “Incurred But Not Reported,” or IBNR, and estimated from experience from prior years). Incurred losses are reported directly for each state and line of business.
Loss Adjustment Expense – Transaction costs associated with settling claims. This amount may reflect wages for adjusting staff, attorney fees and adjudications costs, cost containment programs, and other more general expenses. Expenses most directly tied to specific claims are reported by line and state. More general adjustment expenses are reported as national aggregates, and allocated to a state based on the NAIC formula.
Selling Expense – Costs of advertising, commissions, and other expenses associated with insurance sales. Direct commissions are reported by line and state, while more general costs are reported as national aggregates.
Premium Taxes and License Fees – State specific premium taxes and fees, reported by line by state.
General taxes – State and federal taxes on insurance operations. Taxes associated directly with insurance operations in a given year and those associated with other revenues (such as capital gains) are reported separately.
General Expense - An amorphous residual category that includes items not reported in the previous categories.
Revenue consists predominantly of premium and investment returns. Investment returns are reported separately for income associated directly with insurance operations during the reporting period, and returns associated with general surpluses.
Measures of Financial Performance
There are four primary indicators of financial performance used in this report:
Loss ratio: Incurred losses as a percent of premium earned, excluding expenses.
Underwriting Experience: Ratio of losses and insurer expenses to premium earned. This figure is based on Missouri specific expenses reported on the financial annual statement, and excludes investment returns and some taxes, as well as expense items not allocated to a specific line or state.
A-84 Underwriting Profit: Adjustment of Missouri underwriting experience based on allocating national expenses to a given line of business and state, based on the NAIC formula.
Profit on Insurance Transactions: Underwriting profit adjusted for investment returns and taxes.
Results
In 2005, malpractice operations in Missouri produced incurred losses equal to 49.2 percent of premium, declining slightly from the 2004 figure of 51.8 percent. Defense and loss adjustment expenses related to settling claims is the largest expense category for medical malpractice coverage. In 2005, such expenses equaled 31.3 percent of premium, compared to 20.7 percent in 2004. An addition 8 percent of premium was consumed by Missouri specific general, selling, and other administrative expenses. Thus, Missouri specific claims and underwriting expenses totaled 88.4 percent of premium in 2005, producing a figure for the underwriting experience column of 11.6 percent (or 100 – 88.4).
The final two columns indicate the profitability of Missouri’s malpractice market. The column labeled “underwriting profit” adjusts the “underwriting experience” column by adding various fixed or unallocated costs that are not reported on a state-by state basis. These costs include general expenses unrelated to a specific line of business (office costs, for example), or that are not directly associated with business in a single state. The final column, labeled “profit on insurance transactions,” reflects the net impact of taxes and investment returns on underwriting profit. In 2005, medical malpractice produced a return of 13.5 percent in excess of premiums, down somewhat from the 2004 figure of 17.2 percent.
A-85 Medical Malpractice Data from the Missouri State page of the Annual Statement Total Missouri Medical Malpractice Market (Including Excess and Surplus Lines Companies)
Defense & Cost Commission Containment and Written Premium Losses Expenses Brokerage Taxes and Year Premium Losses Paid Earned Incurred Incurred Dividends Expenses Fees 1997 114,980,304 57,110,081 114,373,041 55,318,604 14,466,185 1,128,542 6,946,027 1,478,808 1998 97,696,282 82,043,277 103,129,288 61,562,831 19,194,279 1,306,619 6,839,104 2,081,517 1999 104,918,930 70,849,555 106,235,830 77,022,920 36,844,208 1,776,696 7,991,868 2,056,213 2000 113,578,169 70,577,978 108,481,155 75,300,588 34,053,940 1,823,563 8,605,321 2,341,639 2001 133,683,918 86,746,132 119,299,711 102,470,355 30,464,650 2,075,802 11,841,017 2,732,369 2002 205,019,484 122,345,052 183,287,755 205,691,887 55,023,439 2,063,702 15,894,063 4,566,027 2003 226,961,038 93,591,127 208,731,982 189,698,276 70,810,826 125,396 13,027,522 2,937,927 2004 246,655,563 122,105,171 243,395,276 126,043,469 50,386,247 115,005 15,151,228 2,949,333 2005 232,504,144 88,220,490 232,681,164 114,389,130 72,735,714 5,031,321 11,025,955 2,443,051
Profitability – Total Missouri Medical Malpractice market (Including Excess and Surplus Lines Companies)
Data from the Missouri State Page of the Financial Figures reported in the Annual Statement NAIC Profitability Report*
Defense & Other Profit on Adjustment Underwriting Underwriting Underwriting Insurance Year Loss Ratio Costs Expenses Experience Profit Transactions 1997 48.4% 12.6% 8.4% 30.6% 16.0% 30.9% 1998 59.7% 18.6% 9.9% 11.8% -6.4% 17.5% 1999 72.5% 34.7% 11.1% -18.3% -34.9% -7.0% 2000 69.4% 31.4% 11.8% -12.6% -28.1% 1.5% 2001 85.9% 25.5% 14.0% -25.4% -39.1% -10.7% 2002 112.2% 30.0% 12.3% -54.5% -67.7% -36.5% 2003 90.9% 33.9% 7.7% -32.5% -44.2% -18.2% 2004 51.8% 20.7% 7.5% 20.0% 9.7% 17.2% 2005 49.2% 31.3% 8.0% 11.6% N/A N/A
*National Association of Insurance Commissioners, Report on Profitability by Line by State, annual volumes from 1997 to 2004.
A-86 Licensed Market Medical Malpractice Data from the Financial Annual Statement
Defense & Cost Commission Containment and Written Premium Losses Expenses Brokerage Taxes and Year Premium Losses Paid Earned Incurred Incurred Dividends Expenses Fees 1992 103,001,597 59,795,697 96,442,626 51,173,269 20,575,435 1,783,167 4,175,617 1,460,375 1993 112,575,838 52,560,910 101,049,703 56,993,496 14,160,953 2,252,443 4,752,690 1,809,738 1994 121,897,709 52,653,681 117,860,641 65,650,025 25,506,918 2,386,265 6,324,164 1,998,841 1995 118,102,391 63,304,067 122,127,759 62,327,413 32,020,665 1,924,043 6,108,041 2,340,564 1996 117,768,207 76,913,780 123,074,534 117,560,159 35,579,287 1,215,216 6,247,735 2,466,542 1997 101,850,006 55,287,688 101,923,634 54,273,806 12,487,759 1,113,351 5,980,038 1,445,491 1998 81,825,564 70,662,769 88,726,009 48,377,778 19,040,801 1,295,442 5,388,405 2,007,299 1999 94,908,930 64,440,159 93,676,070 68,353,075 34,866,139 1,751,359 6,930,847 1,951,921 2000 92,838,702 63,822,268 91,969,349 65,056,683 29,395,964 1,765,029 6,036,540 2,232,929 2001 109,081,420 76,730,820 97,027,591 79,038,068 25,505,859 2,032,104 9,442,445 2,583,310 2002 171,916,338 108,669,530 156,106,363 167,928,367 43,358,216 2,026,706 13,265,133 4,307,119 2003 186,479,369 83,749,882 169,970,364 164,309,442 63,162,582 125,396 10,516,274 2,937,402 2004 205,581,129 110,138,156 202,933,058 100,898,891 45,574,802 115,005 12,195,515 2,748,213 2005 190,032,878 77,579,894 192,382,329 88,557,355 67,086,045 4,973,045 7,861,996 2,238,778
% of Written Premium % of Earned Premium
Defense & Cost Direct Direct Containment Other Losses Losses Expenses Underwriting Underwriting Year Paid Incurred Incurred Expenses Results 1992 58.05% 53.06% 21.33% 7.69% 82.09% 1993 46.69% 56.40% 14.01% 8.72% 79.14% 1994 43.19% 55.70% 21.64% 9.09% 86.43% 1995 53.60% 51.03% 26.22% 8.49% 85.75% 1996 65.31% 95.52% 28.91% 8.07% 132.50% 1997 54.28% 53.25% 12.25% 8.38% 73.88% 1998 86.36% 54.52% 21.46% 9.80% 85.78% 1999 67.90% 72.97% 37.22% 11.35% 121.54% 2000 68.75% 70.74% 31.96% 10.91% 113.61% 2001 70.34% 81.46% 26.29% 14.49% 122.24% 2002 63.21% 107.57% 27.77% 12.55% 147.90% 2003 44.91% 96.67% 37.16% 7.99% 141.82% 2004 53.57% 49.72% 22.46% 7.42% 79.60% 2005 40.82% 46.03% 34.87% 7.84% 88.74%
A-87 Excess/Surplus Lines Market Medical Malpractice Data from the Financial Annual Statement
Defense & Cost Commission Containment and Written Premium Losses Expenses Brokerage Taxes and Year Premium Losses Paid Earned Incurred Incurred Dividends Expenses Fees 1997 13,130,298 1,822,393 12,449,407 1,044,798 1,978,426 15,191 965,989 33,317 1998 15,870,718 11,380,508 14,403,279 13,185,053 153,478 11,177 1,450,699 74,218 1999 10,010,000 6,409,396 12,559,760 8,669,845 1,978,069 25,337 1,061,021 104,292 2000 20,739,467 6,755,710 16,511,806 10,243,905 4,657,976 58,534 2,568,781 108,710 2001 24,602,498 10,015,312 22,272,120 23,432,287 4,958,791 43,698 2,398,572 149,059 2002 33,103,146 13,675,522 27,181,392 37,763,520 11,665,223 36,996 2,628,930 258,908 2003 40,481,669 9,841,245 38,761,618 25,388,834 7,648,244 0 2,511,248 525 2004 41,074,434 11,967,015 40,462,218 25,144,578 4,811,445 0 2,955,713 201,120 2005 42,471,266 10,640,596 40,298,835 25,831,775 5,649,669 58,276 3,163,959 204,273
% of Written Premium % of Earned Premium
Defense & Cost Direct Direct Containment Other Losses Losses Expenses Underwriting Underwriting Year Paid Incurred Incurred Expenses Results 1997 13.88% 8.39% 15.89% 8.15% 32.43% 1998 71.71% 91.54% 1.07% 10.66% 103.27% 1999 64.03% 69.03% 15.75% 9.48% 94.26% 2000 32.57% 62.04% 28.21% 16.57% 106.82% 2001 40.71% 105.21% 22.26% 11.63% 139.11% 2002 41.31% 138.93% 42.92% 10.76% 192.61% 2003 24.31% 65.50% 19.73% 6.48% 91.71% 2004 29.13% 62.14% 11.89% 7.80% 81.84% 2005 25.05% 64.10% 14.02% 8.50% 86.62%
A-88 MEDICAL MALPRACTICE FINANCIAL RESULTS
LICENSED MEDICAL MALPRACTICE MARKET % OF CASH CHANGE DIRECT DIRECT FLOW DIRECT DIRECT IN DIRECT PREMIUM LOSSES LOSS PREMIUM LOSSES LOSS PREMIUM YEAR WRITTEN PAID RATIO EARNED INCURRED RATIO WRITTEN
1991 $103,479,443 $60,144,210 58.12% $108,788,193 $57,589,693 52.94% -14.78% 1992 $95,879,384 $26,230,211 27.36% $85,507,277 $43,621,430 51.01% -7.34% 1993 $112,575,838 $52,571,123 46.70% $101,049,704 $57,543,001 56.95% 17.41% 1994 $121,896,709 $52,653,682 43.20% $117,860,545 $65,449,209 55.53% 8.28% 1995 $118,194,985 $62,853,046 53.18% $122,240,889 $61,756,820 50.52% -3.04% 1996 $118,095,604 $76,913,780 65.13% $123,401,931 $117,608,550 95.31% -0.08% 1997 $101,850,006 $55,287,687 54.28% $101,923,637 $54,273,811 53.25% -13.76% 1998 $81,659,276 $70,653,953 86.52% $88,559,722 $48,185,927 54.41% -19.82% 1999 $94,908,930 $63,975,010 67.41% $93,676,069 $68,353,073 72.97% 16.23% 2000 $92,838,702 $63,822,270 68.75% $91,969,348 $65,056,683 70.74% -2.18% 2001 $109,081,421 $76,730,820 70.34% $97,027,590 $79,027,069 81.45% 17.50% 2002 $171,916,338 $108,669,530 63.21% $156,106,364 $167,928,369 107.57% 57.60% 2003 $186,479,369 $83,749,885 44.91% $169,970,363 $164,309,442 96.67% 8.47% 2004 $205,581,129 $110,138,156 53.57% $202,933,059 $100,898,894 49.72% 10.24% 2005 $190,032,878 $77,579,894 40.82% $192,382,331 $88,557,355 46.03% -7.56%
NON-ADMITTED MEDICAL MALPRACTICE MARKET* % OF CASH CHANGE DIRECT DIRECT FLOW DIRECT DIRECT IN DIRECT PREMIUM LOSSES LOSS PREMIUM LOSSES LOSS PREMIUM YEAR WRITTEN PAID RATIO EARNED INCURRED RATIO WRITTEN
1997 $13,130,298 $1,822,393 13.88% $12,449,407 $1,044,798 8.39% N/A 1998 $15,870,718 $11,380,508 71.71% $14,403,279 $13,185,053 91.54% 20.87% 1999 $10,010,000 $6,409,396 64.03% $12,559,760 $8,669,845 69.03% -36.93% 2000 $20,739,467 $6,755,710 32.57% $16,511,806 $10,243,905 62.04% 107.19% 2001 $24,602,498 $10,015,312 40.71% $22,272,120 $23,432,287 105.21% 18.63% 2002 $33,103,146 $13,675,522 41.31% $27,181,392 $37,763,520 138.93% 34.55% 2003 $40,481,669 $9,841,245 24.31% $38,761,618 $25,388,834 65.50% 22.29% 2004 $41,074,434 $11,967,015 29.13% $40,462,218 $25,144,578 62.14% 1.46% 2005 $42,471,266 $10,640,596 25.05% $40,298,835 $25,831,775 64.10% 3.40% *The remaining years of data have been archived by the National Association of Insurance Commissioners not readily available.
MISSOURI LOSS RATIOS OF LICENSED MARKET - FIVE YEAR AVERAGES
LINE 1994-1998 1995-1999 1996-2000 1997-2001 1998-2002 1999-2003 2000-2004 2001-2005 Physicians 72.7% 75.9% 84.6% 72.0% 87.2% 89.2% 85.4% 77.5% Dentists 21.1% 13.7% 18.8% 18.9% 26.2% 16.1% 10.3% 13.1% Nurses -8.4% -29.5% -11.0% 26.8% 33.9% 32.8% 43.4% 8.3% Hospitals 52.8% 49.0% 40.3% 51.4% 67.3% 77.9% 67.0% 67.8% Other 36.7% 55.2% 60.7% 78.3% 90.9% 157.6% 102.4% 76.4% Total 62.7% 66.1% 70.8% 66.6% 81.3% 89.5% 80.4% 81.4%
A-89 MEDICAL MALPRACTICE FINANCIAL RESULTS
LICENSED MEDICAL MALPRACTICE MARKET - PHYSICIANS & SURGEONS % OF CASH CHANGE DIRECT DIRECT FLOW DIRECT DIRECT IN DIRECT PREMIUM LOSSES LOSS PREMIUM LOSSES LOSS PREMIUM YEAR WRITTEN PAID RATIO EARNED INCURRED RATIO WRITTEN
1991 $70,186,856 $47,863,151 68.19% $75,118,506 $50,677,766 67.46% -16.61% 1992 $69,085,300 $43,670,444 63.21% $63,764,526 $41,818,995 65.58% -1.57% 1993 $81,386,126 $38,080,181 46.79% $68,982,827 $45,651,292 66.18% 17.81% 1994 $86,565,579 $41,893,870 48.40% $83,088,562 $42,955,660 51.70% 6.36% 1995 $83,826,962 $50,848,450 60.66% $88,245,253 $51,227,401 58.05% -3.16% 1996 $77,903,125 $60,925,814 78.21% $83,119,750 $94,193,143 113.32% -7.07% 1997 $62,780,784 $44,893,158 71.51% $63,904,882 $39,240,977 61.41% -19.41% 1998 $55,760,257 $50,609,999 90.76% $57,215,107 $45,501,593 79.53% -11.18% 1999 $64,853,222 $43,998,372 67.84% $63,998,070 $40,408,719 63.14% 16.31% 2000 $61,518,461 $46,389,410 75.41% $62,776,133 $60,727,760 96.74% -5.14% 2001 $77,092,452 $53,869,948 69.88% $67,579,007 $41,141,286 60.88% 25.32% 2002 $114,887,033 $79,431,185 69.14% $104,672,745 $122,930,348 117.44% 49.03% 2003 $136,418,623 $52,870,665 38.76% $121,324,955 $109,538,169 90.28% 18.74% 2004 $142,627,100 $81,076,868 56.85% $142,262,082 $91,237,441 64.13% 4.55% 2005 $133,799,432 $49,802,894 37.22% $134,869,365 $77,185,727 57.23% -6.19%
LICENSED MEDICAL MALPRACTICE MARKET - DENTISTS % OF CASH CHANGE DIRECT DIRECT FLOW DIRECT DIRECT IN DIRECT PREMIUM LOSSES LOSS PREMIUM LOSSES LOSS PREMIUM YEAR WRITTEN PAID RATIO EARNED INCURRED RATIO WRITTEN
1991 $3,617,179 $1,140,249 31.52% $3,775,879 $1,072,613 28.41% -11.94% 1992 $3,582,006 $1,499,906 41.87% $3,437,765 $638,205 18.56% -0.97% 1993 $3,668,551 $1,193,172 32.52% $3,501,425 $2,936,584 83.87% 2.42% 1994 $3,894,691 $1,473,996 37.85% $3,915,404 $823,366 21.03% 6.16% 1995 $3,828,876 $1,456,855 38.05% $3,727,901 -$389,166 -10.44% -1.69% 1996 $3,691,741 $961,741 26.05% $3,623,282 $1,182,304 32.63% -3.58% 1997 $3,620,053 $1,506,555 41.62% $3,729,611 $1,683,415 45.14% -1.94% 1998 $3,387,756 $1,454,934 42.95% $3,310,636 $567,272 17.13% -6.42% 1999 $2,920,816 $683,189 23.39% $3,164,122 -$638,500 -20.18% -13.78% 2000 $3,232,321 $696,834 21.56% $2,724,126 $313,442 11.51% 10.66% 2001 $3,686,464 $302,962 8.22% $3,308,117 $1,150,895 34.79% 14.05% 2002 $4,458,209 $2,443,938 54.82% $4,336,659 $3,014,033 69.50% 20.93% 2003 $6,830,040 $1,457,855 21.34% $6,462,928 -$630,815 -9.76% 53.20% 2004 $4,439,569 $347,940 7.84% $4,635,168 -$1,642,942 -35.45% -35.00% 2005 $4,870,943 $809,022 16.61% $4,801,966 $1,195,919 24.90% 9.72%
A-90 MEDICAL MALPRACTICE FINANCIAL RESULTS
LICENSED MEDICAL MALPRACTICE MARKET - NURSES % OF CASH CHANGE DIRECT DIRECT FLOW DIRECT DIRECT IN DIRECT PREMIUM LOSSES LOSS PREMIUM LOSSES LOSS PREMIUM YEAR WRITTEN PAID RATIO EARNED INCURRED RATIO WRITTEN
1991 $1,419,653 $594,628 41.89% $1,366,747 -$1,265,745 -92.61% 8.73% 1992 $1,683,146 $440,813 26.19% $1,598,772 $832,658 52.08% 18.56% 1993 $1,232,602 $668,092 54.20% $1,243,103 -$274,547 -22.09% -26.77% 1994 $1,106,020 $78,312 7.08% $1,180,510 $1,158,170 98.11% -10.27% 1995 $528,556 $10,000 1.89% $440,246 $127,213 28.90% -52.21% 1996 $1,330,065 $239,635 18.02% $1,350,429 -$1,249,275 -92.51% 151.64% 1997 $1,430,588 $29,794 2.08% $1,073,768 -$580,638 -54.07% 7.56% 1998 $518,436 $15,750 3.04% $685,261 $145,484 21.23% -63.76% 1999 $701,196 $277,500 39.58% $795,615 $275,506 34.63% 35.25% 2000 $492,661 $999 0.20% $419,531 $933,815 222.59% -29.74% 2001 $541,382 $795,000 146.85% $515,088 $159,655 31.00% 9.89% 2002 $520,559 $1,250 0.24% $644,834 -$475,689 -73.77% -3.85% 2003 $535,407 $0 0.00% $519,272 $57,165 11.01% 2.85% 2004 $581,243 $345,000 59.36% $585,759 $490,327 83.71% 8.56% 2005 $413,075 $0 0.00% $432,944 -$8,469 -1.96% -28.93%
LICENSED MEDICAL MALPRACTICE MARKET - HOSPITALS % OF CASH CHANGE DIRECT DIRECT FLOW DIRECT DIRECT IN DIRECT PREMIUM LOSSES LOSS PREMIUM LOSSES LOSS PREMIUM YEAR WRITTEN PAID RATIO EARNED INCURRED RATIO WRITTEN
1991 $21,789,881 $7,971,562 36.58% $21,816,890 $6,348,493 29.10% -12.92% 1992 $20,523,195 $12,614,263 61.46% $20,474,042 $1,739,831 8.50% -5.81% 1993 $19,304,271 $8,669,009 44.91% $20,140,700 $4,687,981 23.28% -5.94% 1994 $19,734,229 $4,282,706 21.70% $20,439,547 $17,390,601 85.08% 2.23% 1995 $17,393,352 $7,023,734 40.38% $17,964,409 $5,512,291 30.68% -11.86% 1996 $17,267,056 $9,077,866 52.57% $18,681,963 $17,092,106 91.49% -0.73% 1997 $15,248,580 $3,143,280 20.61% $13,199,320 $1,974,721 14.96% -11.69% 1998 $12,555,794 $8,428,222 67.13% $14,604,144 $2,875,637 19.69% -17.66% 1999 $16,948,592 $12,870,063 75.94% $17,606,187 $12,774,561 72.56% 34.99% 2000 $29,795,347 $12,437,665 41.74% $28,200,480 $2,462,571 8.73% 75.80% 2001 $17,016,926 $12,078,108 70.98% $16,318,434 $26,157,360 160.29% -42.89% 2002 $34,124,626 $19,174,786 56.19% $29,340,028 $27,119,153 92.43% 100.53% 2003 $31,902,636 $19,299,000 60.49% $27,781,676 $24,359,179 87.68% -6.51% 2004 $47,899,466 $20,485,670 42.77% $44,450,629 $17,843,473 40.14% 50.14% 2005 $42,269,475 $8,873,832 20.99% $42,048,640 $12,887,534 30.65% -11.75%
A-91 MEDICAL MALPRACTICE FINANCIAL RESULTS
LICENSED MEDICAL MALPRACTICE MARKET - OTHER % OF CASH CHANGE DIRECT DIRECT FLOW DIRECT DIRECT IN DIRECT PREMIUM LOSSES LOSS PREMIUM LOSSES LOSS PREMIUM YEAR WRITTEN PAID RATIO EARNED INCURRED RATIO WRITTEN
1991 $6,465,874 $2,574,620 39.82% $6,710,171 $756,566 11.27% -5.17% 1992 $8,127,949 $1,570,271 19.32% $7,167,520 $5,942,088 82.90% 25.71% 1993 $6,984,288 $3,960,669 56.71% $7,181,649 $4,541,691 63.24% -14.07% 1994 $10,596,190 $4,924,798 46.48% $9,236,522 $3,121,412 33.79% 51.71% 1995 $12,617,239 $3,514,007 27.85% $11,863,080 $5,279,081 44.50% 19.07% 1996 $17,903,617 $5,708,724 31.89% $16,626,507 $6,390,272 38.43% 41.90% 1997 $18,770,001 $5,714,900 30.45% $20,016,056 $11,955,336 59.73% 4.84% 1998 $9,437,033 $10,145,048 107.50% $12,744,574 -$904,059 -7.09% -49.72% 1999 $9,485,104 $6,145,886 64.80% $8,112,075 $15,532,787 191.48% 0.51% - 2000 -$2,200,088 $4,297,362 195.33% -$2,150,922 $619,095 -28.78% -123.20% 2001 $10,744,197 $9,684,802 90.14% $9,306,944 $10,417,873 111.94% -588.35% 2002 $17,925,911 $7,618,371 42.50% $17,112,098 $15,340,524 89.65% 66.84% 2003 $10,792,663 $10,122,365 93.79% $13,881,532 $30,997,616 223.30% -39.79% 2004 $10,033,751 $7,882,678 71.66% $10,999,421 -$7,029,405 -63.91% -7.03% 2005 $8,679,953 $18,094,146 208.46% $10,229,416 -$2,703,356 -26.43% -13.49%
A-92 Medical Malpractice Actual and Inflation Adjusted Premium Earned All Insured Medical Care Providers
$225 $208.1 $205 $192.4 $177.9 $185 $202.9 $166.2 $192.4 $155.9 $165 $153.6 $154.6 $150.8 $170.0 $135.6 $145 $156.1 $118.0 $121.2 Millions $125 $108.4 $104.0 $102.3 $104.4 $123.4 $105 $117.9 $122.2 $108.8 $101.9 $85 $101.0 $97.0 $93.7 $92.0 $85.5 $88.6 $65 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Actual Dollars Inflation Adjusted Dollars
Physicians and Surgeons
$160 $145.9 $134.9 $135 $127.0 $142.3 $112.5 $111.5 $134.9 $106.1 $109.0 $101.6 $110 $121.3 $92.6 $88.0 $104.7 $85 $76.0 $74.1 $72.7 Millions $69.8 $88.2 $67.2 $83.1 $83.1 $75.1 $60 $69.0 $67.6 $63.8 $63.9 $64.0 $62.8 $57.2 $35 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Actual Dollars Inflation Adjusted Dollars
Hospitals
$55
$42.0 $45
$30.8 $31.4 $31.2 $42.0 $35 $29.1 $28.2 $27.0 $26.8 $28.5 $22.9 $22.8 $25 $20.4 Millions $28.2 $17.6 $29.3 $27.8 $27.8 $15.7 $17.1 $21.8 $20.5 $20.4 $15 $20.1 $18.7 $18.0 $17.6 $16.3 $13.2 $14.6 $5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Actual Dollars Inflation Adjusted Dollars
A-93 Medical Malpractice Actual and Inflation Adjusted Paid Losses All Insured Medical Care Providers
$125 $115.7 $112.9
$105 $94.0 $87.7 $110.1 $84.9 $83.0 $82.6 $108.7 $80.2 $77.6 $85 $70.5 $74.0 $71.0 $69.0 $65.8 $83.7 $65 $76.9 $76.7 $77.6 $70.7 Millions $64.0 $63.8 $60.1 $36.2 $62.9 $45 $52.6 $52.7 $55.3 $25 $26.2 $5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Actual Dollars Inflation Adjusted Dollars
Physicians and Surgeons
$84.6 $90 $83.1 $74.5 $67.6 $75 $64.8 $81.1 $60.3 $59.4 $58.0 $79.4 $54.9 $53.4 $55.3 $60 $51.1 $50.9 $51.6 $49.8 $60.9 $45 $53.9 $52.9 $50.8 $50.6 $49.8 Millions $47.9 $46.4 $43.7 $41.9 $44.9 $44.0 $30 $38.1
$15
$0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Actual Dollars Inflation Adjusted Dollars
Hospitals $25 $20.4 $20.2 $21.0 $20 $17.4 $14.9 $20.5 $13.8 $19.2 $19.3 $15 $13.0 $11.3 $11.6 $11.1 $9.9 $9.0 $8.9 $10 $12.6 $12.9 $12.4
Millions $12.1 $5.6 $9.1 $3.7 $8.9 $8.0 $8.7 $8.4 $5 $7.0 $4.3 $0 $3.1 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Actual Dollars Inflation Adjusted Dollars
A-94 Missouri Loss Ratio All Medical Care Providers
120.0% 107.6% 110.0% 95.3% 96.7% 100.0%
90.0% 81.5%
80.0% 73.0% 70.7% 70.0% Loss Ratio 57.0% 52.9% 55.5% 53.3% 54.4% 60.0% 51.0% 50.5% 49.8% 46.0% 50.0% 40.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Physicians & Surgeons
130.0% 117.4% 120.0% 113.3% 110.0% 96.7% 100.0% 90.3% 90.0% 79.5% 80.0% Loss Ratio 67.4% 65.6% 66.2% 64.1% 70.0% 61.4% 63.1% 60.9% 58.1% 57.2% 60.0% 51.7% 50.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Hospitals
180.0% 160.4% 160.0% 140.0% 120.0% 91.5% 92.4% 100.0% 85.1% 87.7% 72.6% 80.0%
Loss Ratio 60.0% 40.1% 30.7% 29.1% 23.3% 40.0% 15.0% 19.7% 8.5% 8.7% 20.0% 30.7% 0.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Loss Ratio = Incurred Losses / Earned Premium from Missouri Supplement
A-95 Companies Writing Medical Malpractice Insurance All Medical Care Providers
70 65 60 60 57 54 53 53 54 55 52 48 48 50 50 50 47 43 43 44 45 40 35 30 25 20 15 10
Companies with Premium Written Premium with Companies 5 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Physicians & Surgeons
40 35 32 32 29 30 30 27 27 25 26 25 25 22 21 21 21 22 20 17 15 10 5
Companies with Premium Written Premium with Companies 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Hospitals
30
25 20 20 16 17 16 17 16 17 14 15 15 13 13 13
10 7 8 7
5
Companies with Premium Written Premium with Companies 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
A-96 Claim Count Reported to Insurer
2,500 2,400 All Medical Care Providers 2,425 2,300 Physicians & Surgeons Hospitals 2,200 2,100 2,000 2,030 2,028 1,900 1,987 1,919 1,800 1,846 1,868 1,817 1,700 1,763 1,777 1,751 1,731 1,600 1,656 1,620 1,500 1,540 1,400 1,247 1,300 1,200 1,100 1,025 1,005 978 948 941 929 933
Number Claims of Reported 1,000 843 862 900 824 804 757 744 800 707 700 600 507 482 458 500 429 432 431 407 388 375 348 338 365 338 400 306 326 300 200 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 A-97 Year Reported to Insurer Claim Count by Month, 2003-2005 Reported to Insurer
All Providers
800 737 d 700 2005 2004 2003 600 500 400 270 253 300 149 159 148 142 165 200 204 106 195 91 117 181 88 164 145 161 139 133 143 100 127 105 120 Number of Claims Reporte 165 142 139 129 151 137 131 129 0 108 97 106 106 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Month Reported to Insurer
Physicians and Surgeons
500
d 450 407 400 2005 2004 2003 350 300 250 200 148 122 150 81 84 70 76 67 100 98 48 94 42 51 51 75 71 79 85 Number of Claims Reporte 50 63 63 62 64 53 55 30 35 33 31 33 30 31 24 20 24 0 17 18 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Month Reported to Insurer
Hospitals
100 90 90 d 80 2005 2004 2003 70 60 50 41 42 36 40 31 30 44 35 25 24 24 30 30 23 2233 31 33 30 31 35 36 19 32 3324 3024 20 17 27 20 18 Number of Claims Reporte 22 25 24 10 17 13 0 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Month Reported to Insurer
A-98 Average Injury Severity of Claims Reported to Insurer
6.3
All Medical Care Providers 6.0 Physicians & Surgeons 6.0 5.9 Hospitals 5.9 5.8
5.8 5.7 5.7 5.6 5.7 5.6 5.6 5.6 5.5 5.5 5.5 5.5 5.5 5.4 5.5 5.5 5.4 5.3 5.3 5.4 5.3 5.2 5.2 5.2 5.3 5.3 5.3 5.2 5.3 5.1 5.1 5.2
5.0 5.1 5.1
Average Severityof Injury 4.9 4.9 4.9 5.0 5.0 4.9
4.8 4.8 4.7
4.6 4.5
4.4
4.3 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A-99 Year Reported to Insurer Closed Claim Count All Medical Care Providers
2,500 2,400 Total Closed Claims 2,300 Closed With Payment 2,200 Closed Without Payment 2,100 1,975 2,000 1,929 1,945 1,871 1,890 1,844 1,900 1,810 1,727 1,800 1,707 1,699 1,655 1,675 1,669 1,700 1,617
1,600 1,506 1,500 1,359 1,400 1,331 1,313 1,323 1,321 1,300 1,218 1,234 1,221 1,188 1,164 1,158 1,200 1,116 1,115 1,131
Number of Claims Closed 1,100 998 1,000 900 800 653 662 700 622 570 576 576 559 539 554 539 600 511 508 523 459 478 500 400 300 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year A-100 Closed Claim Count Physicians & Surgeons
1,125 1,050 Total Closed Claims 1,075 1,029 1,001 Closed With Payment 1,025 977 990 955 Closed Without Payment 975 925 898
875 835 822 825 790 789 780 777 748 749 775 730 738 727 711 723 717 725 674 675 631 626 602 625 588 582 569 557 575 514 525 475
Number of Claims Closed 425 375 318 302 325 260 260 263 275 232 233 224 202 211 213 225 195 192 196 158 175 125 75 25 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year A-101 Closed Claim Count Hospitals
700
665 Total Closed Claims 630 Closed With Payment 595 Closed Without Payment 560 525 506 484 476 471 490 456 455 420 396 384 377 385 359 363 350 329 331 311 312 302 315 286 284 284 275 280 262 230 232 Number of Claims Closed 225 245 215 204 206 194 210 181 187 172 209 175 190 195 194 180 140 169 166 162 135 138 105 127 125 125 112 70 103 35
0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year A-102 Average Injury Severity of Closed Claims All Medical Care Providers
7.0
6.5 6.1 6.0 6.1 5.8 5.8 5.9 6.0 5.4 5.5 5.4 5.3 5.2 5.2 5.3 5.2 5.5 5.0 5.0 5.3 5.4 5.2 5.2 5.2 5.3 5.1 5.1 5.0 5.1 4.5 5.0 4.9 4.7 4.7 4.7
Average Injury Severity 4.0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Closed
Closed With Payment Closed Without Payment
Physicians and Surgeons
7.0 6.5 6.4 6.5 6.4 6.0 6.3 6.2 6.2 6.2 6.0 6.1 5.9 5.9 5.5 5.7 5.8 5.7 5.6 5.6 5.6 5.5 5.5 5.0 5.3 5.3 5.3 5.4 5.4 5.4 5.2 5.1 5.1 5.1 5.0 4.5 Average Injury Severity 4.0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Closed
Closed With Payment Closed Without Payment
Hospitals
6.5 5.9 5.8 5.9 6.0 5.7 5.5 5.5 5.3 5.3 5.3 5.5 5.1 5.1 5.0 5.1 5.0 4.9 5.5 5.0 5.1 5.0 5.1 5.0 4.9 4.9 4.9 4.5 4.8 4.7 4.7 4.4 4.0 4.2 4.3 4.3 Average Injury Severity 3.5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Closed
Closed With Payment Closed Without Payment
A-103 All Medical Care Providers Average Indemnity Paid
270,000 260,000 252,043 253,304 250,000 240,000 Paid Claims 230,000 All Closed Claims 220,000 211,446 208,557 207,440 210,000 200,000 190,000 180,000 167,791 164,240 166,623 170,000 160,806 160,000 146,461 150,000 143,910 140,000 130,508 131,364 124,233 125,924 130,000 120,000
Average Paid Indemnity 110,000 100,000 90,000 80,000 69,997 71,485 71,265 65,993 70,000 59,201 53,659 53,490 56,205 60,000 49,058 50,000 43,359 43,318 42,524 41,532 42,209 43,604 40,000 30,000 20,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year A-104 Physicians & Surgeons Average Indemnity Paid
315,000 305,000 295,000 Paid Claims 300,931 285,000 275,000 All Closed Claims 286,885 265,000 255,000 245,000 253,556 235,000 225,000 215,000 225,545 221,264 219,520 205,000 195,000 204,708 185,000 192,791 196,043 175,000 165,000 155,000 165,090 163,874 163,610 145,000 153,368 153,934 135,000 146,002 Average Paid Indemnity Average 125,000 115,000 105,000 95,000 85,000 71,561 71,755 75,000 62,937 64,997 65,000 58,134 55,092 57,438 49,296 55,000 45,120 43,610 44,274 44,259 40,106 40,278 40,993 45,000 35,000 25,000
A-105 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Hospitals Average Indemnity Paid
260,000 250,000 235,792 240,000 Paid Claims 230,000 All Closed Claims 216,746 220,000 205,433 210,000 200,000 192,663 186,276 190,000 180,533 183,204 180,000 170,106 171,279 170,000 155,838 160,000 150,000 143,549 140,000 126,262 127,828 130,000 124,516 120,000
Average Paid Indemnity Average 105,731 110,000 100,000 86,116 85,516 90,000 82,400 76,806 79,056 80,000 70,346 65,555 64,810 70,000 62,435 61,457 59,185 55,198 56,611 60,000 49,702 45,433 50,000 40,000 30,000
A-106 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Loss Adjustment Expense All Medical Care Providers
60,000 57,579 57,500 Total Closed Claims 55,000 Closed With Payment 52,500 Closed Without Payment 50,000 47,023 47,500
45,000 42,421 42,500 40,000 37,500 35,000 33,173 31,027 32,500 29,974 30,301 29,822 30,000 27,500
25,000 23,374 22,708 22,385 21,744 22,146 22,500 20,665 20,751
Average Amount Paid in LAE Average Amount 19,485 18,775 20,000 17,897 21,386 17,169 16,465 16,438 17,500 15,805 14,056 13,502 15,000 13,19917,097 13,036 12,668 12,500 10,615 9,660 13,558 8,526 12,408 10,000 11,429 10,189 7,500 9,461 9,423 8,449 8,640 8,652 9,009 5,000 5,832 6,400 2,500 0
A-107 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Loss Adjustment Expense Physicians & Surgeons
58,000 54,793 55,051 55,500 Total Closed Claims 53,000 Closed With Payment 50,500 Closed Without Payment 48,000 45,500 43,000 40,500 38,267 37,784 38,000 35,780 35,500 32,746 33,000 30,888 34,211 30,500 27,126 28,000 24,152 25,500 23,078 22,548 25,895 23,000 21,550 Average Amount Paid in LAE Average Amount 22,033 23,092 20,390 19,620 19,409 19,375 19,164 20,500 18,344 18,111 18,000 14,966 14,326 14,716 17,932 15,500 13,531 12,568 13,000 11,321 15,419 15,085 10,324 14,477 13,027 10,500 9,210 11,247 10,514 10,571 8,000 10,129 10,496 9,013 7,612 5,500 6,922 7,341 3,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 A-108 Year Loss Adjustment Expense Hospitals
130,000 125,000 120,310 120,000 Total Closed Claims 115,000 Closed With Payment 110,000 Closed Without Payment 105,000 100,000 95,000 90,000 82,767 85,000 80,000 75,000 70,000 65,000 60,000 55,000 44,858 50,000 55,671 45,000 38,238 Average Amount Paid in LAE Average Amount 40,000 36,647 33,929 35,000 31,856 30,000 26,894 26,809 25,196 24,005 22,600 23,458 23,260 25,000 21,174 19,973 20,320 18,870 18,372 18,858 19,111 16,790 16,746 16,806 20,000 14,317 15,071 15,626 12,243 13,212 15,000 9,218 10,000 14,063 11,338 11,223 11,797 5,000 9,685 8,957 9,579 10,193 10,013 7,301 8,387 8,470 5,749 0 4,187 (5,000) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A-109 Year Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period 1991-2005
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 001 ADAIR 61 23 $6,119,041 $266,045 003 ANDREW 5 4 $348,559 $87,140 005 ATCHISON 3 1 $15,000 $15,000 007 AUDRAIN 40 5 $1,459,000 $291,800 009 BARRY 17 9 $962,333 $106,926 011 BARTON 20 5 $335,000 $67,000 013 BATES 12 1 $5,000 $5,000 015 BENTON 1 1 $27,000 $27,000 019 BOONE 670 167 $27,160,525 $162,638 021 BUCHANAN 434 152 $31,629,970 $208,092 023 BUTLER 130 42 $5,225,588 $124,419 027 CALLAWAY 25 12 $2,199,000 $183,250 029 CAMDEN 86 26 $2,258,145 $86,852 031 CAPE GIRARDEAU 305 80 $15,698,760 $196,235 033 CARROLL 1 0 $0 $0 035 CARTER 3 2 $45,000 $22,500 037 CASS 40 23 $5,486,981 $238,564 039 CEDAR 11 3 $76,000 $25,333 041 CHARITON 1 0 $0 $0 043 CHRISTIAN 6 3 $618,283 $206,094 045 CLARK 2 1 $50,000 $50,000 047 CLAY 568 184 $28,305,056 $153,832 049 CLINTON 12 5 $677,752 $135,550 051 COLE 255 74 $11,188,385 $151,194 053 COOPER 12 6 $346,750 $57,792 055 CRAWFORD 16 10 $2,038,233 $203,823 057 DADE 3 2 $520,000 $260,000 059 DALLAS 5 3 $1,505,000 $501,667 061 DAVIESS 1 1 $100,000 $100,000 065 DENT 16 6 $1,795,000 $299,167 067 DOUGLAS 5 3 $1,319,000 $439,667 069 DUNKLIN 29 15 $2,122,617 $141,508 071 FRANKLIN 61 14 $3,598,000 $257,000 073 GASCONADE 7 2 $92,500 $46,250 075 GENTRY 7 4 $943,750 $235,938 077 GREENE 924 303 $69,113,348 $228,097 079 GRUNDY 8 6 $877,500 $146,250 083 HENRY 38 14 $1,356,666 $96,905 087 HOLT 1 0 $0 $0 089 HOWARD 6 3 $109,460 $36,487 091 HOWELL 87 42 $7,954,563 $189,394 093 IRON 4 2 $384,466 $192,233 095 JACKSON 3,560 1,271 $257,901,703 $202,912 097 JASPER 435 170 $51,989,868 $305,823 099 JEFFERSON 181 50 $6,891,310 $137,826 101 JOHNSON 90 35 $7,984,499 $228,129 103 KNOX 5 3 $257,500 $85,833 105 LACLEDE 22 9 $1,252,500 $139,167 107 LAFAYETTE 4 0 $0 $0
A-110 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period 1991-2005
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 109 LAWRENCE 17 11 $701,542 $63,777 113 LINCOLN 18 3 $374,500 $124,833 115 LINN 17 6 $364,977 $60,830 117 LIVINGSTON 8 2 $453,640 $226,820 119 MCDONALD 4 2 $187,500 $93,750 121 MACON 10 5 $1,378,000 $275,600 123 MADISON 92 32 $6,476,385 $202,387 125 MARIES 5 3 $850,000 $283,333 127 MARION 56 13 $1,928,105 $148,316 129 MERCER 2 0 $0 $0 131 MILLER 4 0 $0 $0 141 MORGAN 1 1 $90,000 $90,000 143 NEW MADRID 18 7 $1,352,500 $193,214 145 NEWTON 97 44 $5,107,300 $116,075 147 NODAWAY 19 6 $338,750 $56,458 149 OREGON 3 2 $50,000 $25,000 151 OSAGE 3 2 $307,500 $153,750 155 PEMISCOT 1 0 $0 $0 157 PERRY 15 3 $229,500 $76,500 159 PETTIS 100 34 $5,003,775 $147,170 161 PHELPS 136 36 $6,100,593 $169,461 163 PIKE 18 5 $1,108,500 $221,700 165 PLATTE 61 24 $3,735,798 $155,658 167 POLK 41 16 $1,278,987 $79,937 169 PULASKI 29 10 $2,933,750 $293,375 171 PUTNAM 4 1 $17,500 $17,500 173 RALLS 4 0 $0 $0 175 RANDOLPH 38 17 $2,562,133 $150,714 177 RAY 6 3 $486,500 $162,167 179 REYNOLDS 6 2 $37,500 $18,750 181 RIPLEY 17 3 $265,000 $88,333 183 ST. CHARLES 319 74 $13,004,182 $175,732 186 STE. GENEVIEVE 6 3 $387,500 $129,167 187 ST. FRANCOIS 112 27 $4,601,051 $170,409 189 ST. LOUIS 2,909 737 $126,286,885 $171,353 195 SALINE 8 4 $432,500 $108,125 197 SCHUYLER 1 1 $100,000 $100,000 199 SCOTLAND 6 0 $0 $0 201 SCOTT 142 38 $6,728,906 $177,076 205 SHELBY 3 0 $0 $0 207 STODDARD 29 11 $2,192,424 $199,311 209 STONE 6 3 $262,500 $87,500 211 SULLIVAN 1 0 $0 $0 213 TANEY 79 25 $2,777,704 $111,108 215 TEXAS 19 6 $605,000 $100,833 217 VERNON 52 19 $3,883,019 $204,369 219 WARREN 5 3 $400,000 $133,333 221 WASHINGTON 11 2 $145,000 $72,500 223 WAYNE 12 6 $785,000 $130,833
A-111 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period 1991-2005
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 225 WEBSTER 8 0 $0 $0 227 WORTH 3 3 $705,000 $235,000 229 WRIGHT 9 2 $85,000 $42,500 510 ST. LOUIS CITY 3,255 1,069 $315,324,304 $294,971 900 APPELLATE COURT 596 240 $48,685,119 $202,855 901 FEDERAL COURT 904 172 $35,222,913 $204,784 902 GUARANTY FUND 371 144 $19,789,376 $137,426 903 OUT OF STATE 240 88 $30,386,968 $345,306 999 NOT AVAILABLE 81 24 $5,742,915 $239,288
A-112 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period -2005
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 001 ADAIR 6 3 $1,335,000 $445,000 007 AUDRAIN 2 0 $0 $0 013 BATES 1 0 $0 $0 019 BOONE 64 9 $1,555,846 $172,872 021 BUCHANAN 57 10 $2,810,000 $281,000 023 BUTLER 15 6 $839,500 $139,917 027 CALLAWAY 3 1 $5,000 $5,000 029 CAMDEN 13 4 $595,929 $148,982 031 CAPE GIRARDEAU 26 3 $562,500 $187,500 037 CASS 2 1 $145,000 $145,000 041 CHARITON 1 0 $0 $0 047 CLAY 33 7 $2,315,000 $330,714 049 CLINTON 1 0 $0 $0 051 COLE 16 4 $750,000 $187,500 055 CRAWFORD 4 3 $240,733 $80,244 057 DADE 1 1 $20,000 $20,000 069 DUNKLIN 1 0 $0 $0 071 FRANKLIN 4 2 $190,000 $95,000 077 GREENE 52 19 $6,149,000 $323,632 083 HENRY 1 0 $0 $0 091 HOWELL 8 2 $202,500 $101,250 095 JACKSON 257 98 $26,006,028 $265,368 097 JASPER 83 30 $12,157,472 $405,249 099 JEFFERSON 19 5 $385,500 $77,100 101 JOHNSON 4 4 $397,500 $99,375 109 LAWRENCE 1 1 $75,000 $75,000 115 LINN 1 0 $0 $0 119 MCDONALD 3 1 $37,500 $37,500 123 MADISON 7 3 $770,000 $256,667 127 MARION 13 4 $178,250 $44,563 141 MORGAN 1 1 $90,000 $90,000 143 NEW MADRID 1 0 $0 $0 145 NEWTON 7 2 $390,000 $195,000 147 NODAWAY 1 1 $28,750 $28,750 155 PEMISCOT 1 0 $0 $0 157 PERRY 1 0 $0 $0 159 PETTIS 4 2 $265,000 $132,500 161 PHELPS 4 2 $200,000 $100,000 165 PLATTE 7 3 $1,219,710 $406,570 167 POLK 1 0 $0 $0 169 PULASKI 1 0 $0 $0 171 PUTNAM 1 0 $0 $0 175 RANDOLPH 5 3 $194,500 $64,833 183 ST. CHARLES 30 6 $672,756 $112,126 187 ST. FRANCOIS 11 2 $475,000 $237,500 189 ST. LOUIS 224 55 $18,068,080 $328,511 195 SALINE 1 1 $350,000 $350,000 199 SCOTLAND 1 0 $0 $0 201 SCOTT 15 5 $574,000 $114,800 209 STONE 1 1 $150,000 $150,000
A-113 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period -2005
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 213 TANEY 3 0 $0 $0 217 VERNON 5 2 $40,000 $20,000 225 WEBSTER 1 0 $0 $0 510 ST. LOUIS CITY 215 69 $33,418,258 $484,323 900 APPELLATE COURT 7 2 $351,398 $175,699 901 FEDERAL COURT 128 12 $2,083,587 $173,632 903 OUT OF STATE 17 5 $1,200,000 $240,000 999 NOT AVAILABLE 1 0 $0 $0
A-114 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period -2004
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 001 ADAIR 5 1 $525,000 $525,000 007 AUDRAIN 5 2 $550,000 $275,000 009 BARRY 2 2 $333,333 $166,667 011 BARTON 1 0 $0 $0 013 BATES 6 0 $0 $0 019 BOONE 62 21 $7,294,500 $347,357 021 BUCHANAN 32 11 $4,576,000 $416,000 023 BUTLER 23 8 $1,843,088 $230,386 027 CALLAWAY 2 2 $1,300,000 $650,000 029 CAMDEN 9 4 $830,000 $207,500 031 CAPE GIRARDEAU 30 8 $1,717,500 $214,688 039 CEDAR 1 1 $28,500 $28,500 047 CLAY 29 7 $1,140,000 $162,857 051 COLE 23 7 $1,517,500 $216,786 053 COOPER 1 1 $28,000 $28,000 055 CRAWFORD 2 1 $135,000 $135,000 059 DALLAS 1 0 $0 $0 065 DENT 2 0 $0 $0 069 DUNKLIN 2 2 $210,000 $105,000 071 FRANKLIN 2 0 $0 $0 077 GREENE 41 13 $5,600,000 $430,769 083 HENRY 1 0 $0 $0 091 HOWELL 6 3 $465,000 $155,000 093 IRON 1 0 $0 $0 095 JACKSON 296 109 $27,257,129 $250,065 097 JASPER 63 29 $11,494,585 $396,365 099 JEFFERSON 19 4 $535,000 $133,750 101 JOHNSON 9 4 $1,550,000 $387,500 105 LACLEDE 4 0 $0 $0 109 LAWRENCE 2 1 $75,000 $75,000 113 LINCOLN 1 0 $0 $0 115 LINN 2 1 $42,277 $42,277 121 MACON 2 0 $0 $0 123 MADISON 4 1 $100,000 $100,000 127 MARION 1 0 $0 $0 129 MERCER 2 0 $0 $0 143 NEW MADRID 2 0 $0 $0 145 NEWTON 5 1 $34,500 $34,500 157 PERRY 2 0 $0 $0 159 PETTIS 2 0 $0 $0 161 PHELPS 13 8 $900,002 $112,500 163 PIKE 1 0 $0 $0 165 PLATTE 4 1 $37,500 $37,500 167 POLK 15 4 $505,496 $126,374 171 PUTNAM 2 0 $0 $0 175 RANDOLPH 4 2 $405,138 $202,569 177 RAY 1 1 $295,000 $295,000 183 ST. CHARLES 22 3 $259,500 $86,500 186 STE. GENEVIEVE 2 1 $200,000 $200,000
A-115 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period -2004
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 187 ST. FRANCOIS 14 4 $924,536 $231,134 189 ST. LOUIS 265 49 $11,235,058 $229,287 195 SALINE 1 1 $25,000 $25,000 201 SCOTT 17 2 $346,140 $173,070 207 STODDARD 3 1 $150,000 $150,000 213 TANEY 9 1 $2,400 $2,400 215 TEXAS 2 0 $0 $0 217 VERNON 6 5 $2,048,519 $409,704 219 WARREN 1 1 $150,000 $150,000 223 WAYNE 1 0 $0 $0 227 WORTH 2 2 $30,000 $15,000 510 ST. LOUIS CITY 207 68 $25,636,694 $377,010 900 APPELLATE COURT 13 2 $310,000 $155,000 901 FEDERAL COURT 132 19 $3,609,565 $189,977 903 OUT OF STATE 21 7 $8,861,500 $1,265,929
A-116 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period -2003
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 001 ADAIR 5 3 $296,000 $98,667 007 AUDRAIN 10 2 $890,000 $445,000 009 BARRY 2 2 $275,000 $137,500 013 BATES 1 0 $0 $0 019 BOONE 43 8 $1,212,355 $151,544 021 BUCHANAN 38 10 $2,906,238 $290,624 023 BUTLER 15 3 $460,000 $153,333 027 CALLAWAY 3 0 $0 $0 029 CAMDEN 5 2 $44,500 $22,250 031 CAPE GIRARDEAU 31 14 $4,229,992 $302,142 037 CASS 2 0 $0 $0 045 CLARK 2 1 $50,000 $50,000 047 CLAY 30 7 $1,255,000 $179,286 051 COLE 17 8 $1,252,500 $156,563 055 CRAWFORD 1 1 $380,000 $380,000 069 DUNKLIN 2 0 $0 $0 071 FRANKLIN 1 0 $0 $0 073 GASCONADE 1 0 $0 $0 077 GREENE 67 17 $6,459,504 $379,971 079 GRUNDY 1 0 $0 $0 087 HOLT 1 0 $0 $0 089 HOWARD 1 0 $0 $0 091 HOWELL 3 0 $0 $0 093 IRON 1 1 $140,180 $140,180 095 JACKSON 266 92 $18,643,434 $202,646 097 JASPER 50 17 $9,129,224 $537,013 099 JEFFERSON 7 3 $550,000 $183,333 101 JOHNSON 14 4 $152,500 $38,125 105 LACLEDE 2 2 $525,000 $262,500 109 LAWRENCE 1 1 $55,000 $55,000 117 LIVINGSTON 1 0 $0 $0 121 MACON 2 1 $300,000 $300,000 123 MADISON 7 1 $24,985 $24,985 127 MARION 4 2 $800,000 $400,000 131 MILLER 1 0 $0 $0 145 NEWTON 11 4 $292,500 $73,125 151 OSAGE 1 1 $7,500 $7,500 159 PETTIS 12 6 $2,944,250 $490,708 161 PHELPS 10 4 $416,508 $104,127 163 PIKE 1 0 $0 $0 165 PLATTE 5 2 $187,500 $93,750 167 POLK 7 2 $19,166 $9,583 169 PULASKI 2 1 $295,000 $295,000 175 RANDOLPH 4 3 $1,100,000 $366,667 183 ST. CHARLES 16 5 $760,000 $152,000 187 ST. FRANCOIS 9 4 $1,161,500 $290,375 189 ST. LOUIS 224 73 $17,144,351 $234,854 195 SALINE 1 0 $0 $0 199 SCOTLAND 4 0 $0 $0
A-117 Medical Malpractice Claims by County of Jurisdiction All Providers (Physicians, Hospitals, Dentists, etc) All Claims Closed During Period -2003
Average County Indemnity FIPS Total Claims Claims Closed Per Paid Code COUNTY Filed In Court With Payment Total Indemnity Claim 201 SCOTT 13 3 $630,000 $210,000 207 STODDARD 3 1 $125,000 $125,000 209 STONE 1 1 $12,500 $12,500 213 TANEY 17 6 $605,528 $100,921 215 TEXAS 2 1 $100,000 $100,000 217 VERNON 3 0 $0 $0 219 WARREN 2 2 $250,000 $125,000 221 WASHINGTON 1 0 $0 $0 229 WRIGHT 1 0 $0 $0 510 ST. LOUIS CITY 191 58 $20,183,107 $347,985 900 APPELLATE COURT 31 6 $2,595,000 $432,500 901 FEDERAL COURT 68 11 $3,540,846 $321,895 903 OUT OF STATE 21 6 $349,985 $58,331
A-118 ALL MEDICAL CARE PROVIDERS 2005 ALLEGATION CATEGORIES Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims FAILURE TO TAKE APPROPRIATE ACTION
100 Failure to Use Aseptic Tecnique 3 3 2 4 0 0 0 Failure to Diagnose (i.e. Concluding that patient has no 101 disease or condition worthy of follow-up or observation) 303 6 146 6 51 7 223,389 102 Failure to Delay Case when Indicated 1 5 0 0 0 0 0 103 Failure to Identify Fetal Distress 7 7 2 8 2 8 2,225,000 104 Failure to Treat Fetal Distress 7 7 6 7 4 8 153,750 105 Failure to Medicate 3 4 1 9 2 4 26,829 106 Failure to Monitor 80 6 22 7 20 6 154,688 107 Failure to Order Appropriate Medication 23 5 12 4 2 6 51,465 108 Failure to Order Appropriate Test 4 7 0 0 1 9 275,000 109 Failure to Perform Preoperative Evaluation 8 6 1 6 1 6 131,250 110 Failure to Perform Procedure 9 6 2 7 1 5 150,000 111 Failure to Perform Resuscitation 1 9 0 0 0 0 0 112 Failure to Recognize a Complication 15 7 1 9 2 6 121,250 113 Failure to Treat 107 6 80 4 15 6 226,917 Subtotal 571 6 275 5 101 6 236,739 DELAY IN PERFORMANCE
200 Delay in Diagnosis 58 6 25 7 10 8 197,600 201 Delay in Performance 34 7 2 7 3 8 545,833 202 Delay in Treatment 51 7 12 6 5 7 500,000 203 Delay in Treatment of Identified Fetal Distress 12 6 4 6 3 7 330,000 Subtotal 155 6 43 7 21 8 338,262 ERROR/IMPROPER PERFORMANCE
300 Administration of Blood or Fluid Problems 2 4 1 4 2 6 175,000 301 Agent Use or Selection Error 2 9 0 0 0 0 0 302 Complimentary or Alternative Medication Problem 4 5 0 0 0 0 0 303 Equipment Utilization Problem 3 4 1 5 0 0 0 304 Improper Choice of Delivery Method 16 7 1 6 2 6 390,000 A-119 305 Improper Management 182 6 103 5 36 6 223,983 306 Improper Performance 391 5 193 5 106 5 253,707 307 Improperly Performed C-Section 2 7 5 7 3 6 901,437 308 Improperly Performed Vaginal Delivery 12 5 5 5 12 7 497,917 ALL MEDICAL CARE PROVIDERS 2005 ALLEGATION CATEGORIES Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims 309 Improperly Performed Resuscitation 1 6 0 0 0 0 0 310 Improperly Performed Test 4 3 3 3 1 9 250,000 311 Improper Technique 21 4 8 5 7 6 374,973 312 Intubation Problem 3 5 3 8 0 0 0 314 Pathology Error 0 0 2 2 0 0 0 315 Medication Admininistered via Wrong Route 2 8 2 6 0 0 0 316 Patient History, Exam, or Workup Problem 1 7 1 2 0 0 0 318 Patient Monitoring Problem 13 7 3 7 5 6 213,000 319 Patient Position Problem 11 4 12 6 2 7 375,000 321 Radiology or Imaging Error 2 9 0 0 0 0 0 322 Surgical or Other Foreign Body Retained 36 4 9 5 6 4 75,314 Wrong Diagnosis or Misdiagnosis (e.g., Original Diagnosis 323 is Incorrect) 101 6 58 6 22 7 300,521 324 Wrong Dosage Administered 5 6 6 6 3 4 1,502,500 325 Wrong Dosage Dispensed 1 9 0 0 0 0 0 326 Wrong Dosage Ordered of Correct Medication 6 5 4 6 1 9 150,000 327 Wrong Medication Administered 12 6 3 6 1 4 50,000 328 Wrong Medication Dispensed 2 4 0 0 1 7 1,568,431 329 Wrong Medication Ordered 11 3 3 7 1 9 61,000 330 Wrong Body Part 8 5 0 0 7 4 41,036 331 Wrong Blood Type 1 2 0 0 0 0 0 332 Wrong Equipment 1 5 2 7 1 9 95,000 333 Wrong Patient 0 0 0 0 1 5 85,000 334 Wrong Procedure or Treatment 26 6 5 5 4 3 54,439 Subtotal 882 5 433 5 224 6 283,664 UNNECESSARY/CONTRAINDICATED PROCEDURE
400 Contraindicated Procedure 1 3 0 0 0 0 0 401 Surgical or Procedural Clearance Contraindicated 16 4 2 5 0 0 0 402 Unnecessary Procedure 5 3 0 0 1 2 20,000 404 Unnecessary Treatment 2 5 4 3 1 3 7,500 A-120 Subtotal 24 4 6 3 2 3 13,750 COMMUNICATION/SUPERVISION
501 Failure to Instruct or Communicate With Patient or Family 36 5 14 5 0 0 0 ALL MEDICAL CARE PROVIDERS 2005 ALLEGATION CATEGORIES Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims 502 Failure to Report on Patient Condition 3 7 1 5 1 9 15,000 503 Failure to Respond to Patient 10 7 1 4 1 3 5,000 504 Failure to Supervise 9 3 8 5 4 5 110,625 505 Improper Supervision 1 3 1 4 0 0 0 Subtotal 59 5 25 5 6 5 77,083 CONTINUITY OF CARE/CARE MANAGEMENT
600 Failure/Delay in Admission to Hospital 3 8 0 0 1 9 5,177 601 Failure/Delay in Referral or Consultation 40 8 4 8 1 9 50,000 602 Premature Discharge from Institution 0 0 2 6 0 0 0 Subtotal 43 8 6 7 2 9 27,589 BEHAVIOR/LEGAL
700 Abondonment 5 7 3 4 0 0 0 703 Breach of Patient Confidentiality 11 2 4 3 0 0 0 704 Equipment Malfunction 8 5 4 4 0 0 0 705 Breach of Regulation, Statute, or Rule 6 5 4 4 2 3 5,292 Failure to Ensure Patient Safety (e.g., from Assault, Falls, 706 Burns, Elopement, etc) 85 00 000 707 Failure to Obtain Consent of Lack of Informed Consent 14 7 9 6 2 4 305,500 Failure to Protect Third Party (e.g., Failure to Warn or 708 Protect from Violence) 1 3 1 9 1 9 25,000 709 Failure to Test Equipment 0 0 0 0 1 3 7,500 711 Improper Conduct 5 3 7 1 0 0 0 715 Product Liability 1 2 0 0 0 0 0 717 Sexual Misconduct 1 1 0 0 0 0 0 719 Vicarious Liability 1 3 0 0 1 3 18,000 720 Wrongful Life / Birth 0 0 0 0 2 8 777,500 Subtotal 61 5 32 4 9 5 247,454 OTHER
899 Cannot be determined from Available Records 16 7 2 3 1 9 600,000
A-121 999 Allegation - Not Otherwise Classified (specify) 614 5 399 5 112 6 206,714 Subtotal 630 5 401 5 113 6 210,195
TOTAL FOR ALL HEALTH CARE PROVIDERS 2,425 6 1221 5 478 6 253,304 PHYSICIANS AND SURGEONS 2005 ALLEGATION CATEGORIES Average Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims FAILURE TO TAKE APPROPRIATE ACTION Failure to Diagnose (i.e. Concluding that patient has no disease or 101 condition worthy of follow-up or observation) 189 6 89 6 30 7 289,596 102 Failure to Delay Case when Indicated 1 5 0 0 0 0 0 103 Failure to Identify Fetal Distress 5 7 2 8 0 0 0 104 Failure to Treat Fetal Distress 2 7 3 6 2 7 157,500 105 Failure to Medicate 1 5 0 0 0 0 0 106 Failure to Monitor 27 7 9 7 1 9 200,000 107 Failure to Order Appropriate Medication 19 6 7 5 1 7 100,929 108 Failure to Order Appropriate Test 3 8 0 0 0 0 0 109 Failure to Perform Preoperative Evaluation 6 6 1 6 0 0 0 110 Failure to Perform Procedure 4 7 1 8 1 5 150,000 111 Failure to Perform Resuscitation 1 9 0 0 0 0 0 112 Failure to Recognize a Complication 7 7 0 0 1 9 100,000 113 Failure to Treat 52 6 54 5 7 6 213,214 Subtotal 317 6 166 6 43 7 256,891 DELAY IN PERFORMANCE
200 Delay in Diagnosis 32 6 16 7 7 8 234,786 201 Delay in Performance 13 7 0 0 2 8 531,250 202 Delay in Treatment 20 7 7 6 1 6 20,000 203 Delay in Treatment of Identified Fetal Distress 5 7 0 0 2 8 445,000 Subtotal 70 7 23 7 12 8 301,333 ERROR/IMPROPER PERFORMANCE
300 Administration of Blood or Fluid Problems 00 00 1 6 150,000 301 Agent Use or Selection Error 2 9 0 0 0 0 0 302 Complimentary or Alternative Medication Problem 3 4 0 0 0 0 0 303 Equipment Utilization Problem 2 4 0 0 0 0 0 304 Improper Choice of Delivery Method 4 7 0 0 1 5 730,000 305 Improper Management 82 6 35 6 8 6 314,638 306 Improper Performance 197 5 100 5 49 6 370,567
A-122 307 Improperly Performed C-Section 5 7 1 4 4,000 308 Improperly Performed Vaginal Delivery 5 5 2 6 7 7 485,714 309 Improperly Performed Resuscitation 1 6 0 0 0 0 0 310 Improperly Performed Test 1 3 1 3 0 0 0 PHYSICIANS AND SURGEONS 2005 ALLEGATION CATEGORIES Average Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims 311 Improper Technique 5 4 2 4 1 6 200,000 312 Intubation Problem 0 0 2 9 0 0 0 314 Pathology Error 0 0 1 2 0 0 0 315 Medication Admininistered via Wrong Route 0 0 1 6 0 0 0 316 Patient History, Exam, or Workup Problem 1 7 0 0 0 0 0 318 Patient Monitoring Problem 8 6 1 4 2 7 337,500 319 Patient Position Problem 4 4 4 6 0 0 0 321 Radiology or Imaging Error 1 9 0 0 0 0 0 322 Surgicalgg or Other Foreign Body g Retained (g,g g 19 4 4 5 2 4 75,000 323 Incorrect) 49 7 25 7 11 8 233,385 324 Wrong Dosage Administered 4 5 2 6 1 6 500,000 325 Wrong Dosage Dispensed 1 9 0 0 0 0 0 326 Wrong Dosage Ordered of Correct Medication 3 5 1 7 0 0 0 327 Wrong Medication Administered 8 6 1 5 0 0 0 328 Wrong Medication Dispensed 2 4 0 0 0 0 0 329 Wrong Medication Ordered 7 3 2 8 1 9 61,000 330 Wrong Body Part 2 5 0 0 3 3 20,000 332 Wrong Equipment 0 0 0 0 1 9 95,000 334 Wrong Procedure or Treatment 13 7 0 0 000 Subtotal 424 6 189 5 89 6 328,844 UNNECESSARY/CONTRAINDICATED PROCEDURE
400 Contraindicated Procedure 1 3 0 0 0 0 0 401 Surgical or Procedural Clearance Contraindicated 10 5 1 6 0 0 0 402 Unnecessary Procedure 3 3 0 0 0 0 0 404 Unnecessary Treatment 1 5 0 0 0 0 0 Subtotal 15 4 1 6 0 0 0 COMMUNICATION/SUPERVISION
501 Failure to Instruct or Communicate With Patient or Family 18 5 12 5 0 0 0 502 Failure to Report on Patient Condition 0 0 1 5 0 0 0 503 Failure to Respond to Patient 1 8 0 0 0 0 0
A-123 504 Failure to Supervise 3 4 2 6 0 0 0 Subtotal 22 5 15 5 0 0 0 CONTINUITY OF CARE/CARE MANAGEMENT
600 Failure/Delay in Admission to Hospital 1 9 0 0 0 0 0 PHYSICIANS AND SURGEONS 2005 ALLEGATION CATEGORIES Average Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims 601 Failure/Delay in Referral or Consultation 9 6 3 7 0 0 0 602 Premature Discharge from Institution 0 0 2 6 0 0 0 Subtotal 10 6 5 7 0 0 0 BEHAVIOR/LEGAL
700 Abondonment 2 9 0 0 0 0 0 703 Breach of Patient Confidentiality 4 2 0 0 0 0 0 704 Equipment Malfunction 2 6 3 3 0 0 0 705 Breach of Regulation, Statute, or Rule 2 8 0 0 0 0 0 707 Failure to Obtain Consent of Lack of Informed Consent 8 7 5 6 2 4 305,500 Failure to Protect Third Party (e.g., Failure to Warn or Protect from 708 Violence) 00 19 000 711 Improper Conduct 1 5 2 1 0 0 0 720 Wrongful Life / Birth 0 0 0 0 1 8 1,000,000 Subtotal 19 6 11 4 3 5 537,000 OTHER
899 Cannot be determined from Available Records 13 7 0 0 1 9 600,000 999 Allegation - Not Otherwise Classified (specify) 357 6 216 5 48 6 267,541 Subtotal 370 6 216 5 49 6 274,326
TOTAL PHYSICIANS AND SURGEONS 1,247 6 626 5 196 6 300,931 A-124 HOSPITALS 2005 ALLEGATION CATEGORIES Average Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims FAILURE TO TAKE APPRORPIRATE ACTION 100 Failure to Use Aseptic Tecnique 2 3 2 4 0 0 0 Failure to Diagnose (i.e. Concluding that patient has no disease 101 or condition worthy of follow-up or observation) 28 5 15 6 8 7 68,899 103 Failure to Identify Fetal Distress 1 6 0 0 0 0 0 104 Failure to Treat Fetal Distress 1 8 1 7 1 8 200,000 106 Failure to Monitor 21 5 5 6 14 6 149,804 107 Failure to Order Appropriate Medication 2 4 3 5 1 5 2,000 108 Failure to Order Appropriate Test 0 0 0 0 1 9 275,000 110 Failure to Perform Procedure 1 3 0 0 0 0 0 112 Failure to Recognize a Complication 2 8 1 9 0 0 0 113 Failure to Treat 13 7 5 5 3 7 95,667 Subtotal 71 5 32 6 28 6 121,873 DELAY IN PERFORMANCE 200 Delay in Diagnosis 6 7 5 6 1 5 145,000 201 Delay in Performance 10 6 2 7 0 0 0 202 Delay in Treatment 19 6 4 6 3 7 593,333 203 Delay in Treatment of Identified Fetal Distress 2 9 2 5 1 7 100,000 Subtotal 37 6 13 6 5 7 405,000 ERROR/IMPROPER PERFORMANCE 300 Administration of Blood or Fluid Problems 2 4 1 4 1 6 200,000 304 Improper Choice of Delivery Method 7 6 0 0 1 7 50,000 305 Improper Management 58 5 52 5 16 6 215,719 306 Improper Performance 75 5 35 5 28 5 149,376 307 Improperly Performed C-Section 1 5 0 0 0 0 0 308 Improperly Performed Vaginal Delivery 2 6 0 0 3 8 516,667 310 Improperly Performed Test 1 3 1 3 1 9 250,000 311 Improper Technique 9 4 3 3 3 4 29,937 312 Intubation Problem 1 3 1 5 0 0 0 315 Medication Admininistered via Wrong Route 2 8 0 0 0 0 0 316 Patient History, Exam, or Workup Problem 0 0 1 2 0 0 0
A-125 318 Patient Monitoring Problem 4 8 1 9 3 6 130,000 319 Patient Position Problem 3 3 1 6 0 0 0 322 Surgical or Other Foreign Body Retained 11 4 3 4 3 3 98,628 HOSPITALS 2005 ALLEGATION CATEGORIES Average Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims Wrong Diagnosis or Misdiagnosis (e.g., Original Diagnosis is 323 Incorrect) 19 6 20 6 7 6 531,935 324 Wrong Dosage Administered 0 0 1 3 2 4 2,003,750 326 Wrong Dosage Ordered of Correct Medication 1 3 1 9 1 9 150,000 327 Wrong Medication Administered 2 8 0 0 1 4 50,000 328 Wrong Medication Dispensed 0 0 0 0 1 7 1,568,431 329 Wrong Medication Ordered 00 14 000 330 Wrong Body Part 0 0 0 0 2 4 29,150 331 Wrong Blood Type 12 00 000 332 Wrong Equipment 15 15 000 333 Wrong Patient 0 0 0 0 1 5 85,000 334 Wrong Procedure or Treatment 8 4 2 4 2 3 15,500 Subtotal 208 5 125 5 76 5 264,914 UNNECESSARY/CONTRAINDICATED PROCESURE 401 Surgical or Procedural Clearance Contraindicated 1 6 0 0 0 0 0 402 Unnecessary Procedure 1 4 0 0 1 2 20,000 Subtotal 2 5 0 0 1 2 20,000 COMMUNICATION/SUPERVISION 501 Failure to Instruct or Communicate With Patient or Family 11 3 1 5 0 0 0 502 Failure to Report on Patient Condition 1 4 0 0 1 9 15,000 503 Failure to Respond to Patient 4 5 1 4 0 0 0 504 Failure to Supervise 3 5 4 4 3 4 30,833 505 Improper Supervision 1 3 0 0 0 0 0 Subtotal 20 4 6 4 4 5 26,875 CONTINUITY OF CARE/CARE MANAGEMENT 601 Failure/Delay in Referral or Consultation 1 9 0 0 0 0 0 Subtotal 1 9 0 0 0 0 0 BEHAVIOR/LEGAL 700 Abondonment 1 3 2 4 0 0 0 703 Breach of Patient Confidentiality 4 2 4 3 0 0 0 704 Equipment Malfunction 4 4 1 6 0 0 0 A-126 705 Breach of Regulation, Statute, or Rule 2 3 3 4 2 3 5,292 Failure to Ensure Patient Safety (e.g., from Assault, Falls, Burns, 706 Elopement, etc) 54 00 000 707 Failure to Obtain Consent of Lack of Informed Consent 1 6 1 5 0 0 0 HOSPITALS 2005 ALLEGATION CATEGORIES Average Average Injury Injury Number of Severity of Average Number Severity Closed Closed Injury Average Reported to Reported to Without Without Number of Severity of Indemnity of Insurer Insurer Payment Payment Paid Claims Paid Claims Paid Claims 711 Improper Conduct 3 2 2 2 0 0 0 719 Vicarious Liability 0 0 0 0 1 3 18,000 Subtotal 20 3 13 4 3 3 9,528 OTHER 999 Allegation - Not Otherwise Classified (specify) 48 5 36 5 21 5 199,239 Subtotal 48 5 36 5 21 5 199,239
TOTAL HOSPITALS 407 5 225 5 138 5 216,747 A-127 Closed Paid Claims Mean number of months from incident to disposition
64
62 All Medical Care Providers Physicians & Surgeons 60 Hospitals 59 59 58
56 56 55 55 55 55 54 54 54 54 53 53 53 52 52 52 52 52 51 51 50 50 49 49 49 49 Months 48 48 47 47 47 47 46 46 45 45 45 44 44 44 43 43 43 43 42 41 41 41 40 40
38 38 37 36 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A-128 Year Bodily Injury Severity of Paid Claims - All Medical Care Providers Mean number of months from incident to disposition
82 80 78 76 74 72 70 68 67 68 66 66 64 64 63 64 62 62 60 59 60 58 58 56 54 53 53 54 52 52 52 50 50 50 50 49 49 49 49 49 49 50 48 48 48 46 45 46 44 43 43 44 42 Mean Number of Months Mean Number 42 40 38 37 37 38 36 36 35 35 36 34 34 34 33 34 32 32 30 28 26 24 22 20 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year A-129 Severity 1,2,3,4 Severity 5,6,7,8 Severity 9
See Section III for the definitions of the severity categories. Bodily Injury Severity of Paid Claims - Physicians and Surgeons Mean number of months from incident to disposition
86 84 82 80 78 76 74 72 70 69
68 66 66 65 65 63 64 62 62 62 60 60 60 60 59 60 58 58 57 55 55 55 56 54 54 53 53 54 52 52 52 51 51 51 51 52 50 50 Mean Number of Months Mean Number 50 48 48 47 47 47 48 46 45 46 44 44 44 43 44 42 42 41 42 40 40 38 36 34 32 30 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A-130 Year
Severity 1,2,3,4 Severity 5,6,7,8 Severity 9
See Section III for the definitions of the severity categories. Bodily Injury Severity of Paid Claims - Hospitals Mean number of months from incident to disposition
100
96
92 87 88
84 80 80 78
76
72 70
68 65 63 63 64 62 59 60 58 58 57 56 53 52 51 52 48 Mean Number of Months Mean Number 48 48 47 47 47 48 46 46 45 45 44 44 43 43 43 44 42 41 40 38 35 35 36 34 33 31 31 32 30 29 28 28 27 27 24 24
20 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A-131 Year
Severity 1,2,3,4 Severity 5,6,7,8 Severity 9
See Section III for the definitions of the severity categories. Lawsuits Filed by Month, 2003-2005
All Providers
1,150 1,120 1,050 950 2005 2004 2003 850 750 650 550 450 350 139 128 250 68 104 105 74 107 97 92 111 116 150 55 Number of Lawsuits Filed 101 85 97 118 99 50 51 74 60 40 28 31 -50 76 104 85 100 115 112 73 117 77 76 77 79 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Month Lawsuit was Filed
Physicians and Surgeons
600 580 550 500 450 2005 2004 2003 400 350 300 250 200 150 73 54 54 51 60 60 62 100 35 42 42 47 25
Number of Lawsuits Filed 50 53 55 51 26 41 43 49 25 0 23 14 14 39 47 43 60 61 56 53 40 42 -50 37 35 36 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Month Lawsuit was Filed
Hospitals
190 184 170 150 2005 2004 2003 130 110 90 70 50 26 25 15 17 17 18 16 30 5 11 12 12 10 19 10 16 9 14 15 13 12 17 26 5 6622
Number of Lawsuits Filed 20 -10 13 16 8 16 16 9 16 16 12 -30 -50 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Month Lawsuit was Filed
A-132 Claims Closed After Lawsuit Filed All Medical Care Providers
90.0% 82.0% 85.0% 79.3% 80.0% 74.2% 74.9% 74.8% 75.3% 75.0% 71.7% 71.9% 72.2% 72.6% 67.5% 68.6% 70.0% 63.9% 65.2% 65.0% 61.8% 60.0% 55.0% 50.0% 45.0% 40.0% % Of All Closed Claims 35.0% 30.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Physicians & Surgeons
100.0% 95.0% 87.5% 89.8% 90.0% 84.5% 84.8% 83.5% 82.7% 81.9% 85.0% 78.5% 80.4% 76.1% 76.6% 80.0% 72.9% 73.4% 75.0% 70.4% 70.0% 65.5% 65.0% 60.0% 55.0% 50.0%
% Of All Closed Claims 45.0% 40.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Hospitals
80.0% 75.0% 70.0% 64.8% 62.7% 62.5% 65.0% 61.1% 60.2% 61.4% 57.0% 58.8% 58.4% 58.5% 60.0% 55.1% 55.7% 56.1% 54.7% 55.0% 49.9% 50.0% 45.0% 40.0% 35.0% 30.0% % Of All Closed Claims 25.0% 20.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
A-133 In Favor of Plaintiff After Lawsuit Filed All Medical Care Providers
55.0% 50.0% 45.0% 40.4% 40.0% 34.5% 35.2% 35.0% 33.0% 32.5% 33.0% 31.5% 31.1% 31.3% 31.3% 30.4% 31.0% 29.1% 28.3% 30.0% 28.1% 25.0% 20.0% % Of All Closed Claims 15.0% 10.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Physicians & Surgeons
55.0% 50.0% 45.0% 40.0% 35.3% 35.0% 30.5% 30.6% 28.3% 29.3% 30.0% 26.9% 26.8% 27.7% 26.9% 27.5% 26.7% 24.8% 24.6% 24.7% 25.0% 22.2% 20.0%
% Of All Closed Claims 15.0% 10.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
Hospitals
60.0% 55.0% 50.0% 49.0% 50.2% 50.0% 45.5% 43.8% 45.1% 44.0% 45.0% 42.1% 42.5% 41.4% 40.4% 41.1% 39.8% 40.0% 37.6% 35.0% 32.0% 30.0%
% Of All Closed Claims 25.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
A-134 Claims Closed After Judge/Jury Verdict (based on all lawsuits filed) All Medical Care Providers
11.0% 10.0% 9.5% 8.9% 9.0% 9.0% 7.9% 8.0% 7.2% 7.3% 7.0% 6.9% 6.9% 7.0% 6.6% 6.0% 5.0% 4.5% 4.5% 4.0% 3.7% 4.0% 2.7% 2.7% 2.9% 3.0% % Of All Closed% Of Claims 2.0% 1.9% 1.9% 1.9% 1.8% 1.7% 1.7% 1.5% 2.0% 1.4% 1.2% 1.2% 1.0% 0.9% 1.0% 0.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
In Favor of Plaintiff In Favor of Defendant
Physicians and Surgeons
14.0% 13.0% 12.0% 11.0% 11.0% 9.9% 10.3% 9.5% 10.0% 9.0% 9.3% 9.0% 8.2% 8.1% 8.2% 8.0% 7.3% 7.0% 5.9% 6.0% 5.4% 4.5% 5.0% 3.9% 4.0% 3.3% 2.8% 2.7% 2.5% 2.4% % Of All Closed% Of Claims 3.0% 2.1% 2.3% 1.7% 1.8% 1.6% 1.7% 1.5% 1.7% 2.0% 1.4% 1.3% 1.1% 1.0% 0.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
In Favor of Plaintiff In Favor of Defendant
Hospitals
7.5% 7.0% 6.5% 6.5% 6.5% 6.0% 5.5% 5.2% 5.0% 4.3% 4.5% 4.0% 3.5% 3.5% 3.6% 3.5% 3.2% 3.3% 3.5% 2.9% 2.9% 3.0% 3.0% 2.3% 2.4% 2.5% 2.0% 1.7% 1.8% 1.6% 2.0% 1.3% 1.4% 1.3% 1.4%
% Of All Closed% Of Claims 1.1% 1.5% 1.0% 0.9% 1.0% 0.6% 0.6% 0.5% 0.0% 0.0% 0.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year
In Favor of Plaintiff In Favor of Defendant
A-135
A-136 Section II Claim Severity
This section classifies individual claim data based on the amount of indemnity paid. The data are divided into summaries of All Medical Care Providers, Physicians and Hospitals for the years 2003, 2004 and 2005. Summaries include:
• Average Number of Months from Occurrence to Close • Number of Claims Reported and Closed • Cumulative Percentage of Number of Claims on Claims Closed • Total Indemnity Paid on all Closed Claims • Cumulative Percentage of Indemnity Paid on Claims Closed • Average Economic Damage Paid on Closed Claims • Average Non-economic Damage Paid on Closed Claims • Average Indemnity Paid per Defendant (Excludes LAE) • Average Loss Adjustment Expense Paid per Defendant
The following terms are used in subsequent tables:
• Economic damages: damages arising from monetary harm including medical bills, loss wages and lost earning capacity. (Unlimited in amount).
• Non-Economic damages: damages arising from non-monetary harm including mental anguish, inconvenience, physical impairment, disfigurement, loss of capacity to enjoy life and loss of consortium. (Malpractice insurance does not insure punitive damages.)
• Loss Adjustment Expenses: includes expenses paid to defense counsel and all other allocated loss adjustment expenses, including filing fees, telephone charges, photocopy fees, expenses of defense counsel, etc.
A-137
A-138 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2005 FOR ALL MEDICAL CARE PROVIDERS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 47 1,221 71.9% 0 0.0% 0 0 0 12,408 1-999 21 6 72.2% 3,443 0.0% 377 197 574 9,032 1,000-1,999 4 3 72.4% 3,618 0.0% 520 686 1,206 977 2,000-2,999 14 8 72.9% 19,213 0.0% 1,725 676 2,402 1,586 3,000-3,999 10 7 73.3% 22,634 0.0% 1,380 1,853 3,233 437 4,000-4,999 40 5 73.6% 21,488 0.1% 3,550 748 4,298 11,637 5,000-5,999 30 12 74.3% 61,679 0.1% 2,529 2,611 5,140 10,751 6,000-6,999 31 6 74.6% 37,430 0.1% 3,002 3,237 6,238 4,081 7,000-7,999 14 7 75.0% 51,500 0.2% 2,779 4,579 7,357 524 9,000-9,999 61 3 75.2% 27,966 0.2% 3,617 5,705 9,322 5,706 10,000-19,999 39 37 77.4% 504,634 0.6% 7,150 6,489 13,639 16,986 20,000-29,999 48 34 79.4% 798,131 1.3% 13,601 9,873 23,474 26,613 30,000-39,999 35 26 80.9% 871,675 2.0% 15,552 17,974 33,526 23,936 40,000-49,999 49 11 81.6% 476,018 2.4% 17,358 25,917 43,274 37,731 50,000-59,999 65 16 82.5% 808,898 3.1% 15,500 35,056 50,556 51,084 60,000-69,999 32 7 82.9% 447,450 3.4% 39,138 24,783 63,921 13,824 70,000-79,999 44 14 83.8% 1,033,424 4.3% 42,269 31,547 73,816 33,284 80,000-89,999 50 8 84.2% 676,810 4.8% 69,776 14,825 84,601 38,054 90,000-99,999 46 11 84.9% 1,027,500 5.7% 48,485 44,924 93,409 50,030 100,000-199,999 61 75 89.3% 10,037,119 14.0% 62,035 71,793 133,828 59,912 200,000-299,999 53 57 92.6% 12,968,536 24.7% 135,218 92,300 227,518 63,760 300,000-399,999 50 32 94.5% 10,817,767 33.6% 174,855 163,200 338,055 51,376 400,000-499,999 52 15 95.4% 6,552,273 39.0% 210,448 226,370 436,818 57,402 500,000-999,999 62 52 98.5% 34,396,231 67.5% 342,923 318,543 661,466 80,989 1,000,000-1,999,999 58 21 99.7% 23,263,743 86.7% 730,473 377,324 1,107,797 93,084 2,000,000-2,999,999 77 2 99.8% 4,900,000 90.7% 1,983,723 466,278 2,450,000 81,456 3,000,000-3,999,999 29 1 99.9% 3,250,000 93.4% 2,671,000 579,000 3,250,000 64,504 OVER 4,000,000 50 2 100.0% 8,000,000 100.0% 3,215,000 785,000 4,000,000 169,746
TOTAL 48 1,699 121,079,180 41,791 29,473 71,265 22,146
TOTAL (PAID ONLY) 49 478 121,079,180 148,543 104,760 253,304 47,023 A-139 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2005 FOR PHYSICIANS AND SURGEONS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 48 626 76.2% 0 0.0% 0 0 0 14,477 1-999 5 1 76.3% 267 0.0% 267 0 267 0 4,000-4,999 47 2 76.5% 8,800 0.0% 4,400 0 4,400 13,308 5,000-5,999 26 1 76.6% 5,000 0.0% 3,000 2,000 5,000 0 7,000-7,999 3 1 76.8% 7,000 0.0% 0 7,000 7,000 854 10,000-19,999 47 8 77.7% 114,000 0.2% 9,750 4,500 14,250 11,863 20,000-29,999 34 13 79.3% 309,000 0.8% 18,398 5,371 23,769 23,797 30,000-39,999 39 7 80.2% 235,000 1.2% 13,857 19,714 33,571 27,112 40,000-49,999 34 1 80.3% 49,500 1.2% 24,500 25,000 49,500 20,877 50,000-59,999 57 6 81.0% 301,398 1.8% 6,333 43,900 50,233 77,724 60,000-69,999 39 5 81.6% 313,500 2.3% 47,450 15,250 62,700 15,541 70,000-79,999 54 3 82.0% 220,000 2.7% 60,667 12,667 73,333 39,248 80,000-89,999 54 4 82.5% 337,500 3.2% 78,250 6,125 84,375 27,768 90,000-99,999 56 5 83.1% 465,000 4.0% 43,600 49,400 93,000 80,079 100,000-199,999 69 39 87.8% 5,164,029 12.8% 64,099 68,312 132,411 52,776 200,000-299,999 51 31 91.6% 6,885,450 24.4% 149,111 73,000 222,111 61,460 300,000-399,999 60 16 93.6% 5,437,767 33.7% 168,754 171,106 339,860 60,987 400,000-499,999 56 11 94.9% 4,864,091 41.9% 197,085 245,106 442,190 50,033 500,000-999,999 72 31 98.7% 20,115,118 76.0% 352,407 296,468 648,875 76,208 1,000,000-1,999,999 43 10 99.9% 10,150,000 93.2% 632,600 382,400 1,015,000 102,096 OVER 4,000,000 50 1 100.0% 4,000,000 100.0% 3,000,000 1,000,000 4,000,000 101,333
TOTAL 50 822 58,982,420 40,973 30,782 71,755 24,152
TOTAL (PAID ONLY) 56 196 58,982,420 171,836 129,094 300,931 55,051 A-140 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2005 FOR HOSPITALS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 46 225 62.0% 0 0.0% 0 0 0 10,013 1-999 6 2 62.5% 770 0.0% 248 137 385 1,035 1,000-1,999 5 2 63.1% 2,618 0.0% 280 1,029 1,309 1,466 2,000-2,999 13 5 64.5% 11,500 0.1% 1,218 1,082 2,300 1,247 3,000-3,999 13 4 65.6% 12,250 0.1% 1,720 1,343 3,063 696 4,000-4,999 35 3 66.4% 12,688 0.1% 2,983 1,247 4,229 10,523 5,000-5,999 16 7 68.3% 36,502 0.3% 3,192 2,022 5,215 5,847 6,000-6,999 25 4 69.4% 25,430 0.3% 3,378 2,980 6,358 6,122 7,000-7,999 6 1 69.7% 7,500 0.4% 4,200 3,300 7,500 2,178 9,000-9,999 112 1 70.0% 9,375 0.4% 5,250 4,125 9,375 11,689 10,000-19,999 29 16 74.4% 220,634 1.1% 5,506 8,283 13,790 22,060 20,000-29,999 52 8 76.6% 185,125 1.8% 13,236 9,904 23,141 25,076 30,000-39,999 39 9 79.1% 310,800 2.8% 16,967 17,567 34,533 22,964 40,000-49,999 50 5 80.4% 205,000 3.5% 25,860 15,140 41,000 49,181 50,000-59,999 106 4 81.5% 200,000 4.2% 30,000 20,000 50,000 44,531 60,000-69,999 14 1 81.8% 65,000 4.4% 36,400 28,600 65,000 5,208 70,000-79,999 43 6 83.5% 445,000 5.9% 48,783 25,383 74,167 33,245 80,000-89,999 35 3 84.3% 251,810 6.7% 67,154 16,783 83,937 52,359 90,000-99,999 37 4 85.4% 375,000 8.0% 43,118 50,633 93,750 22,797 100,000-199,999 55 15 89.5% 2,053,107 14.8% 55,701 81,173 136,874 45,325 200,000-299,999 54 14 93.4% 3,300,000 25.8% 130,664 105,050 235,714 69,334 300,000-399,999 40 8 95.6% 2,715,000 34.9% 211,750 127,625 339,375 62,358 400,000-499,999 21 1 95.9% 450,000 36.4% 122,130 327,870 450,000 5,687 500,000-999,999 62 8 98.1% 5,902,500 56.2% 372,469 365,344 737,813 151,538 1,000,000-1,999,999 83 5 99.5% 6,213,431 76.9% 658,526 584,160 1,242,686 161,274 2,000,000-2,999,999 15 1 99.7% 2,900,000 86.6% 2,321,000 579,000 2,900,000 16,430 OVER 4,000,000 50 1 100.0% 4,000,000 100.0% 3,430,000 570,000 4,000,000 238,159
TOTAL 45 363 29,911,040 49,233 33,166 82,400 23,260
TOTAL (PAID ONLY) 43 138 29,911,040 129,504 87,242 216,747 44,858 A-141 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2004 FOR ALL MEDICAL CARE PROVIDERS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 44 1,321 71.6% 0 0.0% 0 0 0 13,558 1-999 11 6 72.0% 3,308 0.0% 357 194 551 2,819 1,000-1,999 12 8 72.4% 11,575 0.0% 1,086 361 1,447 394 2,000-2,999 19 8 72.8% 18,862 0.0% 1,043 1,315 2,358 2,125 3,000-3,999 31 6 73.2% 19,750 0.0% 958 2,333 3,292 10,664 4,000-4,999 20 6 73.5% 25,622 0.1% 2,494 1,776 4,270 7,599 5,000-5,999 30 10 74.0% 51,725 0.1% 2,734 2,439 5,173 13,205 6,000-6,999 49 5 74.3% 31,292 0.1% 2,258 4,001 6,258 3,640 7,000-7,999 19 2 74.4% 15,000 0.1% 4,575 2,925 7,500 3,885 9,000-9,999 18 5 74.7% 46,320 0.2% 7,085 2,179 9,264 698 10,000-19,999 45 38 76.7% 494,101 0.5% 7,291 5,712 13,003 17,044 20,000-29,999 46 41 79.0% 976,109 1.3% 10,464 13,343 23,808 31,961 30,000-39,999 40 18 79.9% 608,855 1.8% 18,156 15,669 33,825 18,080 40,000-49,999 43 15 80.8% 635,177 2.2% 22,647 19,698 42,345 23,954 50,000-59,999 40 20 81.8% 1,010,138 3.0% 22,858 27,649 50,507 37,406 60,000-69,999 37 6 82.2% 387,355 3.3% 45,037 19,523 64,559 37,447 70,000-79,999 55 14 82.9% 1,039,032 4.1% 50,633 23,583 74,217 39,623 80,000-89,999 36 9 83.4% 748,320 4.6% 37,158 45,989 83,147 29,639 90,000-99,999 40 5 83.7% 476,636 5.0% 29,923 65,404 95,327 22,998 100,000-199,999 52 79 88.0% 11,115,728 13.4% 59,583 81,122 140,705 40,506 200,000-299,999 52 70 91.8% 16,128,153 25.7% 118,959 111,443 230,402 42,860 300,000-399,999 48 51 94.5% 16,678,308 38.3% 169,868 157,157 327,026 60,487 400,000-499,999 44 25 95.9% 10,844,828 46.6% 195,450 238,343 433,793 28,444 500,000-999,999 54 55 98.9% 37,011,422 74.6% 398,223 274,712 672,935 77,373 1,000,000-1,999,999 48 18 99.8% 20,240,774 90.0% 843,251 281,236 1,124,487 158,207 2,000,000-2,999,999 45 1 99.9% 2,000,000 91.5% 1,120,000 880,000 2,000,000 73,445 3,000,000-3,999,999 51 1 100.0% 3,200,000 93.9% 2,100,000 1,100,000 3,200,000 153,107 OVER 4,000,000 86 1 100.0% 8,000,000 100.0% 8,000,000 0 8,000,000 0
TOTAL 45 1,844 131,818,390 42,462 29,023 71,485 21,744
TOTAL (PAID ONLY) 46 523 131,818,390 149,714 102,329 252,043 42,421 A-142 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2004 FOR PHYSICIANS AND SURGEONS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 47 674 75.1% 0 0.0% 0 0 0 17,932 1,000-1,999 2 1 75.2% 1,057 0.0% 1,057 0 1,057 0 3,000-3,999 36 1 75.3% 3,500 0.0% 0 3,500 3,500 6,623 4,000-4,999 28 2 75.5% 8,820 0.0% 4,410 0 4,410 19,879 9,000-9,999 19 1 75.6% 9,000 0.0% 9,000 0 9,000 0 10,000-19,999 57 13 77.1% 174,334 0.3% 10,718 2,692 13,410 27,139 20,000-29,999 51 14 78.6% 335,904 0.8% 11,463 12,531 23,993 48,437 30,000-39,999 56 5 79.2% 167,900 1.1% 18,480 15,100 33,580 24,599 40,000-49,999 44 6 79.8% 258,900 1.5% 23,450 19,700 43,150 29,556 50,000-59,999 54 4 80.3% 200,000 1.8% 35,000 15,000 50,000 44,218 60,000-69,999 52 1 80.4% 67,500 1.9% 67,500 0 67,500 28,602 70,000-79,999 49 6 81.1% 445,000 2.6% 50,102 24,065 74,167 31,904 80,000-89,999 45 3 81.4% 246,737 3.0% 28,333 53,912 82,246 32,552 90,000-99,999 32 1 81.5% 95,000 3.1% 0 95,000 95,000 48,341 100,000-199,999 59 37 85.6% 5,331,000 11.4% 67,149 76,932 144,081 40,222 200,000-299,999 53 44 90.5% 9,956,762 26.9% 131,864 94,426 226,290 44,691 300,000-399,999 50 29 93.8% 9,464,975 41.7% 180,523 145,855 326,378 81,481 400,000-499,999 49 15 95.4% 6,554,828 51.9% 215,141 221,847 436,989 29,161 500,000-999,999 59 32 99.0% 21,365,991 85.1% 401,444 266,243 667,687 93,465 1,000,000-1,999,999 52 9 100.0% 9,575,000 100.0% 1,020,083 43,806 1,063,889 123,022
TOTAL 49 898 64,262,208 44,455 27,106 71,561 27,126
TOTAL (PAID ONLY) 53 224 64,262,208 178,217 108,668 286,885 54,793 A-143 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2004 FOR HOSPITALS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 37 206 62.2% 0 0.0% 0 0 0 8,470 1-999 10 2 62.8% 622 0.0% 184 128 311 1,387 1,000-1,999 6 4 64.1% 6,213 0.0% 1,035 519 1,553 787 2,000-2,999 21 6 65.9% 13,535 0.1% 919 1,337 2,256 2,781 4,000-4,999 17 3 66.8% 12,802 0.1% 2,049 2,219 4,267 1,946 5,000-5,999 19 4 68.0% 20,500 0.2% 2,428 2,698 5,125 5,780 6,000-6,999 24 3 68.9% 18,790 0.3% 2,096 4,167 6,263 5,949 7,000-7,999 4 1 69.2% 7,500 0.3% 3,150 4,350 7,500 2,623 9,000-9,999 11 1 69.5% 9,000 0.4% 5,040 3,960 9,000 715 10,000-19,999 33 10 72.5% 123,500 0.9% 4,422 7,928 12,350 15,192 20,000-29,999 41 13 76.4% 321,536 2.3% 10,069 14,664 24,734 23,407 30,000-39,999 33 7 78.6% 233,455 3.3% 19,198 14,153 33,351 14,894 40,000-49,999 47 4 79.8% 164,277 4.0% 27,837 13,232 41,069 14,954 50,000-59,999 30 6 81.6% 300,000 5.3% 28,833 21,167 50,000 43,210 60,000-69,999 29 2 82.2% 129,855 5.9% 36,360 28,568 64,928 57,988 70,000-79,999 68 4 83.4% 304,032 7.2% 50,815 25,194 76,008 55,104 80,000-89,999 24 2 84.0% 172,000 7.9% 42,210 43,790 86,000 12,312 90,000-99,999 55 1 84.3% 95,496 8.3% 53,477 42,019 95,496 2,220 100,000-199,999 46 15 88.8% 2,067,500 17.2% 82,133 55,700 137,833 64,758 200,000-299,999 55 13 92.8% 3,093,891 30.5% 136,482 101,509 237,992 46,367 300,000-399,999 38 9 95.5% 2,850,000 42.7% 167,221 149,446 316,667 35,439 400,000-499,999 27 3 96.4% 1,365,000 48.6% 285,833 169,167 455,000 15,926 500,000-999,999 57 7 98.5% 4,775,000 69.1% 335,571 346,571 682,143 64,681 1,000,000-1,999,999 37 4 99.7% 5,200,000 91.4% 648,750 651,250 1,300,000 199,550 2,000,000-2,999,999 45 1 100.0% 2,000,000 100.0% 1,120,000 880,000 2,000,000 73,445
TOTAL 37 331 23,284,504 37,706 32,639 70,346 19,111
TOTAL (PAID ONLY) 38 125 23,284,504 99,847 86,429 186,276 36,647 A-144 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2003 FOR ALL MEDICAL CARE PROVIDERS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 44 1,188 68.8% 0 0.0% 0 0 0 11,429 1-999 9 7 69.2% 3,065 0.0% 252 186 438 400 1,000-1,999 22 6 69.5% 9,029 0.0% 713 792 1,505 2,975 2,000-2,999 26 11 70.2% 28,067 0.0% 1,074 1,477 2,552 2,781 3,000-3,999 19 9 70.7% 31,651 0.1% 1,610 1,907 3,517 1,379 4,000-4,999 44 6 71.1% 25,973 0.1% 2,521 1,808 4,329 7,386 5,000-5,999 33 14 71.9% 72,156 0.2% 3,086 2,068 5,154 8,236 6,000-6,999 20 3 72.0% 18,643 0.2% 4,748 1,467 6,214 8 7,000-7,999 30 11 72.7% 82,002 0.2% 4,774 2,681 7,455 12,532 8,000-8,999 278 1 72.7% 8,000 0.2% 6,400 1,600 8,000 0 9,000-9,999 9 1 72.8% 9,948 0.3% 4,974 4,974 9,948 0 10,000-19,999 33 33 74.7% 411,634 0.6% 5,614 6,859 12,474 9,768 20,000-29,999 41 28 76.3% 670,823 1.2% 10,770 13,188 23,958 17,506 30,000-39,999 38 22 77.6% 740,411 1.9% 15,309 18,346 33,655 17,734 40,000-49,999 50 18 78.6% 738,537 2.5% 19,023 22,006 41,030 25,940 50,000-59,999 51 29 80.3% 1,478,500 3.8% 17,529 33,454 50,983 35,914 60,000-69,999 42 8 80.8% 509,000 4.2% 42,906 20,719 63,625 19,426 70,000-79,999 47 19 81.9% 1,395,804 5.5% 41,407 32,057 73,463 24,626 80,000-89,999 70 7 82.3% 600,217 6.0% 58,800 26,946 85,745 17,467 90,000-99,999 41 7 82.7% 640,000 6.6% 26,086 65,343 91,429 50,064 100,000-199,999 51 98 88.4% 13,653,484 18.5% 58,784 80,537 139,321 29,846 200,000-299,999 45 80 93.0% 18,479,690 34.8% 121,069 109,927 230,996 38,363 300,000-399,999 57 36 95.1% 11,591,000 44.9% 184,905 137,067 321,972 31,511 400,000-499,999 69 22 96.4% 9,507,406 53.3% 234,905 197,250 432,155 51,579 500,000-999,999 54 45 99.0% 29,327,951 79.0% 419,167 232,565 651,732 50,071 1,000,000-1,999,999 68 14 99.8% 15,026,383 92.2% 750,345 322,968 1,073,313 64,082 2,000,000-2,999,999 45 4 100.0% 8,910,038 100.0% 1,142,426 1,085,083 2,227,510 123,125
TOTAL 45 1,727 113,969,412 37,507 28,485 65,993 17,169
TOTAL (PAID ONLY) 47 539 113,969,412 120,177 91,269 211,446 29,822 A-145 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2003 FOR PHYSICIANS AND SURGEONS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 47 557 74.4% 0 0.0% 0 0 0 15,085 2,000-2,999 27 2 74.6% 5,000 0.0% 750 1,750 2,500 2,937 4,000-4,999 71 1 74.8% 4,173 0.0% 0 4,173 4,173 11,338 5,000-5,999 53 1 74.9% 5,000 0.0% 0 5,000 5,000 11,107 6,000-6,999 13 1 75.0% 6,000 0.0% 1,600 4,400 6,000 0 7,000-7,999 64 3 75.4% 22,200 0.1% 4,900 2,500 7,400 31,920 9,000-9,999 9 1 75.6% 9,948 0.1% 4,974 4,974 9,948 0 10,000-19,999 38 13 77.3% 154,500 0.4% 5,923 5,962 11,885 10,402 20,000-29,999 40 7 78.2% 164,970 0.8% 4,354 19,213 23,567 10,412 30,000-39,999 40 7 79.2% 245,556 1.3% 12,139 22,941 35,079 21,367 40,000-49,999 41 3 79.6% 120,000 1.5% 23,533 16,467 40,000 49,533 50,000-59,999 56 10 80.9% 512,500 2.6% 23,228 28,022 51,250 46,950 60,000-69,999 54 2 81.2% 127,500 2.8% 27,500 36,250 63,750 44,330 70,000-79,999 49 6 82.0% 440,000 3.7% 42,917 30,417 73,333 26,699 80,000-89,999 79 3 82.4% 260,000 4.3% 61,333 25,333 86,667 19,326 90,000-99,999 33 3 82.8% 275,000 4.8% 14,067 77,600 91,667 10,793 100,000-199,999 54 40 88.1% 5,742,407 16.6% 64,132 79,428 143,560 30,621 200,000-299,999 49 34 92.7% 7,834,508 32.7% 125,319 105,107 230,427 36,092 300,000-399,999 49 14 94.5% 4,495,000 42.0% 233,084 87,988 321,071 25,861 400,000-499,999 70 12 96.1% 5,155,902 52.5% 274,117 155,542 429,659 53,764 500,000-999,999 66 20 98.8% 13,576,673 80.4% 463,566 215,268 678,834 61,359 1,000,000-1,999,999 77 9 100.0% 9,525,891 100.0% 708,920 349,513 1,058,432 82,707
TOTAL 49 749 48,682,728 40,170 24,827 64,997 20,390
TOTAL (PAID ONLY) 53 192 48,682,728 156,704 96,852 253,556 35,780 A-146 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION SUMMARY BY AMOUNT OF INDEMNITY AWARDED FOR EACH DEFENDANT CLOSED IN 2003 FOR HOSPITALS
Average Average Number of Cum % of Average Average Indemnity Expense Average Closed Cum % of Indemnity Indemnity Economic Non-Economic Per Per Indemnity Range Months Claims Claims Paid Paid Damages Damages Defendant Defendant
NONE 44 194 59.0% 0 0.0% 0 0 0 11,797 1-999 16 2 59.6% 241 0.0% 121 0 121 1,387 1,000-1,999 9 3 60.5% 4,496 0.0% 670 829 1,499 917 2,000-2,999 26 4 61.7% 10,000 0.1% 1,063 1,438 2,500 4,397 3,000-3,999 14 5 63.2% 16,778 0.1% 1,192 2,163 3,356 1,532 5,000-5,999 39 8 65.7% 41,186 0.3% 3,217 1,931 5,148 12,676 6,000-6,999 39 1 66.0% 6,000 0.3% 6,000 0 6,000 0 7,000-7,999 16 5 67.5% 37,000 0.4% 3,934 3,466 7,400 1,935 10,000-19,999 30 13 71.4% 173,634 1.1% 6,563 6,793 13,356 7,955 20,000-29,999 33 11 74.8% 257,500 2.1% 12,745 10,664 23,409 14,101 30,000-39,999 39 6 76.6% 206,000 2.9% 17,747 16,587 34,333 16,707 40,000-49,999 54 7 78.7% 294,600 4.0% 20,241 21,845 42,086 19,473 50,000-59,999 45 11 82.1% 561,000 6.2% 17,751 33,249 51,000 23,725 60,000-69,999 27 2 82.7% 125,000 6.7% 43,700 18,800 62,500 2,748 70,000-79,999 40 4 83.9% 291,500 7.8% 51,760 21,115 72,875 12,222 80,000-89,999 51 3 84.8% 255,217 8.8% 72,532 12,540 85,072 7,067 90,000-99,999 51 1 85.1% 90,000 9.1% 50,400 39,600 90,000 119,048 100,000-199,999 43 17 90.3% 2,387,680 18.3% 71,859 68,593 140,452 26,822 200,000-299,999 41 12 93.9% 2,803,000 29.1% 109,708 123,875 233,583 37,032 300,000-399,999 43 3 94.8% 950,000 32.7% 197,807 118,860 316,667 36,255 400,000-499,999 163 2 95.4% 945,000 36.4% 251,000 221,500 472,500 63,753 500,000-999,999 50 9 98.2% 5,143,605 56.1% 269,516 301,996 571,512 49,413 1,000,000-1,999,999 57 2 98.8% 2,500,000 65.7% 771,027 478,973 1,250,000 37,158 2,000,000-2,999,999 45 4 100.0% 8,910,038 100.0% 1,142,426 1,085,083 2,227,510 123,125
TOTAL 42 329 26,009,475 40,931 38,126 79,056 16,806
TOTAL (PAID ONLY) 40 135 26,009,475 99,749 92,913 192,663 24,005 A-147
A-148 Section III Claim Severity by Injury Severity And Lapsed Time to Disposition
This section illustrates the paid claim count, the average paid indemnity (economic + non- economic), the percent change of paid claims, and the percent change of the average paid indemnity by bodily injury severity for the past four years. These tables are displayed by the major business classifications and by the months from incident to disposition for all medical care providers, physicians and hospitals. The following define the severity categories:
• Severity 1, 2, 3, 4 - emotional distress, insignificant or temporary injury, including contusions, minor scars, infections, fracture, burns, drug side effect.
• Severity 5, 6, 7, 8 - permanent injuries, such as loss of limb, damage to organs, deafness, blindness, brain damage, paraplegia.
• Severity 9 - death.
A-149
A-150 Percentage of Paid Claims by Profession - 2005
All Other 22%
Physicians & Surgeons 41%
Nursing Homes 2%
Dentists 3%
Hospitals 29% Nurses 3%
Percentage of Paid Claims by Profession - 2004
All Other 21% Physicians & Surgeons 42%
Nursing Homes 6%
Dentists 3%
Hospitals Nurses 24% 4%
A-151 Missouri Department of Insurance, Financial Institutions and Professional Registration Bodily Injury Claim Indemnity Comparisons All Medical Care Providers
Severity 1,2,3,4
2005 2005-2004 2004 2004-2003 2003 2003-2002 Number of Average Percent Number of Average Percent Number of Average Percent Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of Profession Type Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
CLINICS/CORP 22 65,599 (4.35) (50.25) 23 131,865 (41.03) 39.05 39 94,836 (7.14) 14.55 PHYS & SURG 46 147,008 (8.00) 15.33 50 127,465 (10.71) (13.74) 56 147,760 (8.20) 3.27 HOSPITALS 62 99,708 19.23 42.12 52 70,157 (10.34) 67.02 58 42,006 23.40 (19.68) NURSES 6 20,652 (33.33) (26.02) 9 27,914 800.00 (44.17) 1 50,000 (66.67) 361.54 NURSING HOMES 2 86,500 (71.43) 73.12 7 49,964 (41.67) (62.21) 12 132,222 9.09 18.76 DENTISTS 9 44,214 12.50 411.34 8 8,647 (20.00) (59.47) 10 21,333 (41.18) 34.87 PHARMACIES 10 18,790 (16.67) 20.91 12 15,540 33.33 19.46 9 13,008 28.57 150.51 OPTOMETRIST 0 0 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 CHIROPRACTORS 5 32,251 66.67 244.01 3 9,375 50.00 36.86 2 6,850 (50.00) (58.80) PODIATRIST/CHIROPODIST 6 78,117 500.00 79.58 1 43,500 (50.00) 9.43 2 39,750 0.00 0.00
TOTAL 168 94,644 1.82 11.68 165 84,743 (12.70) (2.75) 189 87,142 (2.07) 2.80
Severity 5,6,7,8
2005 2005-2004 2004 2004-2003 2003 2003-2002 Number of Average Percent Number of Average Percent Number of Average Percent Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of Profession Type Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
CLINICS/CORP 36 524,461 2.86 (22.29) 35 674,869 (32.69) 132.03 52 290,851 18.18 (9.74) PHYS & SURG 88 397,565 (8.33) 7.13 96 371,116 23.08 17.48 78 315,898 (9.30) 3.22 HOSPITALS 46 347,624 12.20 20.02 41 289,647 36.67 (34.53) 30 442,406 0.00 122.86 NURSES 4 239,773 (42.86) 49.59 7 160,286 75.00 23.30 4 130,000 0.00 (43.70) NURSING HOMES 3 241,128 200.00 4,722.60 1 5,000 (50.00) (98.10) 2 262,500 (60.00) 1.35 DENTISTS 5 112,220 (16.67) 120.21 6 50,961 50.00 (78.54) 4 237,500 0.00 11.11 PHARMACIES 1 10,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 OPTOMETRIST 0 0 0.00 0.00 1 870,000 0.00 0.00 0 0 0.00 0.00 CHIROPRACTORS 1 31,875 0.00 (54.46) 1 70,000 (50.00) 1.45 2 69,000 0.00 0.00 PODIATRIST/CHIROPODIST 2 112,500 (60.00) 36.36 5 82,500 0.00 0.00 0 0 0.00 0.00
TOTAL 186 389,072 (3.63) 1.60 193 382,945 12.21 19.39 172 320,752 (1.15) 10.62
Severity 9
2005 2005-2004 2004 2004-2003 2003 2003-2002 Number of Average Percent Number of Average Percent Number of Average Percent Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of Profession Type Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
CLINICS/CORP 20 198,234 (28.57) (32.66) 28 294,373 (26.32) 23.47 38 238,420 (19.15) (42.61) PHYS & SURG 62 277,973 (20.51) (2.60) 78 285,408 34.48 4.98 58 271,864 (32.56) 33.57 HOSPITALS 30 257,947 (6.25) 6.36 32 242,525 (31.91) 10.66 47 219,169 34.29 0.09 NURSES 4 289,730 0.00 125.03 4 128,750 100.00 (45.79) 2 237,500 (50.00) 170.23 NURSING HOMES 6 185,872 (72.73) (19.25) 22 230,185 (24.14) 22.16 29 188,436 (21.62) (8.59) DENTISTS 1 700,000 0.00 0.00 0 0 0.00 0.00 1 200,000 0.00 0.00
A-152 PHARMACIES 1 900,000 0.00 980.00 1 83,333 0.00 624.63 1 11,500 0.00 0.00 PODIATRIST/CHIROPODIST 0 0 0.00 0.00 0 0 0.00 0.00 2 525,000 0.00 0.00
TOTAL 124 264,609 (24.85) (0.61) 165 266,227 (7.30) 11.95 178 237,810 (14.83) (5.64) Lapsed Months From Incident to Disposition 2005 Closed Paid Claims - All Health Care Providers
48 46 44 42 40 38 36 36 34 32 31 30 28 26 23 24 22 22 21 22 20 20 18 18 18 17 18 16 16 16 16 16 15 13 13 Number of Closed Paid Claims 14 1212 12 12 10 10 10 10 8 7 7 7 8 6 5 6 4 3 3 33 4 2 2 1 2 0 0 0 - 6 7 - 12 13 - 18 19 - 24 25 - 30 31 - 36 37 - 42 43 - 48 49 - 60 61 - 71 72 - 82 83 - 93 Greater than 93 Average Number of Months
A-153 Severity 1,2,3,4 Severity 5,6,7,8 Severity 9 Missouri Department of Insurance, Financial Institutions and Professional Registration Bodily Injury Claim Indemnity Comparisons All Medical Care Providers
Severity 1,2,3,4
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 16 7,788 23.08 73.29 13 4,494 0.00 (40.89) 13 7,604 30.00 74.82 7- 12 22 13,501 15.79 (28.58) 19 18,903 (20.83) (24.13) 24 24,915 20.00 76.51 13- 18 17 35,604 (10.53) (2.79) 19 36,624 11.76 8.61 17 33,722 (37.04) 9.46 19- 24 13 64,600 (23.53) (14.31) 17 75,390 21.43 (16.50) 14 90,287 (33.33) 19.37 25- 30 13 51,290 (7.14) (42.47) 14 89,145 (6.67) 11.92 15 79,649 (11.76) (12.10) 31- 36 12 91,817 (7.69) 579.13 13 13,520 (43.48) (83.24) 23 80,681 109.09 (53.15) 37- 42 22 100,625 57.14 (16.55) 14 120,576 (33.33) (2.57) 21 123,762 0.00 21.53 43- 48 10 114,100 (41.18) 34.45 17 84,866 0.00 (31.79) 17 124,412 30.77 33.66 49- 60 20 294,087 11.11 23.28 18 238,549 (37.93) 50.49 29 158,519 16.00 (4.77) 61- 71 7 113,000 0.00 (49.89) 7 225,500 (30.00) 103.84 10 110,623 150.00 (9.70) 72- 82 8 125,610 14.29 74.98 7 71,784 133.33 (29.39) 3 101,667 (70.00) 4.60 83- 93 3 104,167 (40.00) 251.91 5 29,600 150.00 (61.81) 2 77,500 (60.00) (36.73) 94-104 3 276,667 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 105-115 1 40,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 116-126 0 0 0.00 0.00 2 255,000 0.00 0.00 0 0 0.00 0.00 127-137 1 50,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 215-225 0 0 0.00 0.00 0 0 0.00 0.00 1 8,000 0.00 0.00
TOTAL 168 94,644 1.82 11.68 165 84,743 (12.70) (2.75) 189 87,142 (2.07) 2.80
Severity 5,6,7,8
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 0 0 0.00 0.00 1 5,000 0.00 0.00 0 0 0.00 0.00 7- 12 1 35,000 (83.33) (56.16) 6 79,833 200.00 99.71 2 39,974 (33.33) 110.39 13- 18 6 681,250 (25.00) 146.08 8 276,844 166.67 (45.00) 3 503,333 (62.50) 183.56 19- 24 10 205,328 66.67 (45.14) 6 374,266 (33.33) 15.22 9 324,833 (18.18) 116.25 25- 30 16 446,169 (30.43) 36.06 23 327,917 15.00 44.41 20 227,075 185.71 (0.91) 31- 36 12 409,488 (7.69) 29.54 13 316,118 (31.58) (10.69) 19 353,952 5.56 28.30 37- 42 18 307,054 (30.77) (22.68) 26 397,135 44.44 34.45 18 295,383 (28.00) (3.77) 43- 48 18 322,230 (5.26) (29.36) 19 456,155 11.76 114.51 17 212,647 (37.04) (36.57) 49- 60 36 482,064 (20.00) 27.00 45 379,586 28.57 2.21 35 371,371 34.62 32.53 61- 71 23 306,896 64.29 42.41 14 215,500 0.00 (31.33) 14 313,810 (6.67) (14.30) 72- 82 18 311,988 100.00 13.60 9 274,630 (10.00) (24.92) 10 365,768 (16.67) 13.22 83- 93 7 345,000 0.00 (77.29) 7 1,519,000 (12.50) 379.04 8 317,090 (11.11) 27.97 94-104 5 200,200 (44.44) (41.88) 9 344,444 125.00 39.88 4 246,250 (20.00) 6.29 105-115 3 262,500 200.00 1098.40 1 21,904 (66.67) (90.37) 3 227,500 200.00 (12.50) 116-126 3 697,333 200.00 132.44 1 300,000 0.00 (36.84) 1 475,000 (80.00) 13.10 127-137 0 0 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 138-148 1 2,000,000 0.00 300.00 1 500,000 (50.00) (10.11) 2 556,250 0.00 0.00 149-159 2 1,162,656 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 160-170 0 0 0.00 0.00 0 0 0.00 0.00 1 300,000 0.00 0.00 182-192 0 0 0.00 0.00 1 200,000 0.00 29.03 1 155,000 0.00 0.00 215-225 7 308,929 133.33 (6.86) 3 331,667 (40.00) (47.55) 5 632,359 400.00 (42.51)
TOTAL 186 389,072 (3.63) 1.60 193 382,945 12.21 19.39 172 320,752 (1.15) 10.62 A-154 Missouri Department of Insurance, Financial Institutions and Professional Registration Bodily Injury Claim Indemnity Comparisons All Medical Care Providers
Severity 9
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 2 27,960 100.00 (92.01) 1 350,000 0.00 0.00 0 0 0.00 0.00 7- 12 2 475,000 100.00 850.00 1 50,000 (50.00) (85.94) 2 355,677 100.00 255.68 13- 18 4 400,000 100.00 95.12 2 205,000 (50.00) (38.28) 4 332,171 (60.00) 13.66 19- 24 3 445,833 (40.00) (18.51) 5 547,080 (37.50) 166.46 8 205,313 (55.56) (3.54) 25- 30 7 387,857 (50.00) 36.84 14 283,446 0.00 (14.39) 14 331,071 (51.72) 41.95 31- 36 16 224,389 (5.88) (36.58) 17 353,807 (10.53) 7.52 19 329,053 (13.64) 43.22 37- 42 15 302,412 (44.44) 21.52 27 248,850 (3.57) 13.11 28 219,998 16.67 (12.06) 43- 48 16 236,673 (38.46) (3.47) 26 245,192 18.18 (7.55) 22 265,227 (4.35) (50.32) 49- 60 31 245,669 (22.50) 10.65 40 222,027 (6.98) 7.07 43 207,364 7.50 21.53 61- 71 12 269,020 0.00 33.81 12 201,042 (50.00) 3.94 24 193,429 20.00 (11.78) 72- 82 10 118,350 (9.09) (72.46) 11 429,735 120.00 124.40 5 191,500 (44.44) (18.89) 83- 93 3 254,167 0.00 36.16 3 186,667 0.00 47.37 3 126,667 (62.50) (2.31) 94-104 0 0 0.00 0.00 2 150,000 (33.33) 311.90 3 36,417 200.00 5109.80 105-115 2 662,500 100.00 155.30 1 259,500 0.00 48.29 1 175,000 (75.00) (47.96) 116-126 1 125,000 0.00 0.00 0 0 0.00 0.00 1 500,000 0.00 0.00 138-148 0 0 0.00 0.00 3 55,000 200.00 (35.29) 1 85,000 0.00 0.00
TOTAL 124 264,609 (24.85) (0.61) 165 266,227 (7.30) 11.95 178 237,810 (14.83) (5.64) A-155 Lapsed Months From Incident to Disposition 2005 Closed Paid Claims - Physicians & Surgeons
27 26 25 24 23 22 21 20 20 19 18 18 17 16 15 14 13 12 11 11 10 10 10 9 9 8 8 8 Number of Closed Paid Claims 8 77 7 7 6 6 6 5 5 5 5 4 4 4 4 4 3 3 33 3 3 3 2 2 2 2 2 1 1 1 1 1 0 0 0 0 0 0 - 6 7 - 12 13 - 18 19 - 24 25 - 30 31 - 36 37 - 42 43 - 48 49 - 60 61 - 71 72 - 82 83 - 93 Greater than 93 Average Number of Months
A-156 Severity 1,2,3,4 Severity 5,6,7,8 Severity 9 Missouri Department of Insurance, Financial Institutions and Professional Registration Bodily Injury Claim Indemnity Comparisons Physicians and Surgeons
Severity 1,2,3,4
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 4 16,817 300.00 1491.00 1 1,057 0.00 0.00 0 0 0.00 0.00 7- 12 2 46,250 0.00 0.00 0 0 0.00 0.00 2 11,250 0.00 0.00 13- 18 1 100,000 (50.00) 133.92 2 42,750 0.00 307.14 2 10,500 (50.00) (90.67) 19- 24 4 132,625 (42.86) 56.45 7 84,771 75.00 21.10 4 70,000 0.00 (68.00) 25- 30 3 113,333 (40.00) 43.46 5 79,000 0.00 (50.13) 5 158,400 25.00 (3.27) 31- 36 5 103,860 25.00 397.53 4 20,875 (42.86) (78.78) 7 98,394 40.00 (70.85) 37- 42 6 139,167 (14.29) (17.62) 7 168,939 (12.50) 15.27 8 146,563 14.29 (17.20) 43- 48 4 216,500 (55.56) 55.73 9 139,024 (18.18) 21.61 11 114,319 450.00 8.88 49- 60 7 155,514 16.67 (45.85) 6 287,167 (53.85) 19.42 13 240,462 (18.75) 129.76 61- 71 3 223,333 50.00 (5.96) 2 237,500 (50.00) 3.90 4 228,578 33.33 71.43 72- 82 3 230,229 (40.00) 154.12 5 90,597 0.00 0.00 0 0 0.00 0.00 83- 93 1 87,500 (50.00) 34.62 2 65,000 0.00 0.00 0 0 0.00 0.00 94-104 2 412,500 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 116-126 0 0 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 127-137 1 50,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00
TOTAL 46 147,008 (8.00) 15.33 50 127,465 (10.71) (13.74) 56 147,760 (8.20) 3.27
Severity 5,6,7,8
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
7- 12 0 0 0.00 0.00 0 0 0.00 0.00 2 39,974 0.00 0.00 13- 18 2 515,000 0.00 43.06 2 360,000 100.00 (64.00) 1 1,000,000 (75.00) 242.98 19- 24 1 1,150,000 (75.00) 161.28 4 440,149 (20.00) (3.37) 5 455,500 66.67 314.09 25- 30 8 182,827 (27.27) (52.03) 11 381,091 175.00 570.05 4 56,875 33.33 (79.93) 31- 36 5 450,000 (16.67) 18.94 6 378,333 (25.00) 110.19 8 180,000 (20.00) (47.60) 37- 42 10 367,197 0.00 (14.08) 10 427,352 25.00 74.44 8 244,988 (11.11) (42.11) 43- 48 9 359,600 0.00 3.32 9 348,032 28.57 41.23 7 246,429 (50.00) (15.29) 49- 60 20 618,296 (20.00) 65.51 25 373,568 25.00 (3.43) 20 386,819 81.82 13.94 61- 71 10 193,382 42.86 (19.57) 7 240,429 16.67 22.51 6 196,250 (40.00) (30.10) 72- 82 8 328,688 14.29 11.33 7 295,239 600.00 (15.65) 1 350,000 (87.50) 14.55 83- 93 4 166,250 0.00 (52.94) 4 353,250 (33.33) 18.28 6 298,667 (25.00) 25.42 94-104 4 240,250 (20.00) (59.42) 5 592,000 150.00 57.87 2 375,000 (33.33) 423.26 105-115 1 750,000 0.00 3324.00 1 21,904 (50.00) (46.90) 2 41,250 0.00 0.00 116-126 2 496,000 100.00 65.33 1 300,000 0.00 (36.84) 1 475,000 (50.00) 111.11 138-148 0 0 0.00 0.00 1 500,000 0.00 (50.00) 1 1,000,000 0.00 0.00 182-192 0 0 0.00 0.00 0 0 0.00 0.00 1 155,000 0.00 0.00 215-225 4 471,875 33.33 42.27 3 331,667 0.00 (58.74) 3 803,931 200.00 (26.92)
TOTAL 88 397,565 (8.33) 7.13 96 371,116 23.08 17.48 78 315,898 (9.30) 3.22 A-157 Missouri Department of Insurance, Financial Institutions and Professional Registration Bodily Injury Claim Indemnity Comparisons Physicians and Surgeons
Severity 9
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 1 50,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 13- 18 2 475,000 0.00 131.71 2 205,000 100.00 36.67 1 150,000 (66.67) (72.81) 19- 24 0 0 0.00 0.00 3 375,133 0.00 27.89 3 293,333 (50.00) 160.74 25- 30 3 375,000 0.00 0.22 3 374,167 (25.00) (10.65) 4 418,750 (60.00) 95.22 31- 36 7 157,143 (22.22) (59.30) 9 386,061 28.57 (19.93) 7 482,143 16.67 76.39 37- 42 7 381,929 (30.00) 22.41 10 312,000 11.11 147.81 9 125,904 (25.00) (43.52) 43- 48 8 161,136 (46.67) (39.12) 15 264,667 200.00 (16.24) 5 316,000 (58.33) 116.38 49- 60 18 273,652 5.88 7.00 17 255,739 0.00 (8.81) 17 280,441 (5.56) 67.59 61- 71 5 452,000 (50.00) 117.05 10 208,250 150.00 19.00 4 175,000 (60.00) (37.72) 72- 82 6 133,083 20.00 (67.38) 5 407,958 150.00 78.34 2 228,750 (33.33) 70.50 83- 93 2 306,250 0.00 0.00 0 0 0.00 0.00 1 225,000 (66.67) 14.07 94-104 0 0 0.00 0.00 2 150,000 0.00 361.54 2 32,500 100.00 4549.50 105-115 2 662,500 100.00 155.30 1 259,500 0.00 48.29 1 175,000 (50.00) 141.38 116-126 1 125,000 0.00 0.00 0 0 0.00 0.00 1 500,000 0.00 0.00 138-148 0 0 0.00 0.00 1 10,000 0.00 (88.24) 1 85,000 0.00 0.00
TOTAL 62 277,973 (20.51) (2.60) 78 285,408 34.48 4.98 58 271,864 (32.56) 33.57 A-158 Lapsed Months From Incident to Disposition 2005 Closed Paid Claims - Hospitals
16
15
14
13 12 12
11
10 9 9 8 8
7 6 6 6 6 6 6 6 5 5 5 5 5 5
Number of Closed Paid Claims of Closed Number 5 4 4 4 4 3 3 3 33 3 2 2 2 2 2 2 1 1 1 1 11 1 0 0 0 00 0 0 - 6 7 - 12 13 - 18 19 - 24 25 - 30 31 - 36 37 - 42 43 - 48 49 - 60 61 - 71 72 - 82 83 - 93 Greater than 93 Average Number of Months
Severity 1,2,3,4 Severity 5,6,7,8 Severity 9 A-159 Missouri Department of Insurance, Financial Institutions and Professional Registration Bodily Injury Claim Indemnity Comparisons Hospitals
Severity 1,2,3,4
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 9 5,556 50.00 118.80 6 2,539 (14.29) (76.22) 7 10,678 600.00 408.48 7- 12 12 10,377 0.00 (43.41) 12 18,336 0.00 (39.35) 12 30,234 20.00 76.22 13- 18 8 28,487 33.33 55.24 6 18,350 (14.29) (43.29) 7 32,357 (50.00) 137.85 19- 24 5 40,660 66.67 (34.24) 3 61,833 (40.00) 50.71 5 41,027 (44.44) (26.13) 25- 30 6 36,417 50.00 99.45 4 18,259 (50.00) (1.13) 8 18,467 166.67 159.32 31- 36 4 26,250 (33.33) 105.19 6 12,793 (14.29) (77.56) 7 57,000 0.00 0.00 37- 42 6 55,583 100.00 91.67 3 29,000 (25.00) (76.33) 4 122,500 300.00 308.33 43- 48 2 17,500 (33.33) (62.37) 3 46,500 50.00 (29.81) 2 66,250 0.00 307.69 49- 60 5 915,000 25.00 200.62 4 304,375 0.00 296.66 4 76,734 33.33 (81.87) 61- 71 1 25,000 (50.00) (94.92) 2 492,500 0.00 982.42 2 45,500 0.00 0.00 72- 82 2 84,594 100.00 196.82 1 28,500 0.00 0.00 0 0 0.00 0.00 83- 93 1 75,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 105-115 1 40,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 116-126 0 0 0.00 0.00 2 255,000 0.00 0.00 0 0 0.00 0.00
TOTAL 62 99,708 19.23 42.12 52 70,157 (10.34) 67.02 58 42,006 23.40 (19.68)
Severity 5,6,7,8
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 0 0 0.00 0.00 1 5,000 0.00 0.00 0 0 0.00 0.00 7- 12 0 0 0.00 0.00 5 92,800 0.00 0.00 0 0 0.00 0.00 13- 18 3 969,167 0.00 786.47 3 109,329 0.00 0.00 0 0 0.00 0.00 19- 24 5 147,750 400.00 (68.89) 1 475,000 (66.67) 876.03 3 48,667 200.00 4766.70 25- 30 3 149,000 (25.00) (25.59) 4 200,250 33.33 54.83 3 129,333 0.00 0.00 31- 36 1 75,000 (50.00) (70.85) 2 257,268 (33.33) (81.07) 3 1,358,902 0.00 0.00 37- 42 4 148,750 (50.00) (69.39) 8 485,875 60.00 11.21 5 436,900 (16.67) 223.63 43- 48 6 326,250 50.00 (67.00) 4 988,665 (20.00) 591.37 5 143,000 25.00 (7.59) 49- 60 5 63,000 (37.50) (39.74) 8 104,544 166.67 (54.79) 3 231,246 0.00 131.25 61- 71 6 641,006 200.00 313.55 2 155,000 0.00 (85.12) 2 1,041,667 (50.00) 136.97 72- 82 5 319,286 0.00 0.00 0 0 0.00 0.00 2 820,090 (33.33) 138.28 83- 93 2 750,000 0.00 0.00 0 0 0.00 0.00 2 372,361 100.00 14.57 94-104 0 0 0.00 0.00 2 50,000 100.00 (66.67) 1 150,000 0.00 (62.50) 105-115 2 18,750 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 116-126 1 1,100,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 138-148 1 625,000 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 182-192 0 0 0.00 0.00 1 200,000 0.00 0.00 0 0 0.00 0.00 215-225 2 125,000 0.00 0.00 0 0 0.00 0.00 1 450,000 0.00 0.00
TOTAL 46 347,624 12.20 20.02 41 289,647 36.67 (34.53) 30 442,406 0.00 122.86 A-160 Missouri Department of Insurance, Financial Institutions and Professional Registration Bodily Injury Claim Indemnity Comparisons Hospitals
Severity 9
2005 2005-2004 2004 2004-2003 2003 2003-2002 Lapsed Mths Number of Average Percent Number of Average Percent Number of Average Percent From Incident Paid Indemnity Change of Paid Indemnity Change of Paid Indemnity Change of to Disposition Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity Claims Per Claim Claims Paid Ave Indemnity
0- 6 1 5,919 0.00 (98.31) 1 350,000 0.00 0.00 0 0 0.00 0.00 7- 12 0 0 0.00 0.00 0 0 0.00 0.00 1 542,363 0.00 0.00 13- 18 1 350,000 0.00 0.00 0 0 0.00 0.00 2 450,000 0.00 341.72 19- 24 2 318,750 0.00 (60.40) 2 805,000 100.00 3120.00 1 25,000 (66.67) (80.52) 25- 30 3 425,000 0.00 70.00 3 250,000 50.00 122.22 2 112,500 (66.67) (62.73) 31- 36 6 266,667 100.00 (13.28) 3 307,500 (25.00) 183.74 4 108,375 (33.33) (43.43) 37- 42 3 224,167 (62.50) 8.59 8 206,442 (11.11) (43.02) 9 362,315 800.00 19.77 43- 48 3 470,000 (50.00) 145.22 6 191,667 0.00 (42.50) 6 333,333 500.00 9.29 49- 60 5 213,000 0.00 84.65 5 115,355 (58.33) 5.27 12 109,583 50.00 3.14 61- 71 4 134,375 300.00 (40.28) 1 225,000 (87.50) 16.13 8 193,750 300.00 12.32 72- 82 2 92,500 0.00 0.00 0 0 0.00 0.00 0 0 0.00 0.00 83- 93 0 0 0.00 0.00 2 212,500 100.00 4150.00 1 5,000 (50.00) (96.80) 94-104 0 0 0.00 0.00 0 0 0.00 0.00 1 44,250 0.00 0.00 138-148 0 0 0.00 0.00 1 100,000 0.00 0.00 0 0 0.00 0.00
TOTAL 30 257,947 (6.25) 6.36 32 242,525 (31.91) 10.66 47 219,169 34.29 0.09 A-161
A-162 Section IV Indemnity Analysis by Company
Section IV contains the total number of claims reported to the insurer, total number of closed claims, the number of claims closed with payment, the total indemnity paid (economic + non-economic), the total economic damage paid and the total non-economic damage paid by each company and self- insured hospital reporting closed claim data.
The past three years are recorded separately and the companies are listed in descending order by the number of paid claims.
A-163
A-164 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION COMPANY INDEMNITY ANALYSIS 2005
Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages Company Name To Insurer Reports Claims Amount Amount Amount
INTERMED INSURANCE COMPANY 160 259 53 14,656,456 10,462,879 4,193,577 MISSOURI HOSPITAL PLAN 241 182 59 8,300,415 5,267,164 3,033,251 MEDICAL PROTECTIVE COMPANY 120 178 45 7,661,674 5,095,343 2,566,331 MEDICAL ASSURANCE CO INC THE 244 168 20 4,459,688 1,711,123 2,748,565 MISSOURI PHYSICIANS MUTUAL 531 110 20 3,380,390 1,505,361 1,875,029 DOCTORS COMPANY AN INTERINS EXCHANGE 78 67 17 6,560,431 3,146,003 3,414,428 CHICAGO INSURANCE COMPANY 18 57 39 12,706,107 9,018,607 3,687,500 EVEREST INDEMNITY INSURANCE COMPANY 102 51 2 845,000 246,000 599,000 CURATORS OF THE UNIVERSITY OF MISSOURI 79 47 7 5,853,011 3,700,000 2,153,011 WASHINGTON UNIVERSITY IN ST LOUIS SCHOOL OF MEDICINE 101 45 10 7,881,250 5,900,091 1,981,159 HEALTH CARE INDEMNITY INC 120 40 16 1,348,469 878,419 470,050 PREFERRED PROFESSIONAL INSURANCE COMPANY 35 38 11 1,775,000 1,240,000 535,000 NORTH AMERICAN SPECIALTY INS CO 0 34 2 201,615 1,615 200,000 RECIPROCAL OF AMERICA 0 31 14 3,061,930 1,458,311 1,603,619 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 105 28 4 1,705,158 997,500 707,658 MID CENTURY INSURANCE COMPANY 6 25 8 3,195,000 1,871,000 1,324,000 TRUCK INSURANCE EXCHANGE 21 25 2 1,350,000 421,000 929,000 TIG INSURANCE COMPANY 0 21 5 1,285,000 440,000 845,000 HOSPITAL CORPORATION OF AMERICA 1 18 13 2,683,500 1,611,268 1,072,232 ST LUKES HOSPITAL - KANSAS CITY 23 17 3 4,173,607 3,510,500 663,107 AMERICAN CASUALTY CO OF READING PA 32 17 5 936,301 467,500 468,801 COLUMBIA CASUALTY COMPANY 7 15 6 3,334,500 1,564,500 1,770,000 PHARMACISTS MUTUAL INSURANCE COMPANY 17 15 11 197,896 50,196 147,700 CONTINENTAL CASUALTY COMPANY 3 14 7 825,000 354,000 471,000 HEARTLAND HEALTH 37 14 8 600,000 336,000 264,000 NCMIC INSURANCE COMPANY 18 13 6 361,256 180,628 180,628 CINCINNATI INS CO THE 12 10 7 1,511,113 89,104 1,422,009 MEDICAL LIABILITY ALLIANCE 55 10 4 223,184 96,633 126,551 ST PAUL FIRE & MARINE INSURANCE CO 4 10 5 709,500 286,850 422,650 ST JOHNS REGIONAL MEDICAL CENTER 13 10 4 1,355,000 677,500 677,500 NEW LIBERTY HOSPITAL DISTRICT 2 7 4 149,699 0 149,699 COX MEDICAL CENTER 7 7 6 2,352,500 747,022 1,605,478 EVANSTON INSURANCE COMPANY 4 6 4 1,916,118 1,065,118 851,000 NORTH KANSAS CITY HOSPITAL 10 6 2 200,000 90,000 110,000 MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 30 6 0 0 0 0 PODIATRY INSURANCE COMPANY OF AMERICA A MUTUAL COMPANY 12 5 4 353,950 83,662 270,288 COMMONWEALTH INSURANCE COMPANY 0 5 0 0 0 0 TIG SPECIALTY INSURANCE CO 2 5 3 2,300,312 2,100,312 200,000 KANSAS MEDICAL MUTUAL INS CO 32 5 2 825,000 412,500 412,500 PREFERRED PHYSICIANS MEDICAL RRG INC 14 5 0 0 0 0 LLOYDS SYNDICATE #2003 0 5 4 774,800 474,800 300,000 ZURICH AMERICAN INSURANCE COMPANY 0 5 5 2,667,500 740,500 1,927,000 OMS NATIONAL INSURANCE COMPANY RRG 8 4 0 0 0 0 LEXINGTON INSURANCE COMPANY 15 4 1 75,000 12,000 63,000 MISSOURI PHYSICIANS ASSOCIATES 0 4 2 268,500 120,000 148,500 ACE AMERICAN INSURANCE COMPANY 1 4 4 105,052 10,000 95,052 PROFESSIONAL UNDERWRITERS LIABILITY INS 0 3 2 845,000 837,097 7,903 CHURCH MUTUAL INSURANCE COMPANY 0 3 1 115,500 0 115,500 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PENNSYLV 13 3 3 352,500 40,500 312,000 HUDSON SPECIALTY INSURANCE COMPANY 33 3 0 0 0 0 TRAVELERS INDEMNITY COMPANY 1 3 3 309,750 206,938 102,812 GENERAL STAR INDEMNITY COMPANY 0 2 1 48,860 0 48,860 PACIFIC INSURANCE COMPANY 0 2 1 400,000 100,000 300,000 DEPAUL HEALTH CENTER 0 2 2 1,725,000 988,000 737,000 ST LOUIS UNIVERSITY MEDICAL CENTER 0 2 2 675,000 0 675,000 COMMUNITY HEALTH SYSTEMS INC 0 2 2 105,000 0 105,000 OHIC INSURANCE COMPANY 1 2 0 0 0 0 PHICO INSURANCE COMPANY 0 2 1 4,188 4,188 0 ST PAUL GUARDIAN INSURANCE COMPANY 0 2 1 170,000 170,000 0 CONTINENTAL INSURANCE COMPANY THE 2 2 0 0 0 0 GULF INSURANCE COMPANY 0 2 0 0 0 0 FORTRESS INSURANCE COMPANY 7 2 0 0 0 0 AMERICAN EQUITY INSURANCE CO 0 1 0 0 0 0
A-165 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION COMPANY INDEMNITY ANALYSIS 2005
Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages Company Name To Insurer Reports Claims Amount Amount Amount
TRUMAN MEDICAL CENTER 0 1 0 0 0 0 EXECUTIVE RISK INDEMNITY INC 0 1 1 350,000 0 350,000 PROVIDERS INS CO 0 1 1 50,000 28,000 22,000 GRANITE STATE INSURANCE COMPANY 1 1 1 15,000 15,000 0 TRAVELERS CASUALTY AND SURETY CO 0 1 1 730,000 151,000 579,000 ST PAUL MERCURY INSURANCE COMPANY 0 1 1 57,500 22,000 35,500 PROFESSIONAL SOLUTIONS INSURANCE COMPANY 9 1 0 0 0 0 ST LUKES HEALTH SYSTEM RISK RETENTION GROUP 4 1 0 0 0 0 EMERGENCY PHYSICIANS INSURANCE CO RRG 4 1 0 0 0 0 AMERICAN INTERNATIONAL SPECIALTY LINES 3 0 0 0 0 0 DARWIN NATIONAL ASSURANCE COMPANY 4 0 0 0 0 0 AMERICAN ALTERNATIVE INS CORP 1 0 0 0 0 0 AMERICAN INSURANCE COMPANY THE 1 0 0 0 0 0 NATIONAL CASUALTY COMPANY 1 0 0 0 0 0 PACO ASSURANCE COMPANY INC 4 0 0 0 0 0 CAPITOL SPECIALTY INSURANCE CORPORATION 1 0 0 0 0 0 ISMIE MUTUAL INSURANCE COMPANY 6 0 0 0 0 0 MISSOURI MEDICAL MALPRACTICE JOINT UNDERWRITING ASSOCIATION 8 0 0 0 0 0 EMERGENCY MEDICINE RISK RETENTION GROUP INC 1 0 0 0 0 0
TOTAL 2,425 1,699 478 121,079,180 71,003,732 50,075,448
A-166 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION COMPANY INDEMNITY ANALYSIS 2004
Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages Company Name To Insurer Reports Claims Amount Amount Amount
INTERMED INSURANCE COMPANY 162 297 51 16,044,500 12,648,171 3,396,329 MEDICAL ASSURANCE CO INC THE 179 215 24 7,487,244 2,916,698 4,570,546 CHICAGO INSURANCE COMPANY 39 186 85 23,085,071 13,690,271 9,394,800 MEDICAL PROTECTIVE COMPANY 165 148 28 5,712,435 4,315,047 1,397,388 MISSOURI HOSPITAL PLAN 167 135 53 8,375,345 4,285,255 4,090,090 CURATORS OF THE UNIVERSITY OF MISSOURI 59 70 25 5,021,750 1,777,168 3,244,582 RECIPROCAL OF AMERICA 4 66 22 4,300,144 2,291,880 2,008,264 DOCTORS COMPANY AN INTERINS EXCHANGE 80 59 9 2,186,419 2,171,396 15,023 TRUCK INSURANCE EXCHANGE 19 50 4 970,000 110,000 860,000 MID CENTURY INSURANCE COMPANY 21 44 5 2,375,981 651,981 1,724,000 EVEREST INDEMNITY INSURANCE COMPANY 46 38 7 1,653,000 350,000 1,303,000 NORTH AMERICAN SPECIALTY INS CO 6 33 6 545,487 290,000 255,487 MISSOURI PHYSICIANS MUTUAL 159 31 9 1,649,000 1,435,159 213,841 HOSPITAL CORPORATION OF AMERICA 1 31 16 1,735,500 1,165,418 570,082 HEALTH CARE INDEMNITY INC 74 28 6 392,457 221,399 171,058 AMERICAN CASUALTY CO OF READING PA 13 27 7 1,222,342 706,750 515,592 COLUMBIA CASUALTY COMPANY 6 24 10 2,479,790 825,170 1,654,620 PREFERRED PROFESSIONAL INSURANCE COMPANY 15 24 10 3,788,519 3,788,519 0 ST PAUL FIRE & MARINE INSURANCE CO 5 24 12 11,371,140 10,064,640 1,306,500 CONTINENTAL CASUALTY COMPANY 3 23 8 1,866,703 660,250 1,206,453 PHARMACISTS MUTUAL INSURANCE COMPANY 18 22 12 268,312 91,103 177,209 NCMIC INSURANCE COMPANY 18 21 5 273,125 136,563 136,562 TIG INSURANCE COMPANY 7 19 2 900,000 900,000 0 CINCINNATI INS CO THE 13 15 7 1,062,369 11,375 1,050,994 ST LUKES HOSPITAL - KANSAS CITY 19 12 5 1,817,000 1,001,674 815,326 OHIC INSURANCE COMPANY 1 12 6 1,240,000 0 1,240,000 FIREMANS FUND INSURANCE COMPANY 3 12 7 1,092,500 356,634 735,866 PHICO INSURANCE COMPANY 0 11 3 29,434 29,434 0 LEXINGTON INSURANCE COMPANY 4 10 3 307,000 152,047 154,953 TIG SPECIALTY INSURANCE CO 0 10 7 1,826,725 1,596,725 230,000 RECIPROCAL ALLIANCE RISK RET GROUP THE 0 9 0 0 0 0 TRANSPORTATION INSURANCE COMPANY 0 9 5 1,295,000 261,000 1,034,000 ST JOHNS REGIONAL MEDICAL CENTER 6 9 4 1,450,000 860,000 590,000 NEW LIBERTY HOSPITAL DISTRICT 9 8 3 77,909 0 77,909 PODIATRY INSURANCE COMPANY OF AMERICA A MUTUAL COMPANY 10 7 4 402,500 111,476 291,024 KANSAS MEDICAL MUTUAL INS CO 18 7 1 100,896 55,493 45,403 COX MEDICAL CENTER 11 7 7 3,030,000 678,191 2,351,809 MEDICAL LIABILITY ALLIANCE 32 6 1 390,000 218,400 171,600 NORTH KANSAS CITY HOSPITAL 3 6 2 35,000 1,500 33,500 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 43 6 0 0 0 0 MISSOURI PHYSICIANS ASSOCIATES 1 5 3 358,000 127,500 230,500 PREFERRED PHYSICIANS MEDICAL RRG INC 9 5 0 0 0 0 ZURICH AMERICAN INSURANCE COMPANY 0 5 5 4,486,250 2,166,250 2,320,000 OMS NATIONAL INSURANCE COMPANY RRG 5 4 1 10,000 0 10,000 EVANSTON INSURANCE COMPANY 4 4 3 345,832 71,196 274,636 INTERSTATE FIRE & CASUALTY COMPANY 0 4 4 2,541,000 2,255,000 286,000 AMERICAN INTERNATIONAL SPECIALTY LINES 1 4 1 985,596 0 985,596 CONTINENTAL INSURANCE COMPANY THE 0 4 3 2,125,000 1,664,250 460,750 KNEIBERT CLINIC L.L.C. 0 4 0 0 0 0 HEARTLAND HEALTH 22 4 3 62,115 33,278 28,837 ISMIE MUTUAL INSURANCE COMPANY 1 4 3 312,500 20,000 292,500 PACIFIC INSURANCE COMPANY 1 3 1 35,000 20,000 15,000 PROFESSIONAL UNDERWRITERS LIABILITY INS 3 3 2 145,000 145,000 0 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PENNSYL 2 3 2 123,500 0 123,500 AMERICAN EQUITY INSURANCE CO 0 2 1 15,000 15,000 0 GULF INSURANCE COMPANY 0 2 2 53,500 13,200 40,300 RELIANCE INSURANCE COMPANY 0 2 0 0 0 0 ST PAUL MERCURY INSURANCE COMPANY 0 2 1 250,000 45,000 205,000 GENERAL STAR INDEMNITY COMPANY 0 1 0 0 0 0 COMMONWEALTH INSURANCE COMPANY 0 1 1 490,000 490,000 0 SPECTRUM EMERGENCY CARE INC 0 1 1 55,000 0 55,000 CLARENDON NATIONAL INS CO 0 1 1 144,500 0 144,500 COMMERCIAL CASUALTY INSURANCE COMPANY 0 1 1 150,000 150,000 0
A-167 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION COMPANY INDEMNITY ANALYSIS 2004
Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages Company Name To Insurer Reports Claims Amount Amount Amount
EXECUTIVE RISK INDEMNITY INC 0 1 1 750,000 0 750,000 CHURCH MUTUAL INSURANCE COMPANY 0 1 0 0 0 0 GRANITE STATE INSURANCE COMPANY 0 1 1 500,000 250,000 250,000 FORTRESS INSURANCE COMPANY 1 1 1 20,000 8,000 12,000 ACE AMERICAN INSURANCE COMPANY 2 0 0 0 0 0 ST PAUL GUARDIAN INSURANCE COMPANY 2 0 0 0 0 0 HUDSON SPECIALTY INSURANCE COMPANY 7 0 0 0 0 0 TRAVELERS INDEMNITY COMPANY 1 0 0 0 0 0 ST LUKES HEALTH SYSTEM RISK RETENTION GROUP 8 0 0 0 0 0 EMERGENCY PHYSICIANS INSURANCE CO RRG 2 0 0 0 0 0 CATLIN INSURANCE COMPANY LTD 3 0 0 0 0 0 APPLIED MEDICO-LEGAL SOLUTIONS RRG INC 2 0 0 0 0 0 MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 2 0 0 0 0 0 MISSOURI MEDICAL MALPRACTICE JOINT UNDERWRITING ASSOCIATION 1000 0 0 WASHINGTON UNIVERSITY IN ST LOUIS SCHOOL OF MEDICINE 22 0 0 0 0 0
TOTAL 1,540 1,844 523 131,818,390 78,300,461 53,517,929
A-168 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION COMPANY INDEMNITY ANALYSIS 2003
Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages Company Name To Insurer Reports Claims Amount Amount Amount
CHICAGO INSURANCE COMPANY 109 260 65 18,963,596 10,674,722 8,288,874 MEDICAL PROTECTIVE COMPANY 217 194 50 10,269,508 6,522,629 3,746,879 INTERMED INSURANCE COMPANY 351 192 39 10,014,574 8,163,715 1,850,859 MEDICAL ASSURANCE CO INC THE 194 182 44 8,525,976 5,734,520 2,791,456 RECIPROCAL OF AMERICA 2 112 20 1,762,069 854,109 907,960 MISSOURI HOSPITAL PLAN 197 76 46 8,318,023 3,861,128 4,456,895 PHICO INSURANCE COMPANY 0 65 28 3,322,239 3,322,239 0 CURATORS OF THE UNIVERSITY OF MISSOURI 78 61 15 1,994,948 790,371 1,204,577 DOCTORS COMPANY AN INTERINS EXCHANGE 78 49 4 623,755 344,654 279,101 COLUMBIA CASUALTY COMPANY 5 45 21 3,878,500 1,155,000 2,723,500 CONTINENTAL CASUALTY COMPANY 10 38 17 3,936,000 1,609,500 2,326,500 HOSPITAL CORPORATION OF AMERICA 10 33 12 735,168 651,936 83,232 SSM HEALTH CARE SYSTEM 1 31 20 7,324,248 4,686,705 2,637,543 ST PAUL FIRE & MARINE INSURANCE CO 13 30 9 3,113,186 2,465,877 647,309 TRUCK INSURANCE EXCHANGE 42 28 5 297,500 26,776 270,724 PREFERRED PROFESSIONAL INSURANCE COMPANY 23 25 8 3,775,000 3,107,200 667,800 NORTH AMERICAN SPECIALTY INS CO 28 25 0 0 0 0 ST LUKES HOSPITAL - KANSAS CITY 16 21 9 559,750 313,460 246,290 CINCINNATI INS CO THE 10 20 16 2,834,522 429,237 2,405,285 MISSOURI PHYSICIANS ASSOCIATES 4 17 5 2,156,793 997,680 1,159,113 NCMIC INSURANCE COMPANY 24 16 4 151,700 67,100 84,600 MID CENTURY INSURANCE COMPANY 58 16 1 38,851 0 38,851 PHARMACISTS MUTUAL INSURANCE COMPANY 19 15 10 128,576 77,726 50,850 AMERICAN CASUALTY CO OF READING PA 19 15 5 977,500 285,100 692,400 OHIC INSURANCE COMPANY 8 14 7 947,500 25,917 921,583 PODIATRY INSURANCE COMPANY OF AMERICA A MUTUAL COMPANY 9 13 3 1,110,000 287,745 822,255 ST JOHNS REGIONAL MEDICAL CENTER 13 12 6 651,000 85,000 566,000 PACIFIC INSURANCE COMPANY 0 11 5 2,250,000 1,993,600 256,400 TRANSPORTATION INSURANCE COMPANY 0 10 5 672,500 320,000 352,500 TIG INSURANCE COMPANY 27 9 4 2,362,000 1,662,000 700,000 ST PAUL MERCURY INSURANCE COMPANY 0 7 4 139,059 24,059 115,000 EVANSTON INSURANCE COMPANY 5 6 1 278,682 212,040 66,642 TIG SPECIALTY INSURANCE CO 7 6 2 115,000 0 115,000 EXECUTIVE RISK INDEMNITY INC 2 6 5 882,490 0 882,490 FIREMANS FUND INSURANCE COMPANY 3 6 5 845,000 150,000 695,000 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PENNSYLV 2 6 5 2,025,000 1,342,939 682,061 ZURICH AMERICAN INSURANCE COMPANY 1 6 6 1,196,500 0 1,196,500 COX MEDICAL CENTER 12 6 6 3,528,000 1,218,000 2,310,000 LEXINGTON INSURANCE COMPANY 7 5 4 415,312 2,812 412,500 PREFERRED PHYSICIANS MEDICAL RRG INC 10 5 0 0 0 0 MISSOURI PROFESSIONAL LIABILITY INSASSO 1 4 1 450,000 252,000 198,000 MEDICAL LIABILITY ALLIANCE 7 3 2 156,667 69,833 86,834 NORTH KANSAS CITY HOSPITAL 8 3 2 180,000 105,000 75,000 HEALTH CARE INDEMNITY INC 36 3 1 3,750 0 3,750 RECIPROCAL ALLIANCE RISK RET GROUP THE 0 2 0 0 0 0 NEW LIBERTY HOSPITAL DISTRICT 8 2 0 0 0 0 CHURCH MUTUAL INSURANCE COMPANY 0 2 2 375,000 0 375,000 ST PAUL GUARDIAN INSURANCE COMPANY 0 2 2 625,000 304,000 321,000 GULF INSURANCE COMPANY 1 2 1 19,500 10,000 9,500 NATIONAL FIRE INS CO OF HARTFORD 0 2 2 35,970 15,970 20,000 CLARENDON AMERICA INSURANCE COMPANY 1 1 1 197,500 0 197,500 WESTERN INDEMNITY INSURANCE COMPANY 0 1 0 0 0 0 AMERICAN INTERNATIONAL SPECIALTY LINES 4 1 1 150,000 5,000 145,000 ACE AMERICAN INSURANCE COMPANY 2 1 1 40,000 5,000 35,000 CONTINENTAL INSURANCE COMPANY THE 1 1 0 0 0 0 ILLINOIS NATIONAL INSURANCE COMPANY 0 1 1 250,000 250,000 0 EVEREST INDEMNITY INSURANCE COMPANY 38 1 0 0 0 0 AMERICAN EQUITY SPECIALTY INSURANCE COMPANY 0 1 1 366,000 293,000 73,000 OMS NATIONAL INSURANCE COMPANY RRG 2 0 0 0 0 0 GENERAL STAR INDEMNITY COMPANY 4 0 0 0 0 0 COMMONWEALTH INSURANCE COMPANY 1 0 0 0 0 0 PROFESSIONAL UNDERWRITERS LIABILITY INS 2 0 0 0 0 0 SELF-INSURED TRUST OF HEALTH MIDWEST 2 0 0 0 0 0
A-169 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION COMPANY INDEMNITY ANALYSIS 2003
Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages Company Name To Insurer Reports Claims Amount Amount Amount
COMMUNITY HEALTH SYSTEMS INC 1 0 0 0 0 0 TRAVELERS PROPERTY CASUALTY INS CO 2 0 0 0 0 0 KANSAS MEDICAL MUTUAL INS CO 12 0 0 0 0 0 TRAVELERS INDEMNITY COMPANY 3 0 0 0 0 0 LLOYDS SYNDICATE #2003 5 0 0 0 0 0 HEARTLAND HEALTH 7 0 0 0 0 0 MISSOURI PHYSICIANS MUTUAL 26 0 0 0 0 0 ISMIE MUTUAL INSURANCE COMPANY 2 0 0 0 0 0 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 2 0 0 0 0 0 ST LUKES HEALTH SYSTEM RISK RETENTION GROUP 1 0 0 0 0 0 WASHINGTON UNIVERSITY IN ST LOUIS SCHOOL OF MEDICINE 24 0 0 0 0 0
TOTAL 1,817 1,727 539 113,969,412 64,775,299 49,194,113
A-170 Section V Indemnity Analysis by Professional Specialty
This exhibit contains the total number of claims reported to the insurer, total number of closed claims, the number of claims closed with payment, the total indemnity paid (economic + non- economic), the total economic damage paid and total non-economic damage paid by profession specialty code. The profession specialty code is a uniform rating/underwriting code developed by Insurance Services Office (ISO).
The data are ranked in descending order by the total number of paid claims closed for the past three years (2003 through 2005).
A-171
A-172 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION PROFESSION SPECIALTY ANALYSIS
ALL COMPANIES FOR YEAR: 2005 Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages PROFESSION SPECIALTY To Insurer Reports Claims Amount Amount Amount
80612 HOSPITAL NOT PROFIT BED 342 289 107 31,072,495 19,412,738 11,659,757 80999 ADD CHG CORP/PARTNERSHIP LIABILITY M.D. 351 235 49 11,884,254 7,959,858 3,924,396 80257 INTERNAL MED NO SURGERY M.D. 105 76 20 4,683,500 2,544,000 2,139,500 80211 DENTIST NOC 54 67 12 916,522 447,677 468,845 80268 PHYSICIANS NO SURGERY NOC M.D. 75 65 6 2,775,740 1,475,740 1,300,000 80153 SURGERY OBSTETRICS GYNECOLOGY M.D. 101 62 19 8,701,500 5,905,000 2,796,500 80143 SURGERY GENERAL NOC M.D. 95 55 25 9,346,398 6,222,700 3,123,698 93215 HOSPITAL GOVERNMENT BED 58 55 20 3,516,326 2,487,484 1,028,842 80420 FAMILY PHYSICIAN NO SURGERY M.D. 63 52 9 1,668,429 584,800 1,083,629 80154 SURGERY ORTHOPEDIC M.D. 63 50 11 2,605,000 1,353,000 1,252,000 80611 HOSPITAL FOR PROFIT BED 65 43 19 2,893,469 1,741,289 1,152,180 80151 ANESTHESIOLOGY M.D. 43 35 6 2,110,000 738,000 1,372,000 80964 NURSES - RNS 73 31 11 2,076,920 986,667 1,090,253 80253 RADIOLOGY DIAGNOSTIC NO SURGERY M.D. 33 30 4 674,800 224,800 450,000 80102 EMERGENCY MED NO SURGERY M.D. 28 25 9 1,751,500 984,680 766,820 84268 PHYSICIANS NO SURGERY NOC D.O. 24 24 2 45,000 45,000 0 80998 NURSE NOC 19 22 3 165,000 53,000 112,000 80152 SURGERY NEUROLOGY M.D. 24 19 5 2,254,472 1,180,472 1,074,000 59112 PHARMACISTS 18 18 12 1,097,896 395,196 702,700 80281 CARDIOVASCULAR DISEASE MINOR SURG M.D. 26 18 2 700,000 360,000 340,000 84420 FAMILY PHYSICIAN NO SURGERY D.O. 37 18 4 2,049,710 1,400,000 649,710 80280 RADIOLOGY DIAGNOSTIC MINOR SURG M.D. 20 17 4 1,574,500 307,500 1,267,000 80156 SURGERY PLASTIC M.D. 25 16 3 142,000 23,575 118,425 80284 INTERNAL MED MINOR SURG M.D. 27 16 4 545,000 320,000 225,000 80176 PHYS OR SURG MAJOR SURGERY M.D. GROUP 5 37 15 2 137,500 80,000 57,500 80924 NURSE HOME NOT PROFIT BED 3 14 8 1,237,729 238,000 999,729 80145 SURGERY UROLOGICAL M.D. 25 13 5 893,122 450,622 442,500 80261 NEUROLOGY NO SURGERY M.D. 4 13 2 210,000 210,000 0 80993 CHIROPODIST 19 13 8 693,700 300,600 393,100 80294 PHYSICIAN MINOR SURGERY NOC M.D. 14 12 0 0 0 0 80410 CHIROPRACTORS 15 12 6 193,131 80,628 112,503 80144 SURGERY THORACIC M.D. 18 11 2 124,600 0 124,600 80159 SURGERY OTORHINOLARYNGOLOGY M.D. 8 11 5 484,000 213,500 270,500 80249 PSYCHIATRY M.D. 46 11 1 100,000 100,000 0 84154 SURGERY ORTHOPEDIC D.O. 8 11 1 17,500 2,500 15,000 80235 PHYSIATRY M.D. 11 10 1 112,500 90,000 22,500 80117 SURGERY GENERAL PRACTICE M.D. 12 9 3 764,374 756,471 7,903 80210 DENTIST ORAL SURGERY 14 9 3 742,500 415,500 327,000 80260 NEPHROLOGY NO SURGERY M.D. 10 9 1 500,000 500,000 0 80167 SURGERY GYNECOLOGY M.D. 7 8 2 1,075,000 675,000 400,000 80266 PATHOLOGY NO SURGERY M.D. 14 8 2 80,000 24,000 56,000 80421 FAMILY PHYSICIAN MINOR SURG M.D. 29 8 4 951,000 106,050 844,950 80146 SURGERY VASCULAR M.D. 4 7 3 1,330,000 430,000 900,000 84257 INTERNAL MED NO SURGERY D.O. 9 7 4 630,000 180,000 450,000 80255 CARDIOVASCULAR DISEASE NO SURGERY M.D. 2 6 2 300,000 0 300,000 84102 EMERGENCY MED NO SURGERY D.O. 3 6 2 1,025,000 446,000 579,000 84421 FAMILY PHYSICIAN MINOR SURG D.O. 12 6 2 227,500 206,500 21,000 80157 EMERGENCY MED MAJOR SURG M.D. 9 5 1 162,500 0 162,500 80241 GASTROENTEROLOGY NO SURGERY M.D. 8 5 3 715,000 689,000 26,000 80246 INFECT DISEASE NO SURGERY M.D. 1 5 1 500,000 0 500,000 80274 GASTROENTEROLOGY MINOR SURG M.D. 19 5 0 0 0 0 80422 PHYS NO MAJ SURG ANGIOGRAPHY M.D. 6 5 4 745,000 455,000 290,000 80923 NURSE HOME FOR PROFIT BED 18 5 3 773,884 68,384 705,500 80963 NURSES - LPNS 20 5 0 0 0 0 80114 SURGERY OPHTHALMOLOGY M.D. 5 4 1 150,000 150,000 0 80244 GYNECOLOGY NO SURGERY M.D. 5 4 0 0 0 0 80245 HEMATOLOGY NO SURGERY M.D. 4 4 0 0 0 0 80267 PEDIATRICS NO SURGERY M.D. 16 4 1 1,000,000 500,000 500,000 80283 INTENSIVE CARE MEDICINE M.D. 8 4 1 1,000,000 1,000,000 0 80613 CLINICS OUTP ONLY FOR PROFIT VISITS 20 4 1 5,000 0 5,000 84143 SURGERY GENERAL NOC D.O. 6 4 1 343,188 43,488 299,700 80115 SURGERY COLON AND RECTAL M.D. 4 3 2 1,976,118 1,826,118 150,000 80141 SURGERY CARDIAC M.D. 9 3 1 500,000 348,500 151,500 80150 SURGERY CARDIOVASCULAR DISEASE M.D. 6 3 3 514,091 328,333 185,758
A-173 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION PROFESSION SPECIALTY ANALYSIS
ALL COMPANIES FOR YEAR: 2005 Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages PROFESSION SPECIALTY To Insurer Reports Claims Amount Amount Amount
80278 HEMATOLOGY MINOR SURG M.D. 4 3 0 0 0 0 80617 HOSPITAL NOT PROFIT VISITS 3 3 2 310,000 130,200 179,800 80941 EMERGENCY EMTS 1 3 1 9,500 5,600 3,900 80960 NURSE ANESTHETISTS 6 3 0 0 0 0 80994 OPTOMETRISTS 2 3 0 0 0 0 80104 SURGERY GASTROENTEROLOGY M.D. 2 2 0 0 0 0 80155 SURGERY PLASTIC-OTORHINOLARYNGOLOGY MD 5 2 0 0 0 0 80169 SURGERY HAND M.D. 3 2 1 60,000 60,000 0 80233 OCCUPATIONAL MED M.D. 4 2 0 0 0 0 80277 GYNECOLOGY MINOR SURG M.D. 1 2 1 730,000 151,000 579,000 84153 SURGERY OBSTETRICS GYNECOLOGY D.O. 17 2 0 0 0 0 84249 PSYCHIATRY D.O. 2 2 1 50,000 0 50,000 99999 HMO RELATED 1 2 1 1,700,312 1,700,312 0 80116 PHYSICIAN OR SURGEONS ASSISTANTS M.D. 0 1 0 0 0 0 80129 ADD CHG EMPLOYED PHYSICIAN ASSISTANT M.D. 1 1 1 12,500 500 12,000 80166 SURGERY ABDOMINAL M.D. 0 1 0 0 0 0 80172 PHYS OR SURG MAJOR SURGERY M.D. 1 1 0 0 0 0 80177 ADD CHG EMPLOYED PHYSICIAN M.D. 2 1 0 0 0 0 80213 DENTIST EMPLOYED NOC 0 1 0 0 0 0 80256 DERMATOLOGY NO SURGERY M.D. 4 1 0 0 0 0 80263 OPHTHALMOLOGY NO SURGERY M.D. 0 1 1 65,000 65,000 0 80265 OTORHINOLARYNGOLOGY NO SURGERY M.D. 3 1 0 0 0 0 80269 PULMONARY DISEASE NO SURGERY M.D. 6 1 0 0 0 0 80282 DERMATOLOGY MINOR SURGERY M.D. 1 1 0 0 0 0 80285 LARYNGOLOGY MINOR SURG M.D. 0 1 1 250,000 50,000 200,000 80289 OPHTHALMOLOGY MINOR SURG M.D. 6 1 0 0 0 0 80293 PEDIATRICS MINOR SURG M.D. 7 1 1 162,500 0 162,500 80425 PHYS NO MAJ SURG LASERS THERAPY M.D. 2 1 1 87,500 80,000 7,500 80449 PHYS NO MAJ SURG RADIOPAQUE DYE INJECTION MD 1 1 1 1,000,000 500,000 500,000 80711 MEDICAL LABORATORY TECHNICIANS 0 1 1 200,000 0 200,000 80715 MEDICAL OR X-RAY LABORATORY 0 1 0 0 0 0 84145 SURGERY UROLOGICAL D.O. 0 1 0 0 0 0 84151 ANESTHESIOLOGY D.O. 11 1 1 200,000 35,000 165,000 84152 SURGERY NEUROLOGY D.O. 0 1 0 0 0 0 84157 EMERGENCY MED MAJOR SURG D.O. 5 1 1 87,500 43,750 43,750 84176 PHYS OR SURG MAJOR SURGERY D.O. GROUP 5 5 1 0 0 0 0 84177 ADD CHG EMPLOYED PHYSICIAN D.O. 0 1 1 100,000 0 100,000 84261 NEUROLOGY NO SURGERY D.O. 0 1 0 0 0 0 84277 GYNECOLOGY MINOR SURG D.O. 0 1 1 15,000 15,000 0 84278 HEMATOLOGY MINOR SURG D.O. 6 1 0 0 0 0 84422 PHYS NO MAJ SURG ANGIOGRAPHY D.O. 2 1 1 375,000 0 375,000 84999 ADD CHG CORP/PARTNERSHIP LIABILITY D.O. 0 1 1 200,000 100,000 100,000 80162 ADD CHG INSURED PHYS SHOCK THERAPY M.D. 2 0 0 0 0 0 80163 ADD CHG EMPLOYED PHYS RADIATION THERAPY M.D. 1 0 0 0 0 0 80168 SURGERY OBSTETRICS M.D. 1 0 0 0 0 0 80212 DENTIST EMPLOYED ORAL SURGERY 1 0 0 0 0 0 80231 GEN PREVENTIVE MED NO SURG M.D. 2 0 0 0 0 0 80237 DIABETES NO SURGERY M.D. 1 0 0 0 0 0 80238 ENDOCRINOLOGY NO SURGERY M.D. 2 0 0 0 0 0 80240 FORENSIC MEDICINE M.D. 1 0 0 0 0 0 80243 GERIATRICS NO SURGERY M.D. 2 0 0 0 0 0 80250 PSYCHOANALYSIS M.D. 2 0 0 0 0 0 80254 ALLERGY M.D. 1 0 0 0 0 0 80259 NEOPLASTIC DISEASE NO SURGERY M.D. 2 0 0 0 0 0 80287 NEPHROLOGY MINOR SURG M.D. 2 0 0 0 0 0 80288 NEUROLOGY MINOR SURG M.D. 1 0 0 0 0 0 80431 PHYS NO MAJ SURG SHOCK THERAPY M.D. 3 0 0 0 0 0 80446 PHYS NO MAJ SURG NEEDLE BIOPSY M.D. 1 0 0 0 0 0 80944 EMPLOYED OPTOMETRISTS 1 0 0 0 0 0 80945 EMPLOYED PHYSIOTHERAPISTS 1 0 0 0 0 0 80950 PARTNERSHIP LIABILITY CHIROPODIST 2 0 0 0 0 0 84144 SURGERY THORACIC D.O. 1 0 0 0 0 0 84155 SURGERY PLASTIC-OTORHINOLARYNGOLOGY DO 2 0 0 0 0 0 84167 SURGERY GYNECOLOGY D.O. 2 0 0 0 0 0
A-174 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION PROFESSION SPECIALTY ANALYSIS
ALL COMPANIES FOR YEAR: 2005 Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages PROFESSION SPECIALTY To Insurer Reports Claims Amount Amount Amount
84172 PHYS OR SURG MAJOR SURGERY D.O. 1 0 0 0 0 0 84235 PHYSICAL MED AND REHABILITATION D.O. 1 0 0 0 0 0 84241 GASTROENTEROLOGY NO SURGERY D.O. 2 0 0 0 0 0 84274 GASTROENTEROLOGY MINOR SURG D.O. 1 0 0 0 0 0 84280 RADIOLOGY DIAGNOSTIC MINOR SURG D.O. 1 0 0 0 0 0 84281 CARDIOVASCULAR DISEASE MINOR SURG D.O. 3 0 0 0 0 0 84284 INTERNAL MED MINOR SURG D.O. 5 0 0 0 0 0 84291 OTORHINOLARYNGOLOGY MINOR SURG D.O. 1 0 0 0 0 0 84293 PEDIATRICS MINOR SURG D.O. 2 0 0 0 0 0 84453 OUTPATIENT SURGICAL FACILITY OSTEOPATHIC 1 0 0 0 0 0 93216 HOSPITAL GOVERNMENT VISITS 2 0 0 0 0 0
TOTAL 2,425 1,699 478 121,079,180 71,003,732 50,075,448
A-175 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION PROFESSION SPECIALTY ANALYSIS
ALL COMPANIES FOR YEAR: 2004 Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages PROFESSION SPECIALTY To Insurer Reports Claims Amount Amount Amount
80999 ADD CHG CORP/PARTNERSHIP LIABILITY M.D. 220 337 62 20,983,859 12,458,813 8,525,046 80612 HOSPITAL NOT PROFIT BED 231 242 97 20,155,665 10,969,360 9,186,305 80268 PHYSICIANS NO SURGERY NOC M.D. 49 90 16 4,667,750 3,488,000 1,179,750 80153 SURGERY OBSTETRICS GYNECOLOGY M.D. 46 66 17 8,337,000 6,826,250 1,510,750 93215 HOSPITAL GOVERNMENT BED 61 66 22 2,860,439 1,432,165 1,428,274 80257 INTERNAL MED NO SURGERY M.D. 75 61 12 3,888,019 3,342,778 545,241 80143 SURGERY GENERAL NOC M.D. 58 59 27 7,594,362 3,603,233 3,991,129 80154 SURGERY ORTHOPEDIC M.D. 40 56 15 3,699,417 1,385,614 2,313,803 80211 DENTIST NOC 86 45 9 129,065 64,365 64,700 80420 FAMILY PHYSICIAN NO SURGERY M.D. 56 41 9 1,506,057 1,221,707 284,350 80253 RADIOLOGY DIAGNOSTIC NO SURGERY M.D. 24 39 5 1,060,000 786,401 273,599 80152 SURGERY NEUROLOGY M.D. 9 33 7 2,656,000 1,925,000 731,000 84268 PHYSICIANS NO SURGERY NOC D.O. 16 33 6 1,918,083 403,070 1,515,013 80151 ANESTHESIOLOGY M.D. 34 32 6 2,542,373 2,542,373 0 80964 NURSES - RNS 18 29 8 640,841 215,955 424,886 80998 NURSE NOC 7 24 10 1,296,659 491,750 804,909 59112 PHARMACISTS 22 23 13 269,812 92,603 177,209 80102 EMERGENCY MED NO SURGERY M.D. 18 22 6 2,297,588 1,580,070 717,518 80114 SURGERY OPHTHALMOLOGY M.D. 2 22 9 2,292,500 957,850 1,334,650 80924 NURSE HOME NOT PROFIT BED 7 22 15 2,616,250 288,047 2,328,203 80611 HOSPITAL FOR PROFIT BED 50 21 5 218,400 51,317 167,083 80923 NURSE HOME FOR PROFIT BED 4 20 14 2,727,576 375,875 2,351,701 80156 SURGERY PLASTIC M.D. 10 19 4 622,000 242,000 380,000 80410 CHIROPRACTORS 15 19 4 98,125 49,063 49,062 80210 DENTIST ORAL SURGERY 10 18 3 225,000 8,000 217,000 80421 FAMILY PHYSICIAN MINOR SURG M.D. 13 18 8 2,660,000 1,435,718 1,224,282 80146 SURGERY VASCULAR M.D. 6 17 5 950,000 500,000 450,000 84420 FAMILY PHYSICIAN NO SURGERY D.O. 20 17 5 1,662,500 1,292,500 370,000 80267 PEDIATRICS NO SURGERY M.D. 3 16 4 843,000 338,400 504,600 80145 SURGERY UROLOGICAL M.D. 10 14 2 321,904 170,125 151,779 80261 NEUROLOGY NO SURGERY M.D. 12 14 2 400,000 0 400,000 80176 PHYS OR SURG MAJOR SURGERY M.D. GROUP 5 25 13 4 1,149,850 874,839 275,011 80117 SURGERY GENERAL PRACTICE M.D. 7 12 5 879,250 639,250 240,000 80280 RADIOLOGY DIAGNOSTIC MINOR SURG M.D. 12 12 3 533,328 302,328 231,000 80159 SURGERY OTORHINOLARYNGOLOGY M.D. 7 11 5 731,000 503,000 228,000 80274 GASTROENTEROLOGY MINOR SURG M.D. 9 11 1 175,000 0 175,000 80422 PHYS NO MAJ SURG ANGIOGRAPHY M.D. 2 11 6 825,000 540,000 285,000 80281 CARDIOVASCULAR DISEASE MINOR SURG M.D. 12 10 2 325,000 87,500 237,500 80993 CHIROPODIST 15 10 6 456,000 124,676 331,324 80150 SURGERY CARDIOVASCULAR DISEASE M.D. 5 9 3 1,310,000 200,000 1,110,000 80249 PSYCHIATRY M.D. 6 8 1 300,000 300,000 0 80266 PATHOLOGY NO SURGERY M.D. 8 8 1 550,000 400,000 150,000 80144 SURGERY THORACIC M.D. 7 7 3 785,000 285,000 500,000 80172 PHYS OR SURG MAJOR SURGERY M.D. 3 7 3 845,000 110,000 735,000 80245 HEMATOLOGY NO SURGERY M.D. 6 7 2 170,000 120,000 50,000 80157 EMERGENCY MED MAJOR SURG M.D. 7 6 3 1,065,000 350,000 715,000 80246 INFECT DISEASE NO SURGERY M.D. 7 6 1 500,000 185,000 315,000 80260 NEPHROLOGY NO SURGERY M.D. 3 6 1 250,000 125,000 125,000 80269 PULMONARY DISEASE NO SURGERY M.D. 5 6 1 85,000 85,000 0 80284 INTERNAL MED MINOR SURG M.D. 12 6 1 100,000 100,000 0 80235 PHYSIATRY M.D. 4 5 1 700,000 400,000 300,000 80960 NURSE ANESTHETISTS 4 5 2 115,225 48,725 66,500 84102 EMERGENCY MED NO SURGERY D.O. 7 5 1 295,000 0 295,000 80167 SURGERY GYNECOLOGY M.D. 3 4 0 0 0 0 80171 SURGERY TRAUMATIC M.D. 0 4 1 500,000 150,000 350,000 80236 PUBLIC HEALTH M.D. 0 4 3 8,575,000 8,550,000 25,000 80256 DERMATOLOGY NO SURGERY M.D. 1 4 0 0 0 0 80277 GYNECOLOGY MINOR SURG M.D. 3 4 1 290,000 145,000 145,000 84154 SURGERY ORTHOPEDIC D.O. 5 4 3 823,000 506,000 317,000 80141 SURGERY CARDIAC M.D. 4 3 0 0 0 0 80285 LARYNGOLOGY MINOR SURG M.D. 2 3 3 507,500 406,000 101,500 80323 TEACHING PHYSICIAN MAJOR SURGERY GROUP 1 0 3 1 125,000 0 125,000 80613 CLINICS OUTP ONLY FOR PROFIT VISITS 8 3 2 1,096,140 706,140 390,000 80963 NURSES - LPNS 2 3 2 26,251 2,500 23,751 84143 SURGERY GENERAL NOC D.O. 3 3 1 12,227 12,227 0 84151 ANESTHESIOLOGY D.O. 4 3 0 0 0 0 A-176 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION PROFESSION SPECIALTY ANALYSIS
ALL COMPANIES FOR YEAR: 2004 Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages PROFESSION SPECIALTY To Insurer Reports Claims Amount Amount Amount
84153 SURGERY OBSTETRICS GYNECOLOGY D.O. 2 3 0 0 0 0 84176 PHYS OR SURG MAJOR SURGERY D.O. GROUP 5 3 3 0 0 0 0 80108 SURGERY NEPHROLOGY M.D. 0 2 0 0 0 0 80166 SURGERY ABDOMINAL M.D. 2 2 0 0 0 0 80168 SURGERY OBSTETRICS M.D. 1 2 0 0 0 0 80169 SURGERY HAND M.D. 3 2 1 75,000 75,000 0 80177 ADD CHG EMPLOYED PHYSICIAN M.D. 1 2 0 0 0 0 80213 DENTIST EMPLOYED NOC 2 2 1 875 875 0 80233 OCCUPATIONAL MED M.D. 1 2 0 0 0 0 80241 GASTROENTEROLOGY NO SURGERY M.D. 4 2 0 0 0 0 80244 GYNECOLOGY NO SURGERY M.D. 4 2 2 420,000 70,000 350,000 80252 RHEUMATOLOGY NO SURGERY M.D. 0 2 0 0 0 0 80255 CARDIOVASCULAR DISEASE NO SURGERY M.D. 2 2 0 0 0 0 80283 INTENSIVE CARE MEDICINE M.D. 10 2 0 0 0 0 80292 PATHOLOGY MINOR SURG M.D. 1 2 1 800,000 799,999 1 80293 PEDIATRICS MINOR SURG M.D. 2 2 0 0 0 0 80294 PHYSICIAN MINOR SURGERY NOC M.D. 1 2 2 550,000 415,000 135,000 80449 PHYS NO MAJ SURG RADIOPAQUE DYE INJECTION MD 1 2 0 0 0 0 80951 NURSE HOME FOR PROFIT VISITS 0 2 2 525,000 25,000 500,000 80994 OPTOMETRISTS 5 2 1 870,000 870,000 0 84253 RADIOLOGY DIAGNOSTIC NO SURGERY D.O. 0 2 0 0 0 0 84257 INTERNAL MED NO SURGERY D.O. 8 2 1 200,000 200,000 0 84999 ADD CHG CORP/PARTNERSHIP LIABILITY D.O. 1 2 2 225,000 95,000 130,000 80115 SURGERY COLON AND RECTAL M.D. 4 1 1 925,000 503,000 422,000 80132 MILITARY MINOR SURGERY M.D. 0 1 0 0 0 0 80155 SURGERY PLASTIC-OTORHINOLARYNGOLOGY MD 3 1 1 450,000 225,000 225,000 80158 SURGERY OTOLOGY M.D. 0 1 0 0 0 0 80162 ADD CHG INSURED PHYS SHOCK THERAPY M.D. 0 1 1 125,000 0 125,000 80170 SURGERY HEAD AND NECK M.D. 2 1 0 0 0 0 80212 DENTIST EMPLOYED ORAL SURGERY 1 1 1 20,000 8,000 12,000 80231 GEN PREVENTIVE MED NO SURG M.D. 0 1 0 0 0 0 80238 ENDOCRINOLOGY NO SURGERY M.D. 1 1 0 0 0 0 80243 GERIATRICS NO SURGERY M.D. 2 1 0 0 0 0 80250 PSYCHOANALYSIS M.D. 1 1 0 0 0 0 80254 ALLERGY M.D. 1 1 0 0 0 0 80263 OPHTHALMOLOGY NO SURGERY M.D. 0 1 0 0 0 0 80282 DERMATOLOGY MINOR SURGERY M.D. 1 1 0 0 0 0 80287 NEPHROLOGY MINOR SURG M.D. 0 1 0 0 0 0 80288 NEUROLOGY MINOR SURG M.D. 1 1 0 0 0 0 80289 OPHTHALMOLOGY MINOR SURG M.D. 2 1 0 0 0 0 80291 OTORHINOLARYNGOLOGY MINOR SURG M.D. 1 1 1 67,500 67,500 0 80425 PHYS NO MAJ SURG LASERS THERAPY M.D. 4 1 0 0 0 0 80431 PHYS NO MAJ SURG SHOCK THERAPY M.D. 1 1 0 0 0 0 80617 HOSPITAL NOT PROFIT VISITS 0 1 1 50,000 28,000 22,000 80713 X-RAY TECHNICIANS 0 1 0 0 0 0 80941 EMERGENCY EMTS 1 1 0 0 0 0 84136 ADD CHARGE RADIATION THERAPY D.O.* 0 1 0 0 0 0 84157 EMERGENCY MED MAJOR SURG D.O. 3 1 0 0 0 0 84167 SURGERY GYNECOLOGY D.O. 1 1 1 40,000 40,000 0 84177 ADD CHG EMPLOYED PHYSICIAN D.O. 1 1 1 15,000 0 15,000 84261 NEUROLOGY NO SURGERY D.O. 2 1 1 200,000 61,500 138,500 84267 PEDIATRICS NO SURGERY D.O. 1 1 1 20,000 20,000 0 84277 GYNECOLOGY MINOR SURG D.O. 0 1 0 0 0 0 84284 INTERNAL MED MINOR SURG D.O. 1 1 0 0 0 0 84288 NEUROLOGY MINOR SURG D.O. 1 1 0 0 0 0 84421 FAMILY PHYSICIAN MINOR SURG D.O. 3 1 0 0 0 0 84422 PHYS NO MAJ SURG ANGIOGRAPHY D.O. 1 1 0 0 0 0 93216 HOSPITAL GOVERNMENT VISITS 1 1 0 0 0 0 80715 MEDICAL OR X-RAY LABORATORY 1 0 0 0 0 0 80944 EMPLOYED OPTOMETRISTS 1 0 0 0 0 0 80950 PARTNERSHIP LIABILITY CHIROPODIST 1 0 0 0 0 0 84172 PHYS OR SURG MAJOR SURGERY D.O. 1 0 0 0 0 0 84254 ALLERGY D.O. 1 0 0 0 0 0
Total 1,540 1,844 523 131,818,390 78,300,461 53,517,929
A-177 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION PROFESSION SPECIALTY ANALYSIS
ALL COMPANIES FOR YEAR: 2003 Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages PROFESSION SPECIALTY To Insurer Reports Claims Amount Amount Amount
80999 ADD CHG CORP/PARTNERSHIP LIABILITY M.D. 346 305 79 15,422,739 10,016,508 5,406,231 80612 HOSPITAL NOT PROFIT BED 284 272 117 24,816,671 13,208,775 11,607,896 80143 SURGERY GENERAL NOC M.D. 64 90 29 7,992,573 4,498,938 3,493,635 80257 INTERNAL MED NO SURGERY M.D. 69 70 15 1,519,955 1,012,500 507,455 80153 SURGERY OBSTETRICS GYNECOLOGY M.D. 63 67 21 7,098,253 4,771,502 2,326,751 80211 DENTIST NOC 55 63 11 877,355 612,755 264,600 80420 FAMILY PHYSICIAN NO SURGERY M.D. 44 59 16 4,240,000 3,443,500 796,500 80268 PHYSICIANS NO SURGERY NOC M.D. 81 56 13 1,973,167 611,609 1,361,558 93215 HOSPITAL GOVERNMENT BED 46 50 13 859,087 413,985 445,102 80154 SURGERY ORTHOPEDIC M.D. 54 46 9 1,242,448 808,974 433,474 80924 NURSE HOME NOT PROFIT BED 14 38 31 5,497,637 955,698 4,541,939 80152 SURGERY NEUROLOGY M.D. 41 37 13 3,928,580 2,676,173 1,252,407 80151 ANESTHESIOLOGY M.D. 37 33 7 3,623,391 1,671,778 1,951,613 80102 EMERGENCY MED NO SURGERY M.D. 24 23 5 873,000 576,600 296,400 80998 NURSE NOC 20 21 3 700,000 420,000 280,000 80145 SURGERY UROLOGICAL M.D. 25 19 3 263,500 82,184 181,316 80280 RADIOLOGY DIAGNOSTIC MINOR SURG M.D. 19 17 2 268,333 139,166 129,167 80421 FAMILY PHYSICIAN MINOR SURG M.D. 12 17 2 525,000 280,000 245,000 80410 CHIROPRACTORS 21 16 4 151,700 67,100 84,600 80993 CHIROPODIST 14 16 4 1,129,500 297,745 831,755 59112 PHARMACISTS 21 15 10 128,576 77,726 50,850 80156 SURGERY PLASTIC M.D. 23 15 4 600,000 175,000 425,000 80266 PATHOLOGY NO SURGERY M.D. 7 14 1 500,000 400,000 100,000 80422 PHYS NO MAJ SURG ANGIOGRAPHY M.D. 4 14 4 1,917,500 1,291,336 626,164 80964 NURSES - RNS 25 14 3 325,000 70,000 255,000 80274 GASTROENTEROLOGY MINOR SURG M.D. 9 13 2 188,700 25,000 163,700 80923 NURSE HOME FOR PROFIT BED 6 13 12 2,078,682 614,496 1,464,186 80150 SURGERY CARDIOVASCULAR DISEASE M.D. 10 12 1 200,000 0 200,000 80253 RADIOLOGY DIAGNOSTIC NO SURGERY M.D. 26 12 4 655,000 615,000 40,000 80281 CARDIOVASCULAR DISEASE MINOR SURG M.D. 22 12 3 265,000 107,500 157,500 80159 SURGERY OTORHINOLARYNGOLOGY M.D. 8 11 6 1,891,691 1,404,191 487,500 80176 PHYS OR SURG MAJOR SURGERY M.D. GROUP 5 6 11 3 1,050,000 775,803 274,197 80117 SURGERY GENERAL PRACTICE M.D. 9 10 4 1,595,138 837,638 757,500 80144 SURGERY THORACIC M.D. 7 10 4 337,500 205,000 132,500 80261 NEUROLOGY NO SURGERY M.D. 14 10 2 1,025,492 800,000 225,492 80114 SURGERY OPHTHALMOLOGY M.D. 11 9 1 200,000 100,000 100,000 80241 GASTROENTEROLOGY NO SURGERY M.D. 1 9 3 1,570,000 784,000 786,000 80269 PULMONARY DISEASE NO SURGERY M.D. 5 9 3 716,667 421,333 295,334 80210 DENTIST ORAL SURGERY 12 8 4 485,970 101,970 384,000 80285 LARYNGOLOGY MINOR SURG M.D. 0 8 8 1,745,008 1,396,006 349,002 80267 PEDIATRICS NO SURGERY M.D. 7 7 4 1,085,000 563,016 521,984 80284 INTERNAL MED MINOR SURG M.D. 11 7 2 550,000 550,000 0 80617 HOSPITAL NOT PROFIT VISITS 0 7 5 719,717 226,417 493,300 84257 INTERNAL MED NO SURGERY D.O. 4 7 1 165,000 165,000 0 80246 INFECT DISEASE NO SURGERY M.D. 6 6 2 1,125,000 1,052,500 72,500 80255 CARDIOVASCULAR DISEASE NO SURGERY M.D. 6 6 1 15,000 15,000 0 84268 PHYSICIANS NO SURGERY NOC D.O. 26 6 2 520,000 360,000 160,000 84420 FAMILY PHYSICIAN NO SURGERY D.O. 15 6 2 1,075,000 975,000 100,000 80141 SURGERY CARDIAC M.D. 5 5 2 180,000 0 180,000 80157 EMERGENCY MED MAJOR SURG M.D. 3 5 2 375,000 220,000 155,000 80287 NEPHROLOGY MINOR SURG M.D. 3 5 0 0 0 0 80289 OPHTHALMOLOGY MINOR SURG M.D. 5 5 2 215,000 80,000 135,000 80613 CLINICS OUTP ONLY FOR PROFIT VISITS 3 5 3 453,882 38,537 415,345 80249 PSYCHIATRY M.D. 5 4 0 0 0 0 80260 NEPHROLOGY NO SURGERY M.D. 6 4 0 0 0 0 80960 NURSE ANESTHETISTS 7 4 2 500,000 420,000 80,000 84102 EMERGENCY MED NO SURGERY D.O. 8 4 0 0 0 0 84154 SURGERY ORTHOPEDIC D.O. 3 4 1 40,000 12,000 28,000 84280 RADIOLOGY DIAGNOSTIC MINOR SURG D.O. 0 4 1 240,000 192,000 48,000 80146 SURGERY VASCULAR M.D. 12 3 1 225,000 100,000 125,000 80155 SURGERY PLASTIC-OTORHINOLARYNGOLOGY MD 2 3 0 0 0 0 80167 SURGERY GYNECOLOGY M.D. 7 3 1 500,000 250,000 250,000 80235 PHYSIATRY M.D. 9 3 1 650,000 215,000 435,000 80245 HEMATOLOGY NO SURGERY M.D. 6 3 2 425,000 390,000 35,000
A-178 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION PROFESSION SPECIALTY ANALYSIS
ALL COMPANIES FOR YEAR: 2003 Number Number Number Indemnity Economic Non-Economic Reported of Closed Of Paid Total Damages Damages PROFESSION SPECIALTY To Insurer Reports Claims Amount Amount Amount
80256 DERMATOLOGY NO SURGERY M.D. 2 3 1 50,000 8,600 41,400 80610 HOSPITAL FOR PROFIT VISITS 0 3 1 100,000 50,000 50,000 80941 EMERGENCY EMTS 4 3 1 40,000 9,200 30,800 84143 SURGERY GENERAL NOC D.O. 1 3 2 32,500 1,200 31,300 80115 SURGERY COLON AND RECTAL M.D. 3 2 1 215,000 120,000 95,000 80158 SURGERY OTOLOGY M.D. 0 2 0 0 0 0 80169 SURGERY HAND M.D. 1 2 0 0 0 0 80170 SURGERY HEAD AND NECK M.D. 0 2 1 250,000 0 250,000 80238 ENDOCRINOLOGY NO SURGERY M.D. 0 2 0 0 0 0 80277 GYNECOLOGY MINOR SURG M.D. 2 2 2 525,000 140,000 385,000 80278 HEMATOLOGY MINOR SURG M.D. 0 2 1 750,000 600,000 150,000 80292 PATHOLOGY MINOR SURG M.D. 2 2 0 0 0 0 80293 PEDIATRICS MINOR SURG M.D. 2 2 1 267,000 0 267,000 80611 HOSPITAL FOR PROFIT BED 24 2 2 70,000 0 70,000 80715 MEDICAL OR X-RAY LABORATORY 0 2 1 1,000,000 820,000 180,000 84151 ANESTHESIOLOGY D.O. 0 2 0 0 0 0 84153 SURGERY OBSTETRICS GYNECOLOGY D.O. 3 2 0 0 0 0 84249 PSYCHIATRY D.O. 3 2 0 0 0 0 84253 RADIOLOGY DIAGNOSTIC NO SURGERY D.O. 0 2 2 450,000 269,240 180,760 84282 DERMATOLOGY MINOR SURGERY D.O. 0 2 2 180,000 15,000 165,000 84284 INTERNAL MED MINOR SURG D.O. 2 2 1 25,000 0 25,000 80162 ADD CHG INSURED PHYS SHOCK THERAPY M.D. 0 1 0 0 0 0 80243 GERIATRICS NO SURGERY M.D. 1 1 0 0 0 0 80252 RHEUMATOLOGY NO SURGERY M.D. 1 1 0 0 0 0 80283 INTENSIVE CARE MEDICINE M.D. 1 1 0 0 0 0 80288 NEUROLOGY MINOR SURG M.D. 2 1 0 0 0 0 80291 OTORHINOLARYNGOLOGY MINOR SURG M.D. 0 1 0 0 0 0 80321 TEACHING PHYSICIAN NO SURGERY 0 1 1 300,000 50,000 250,000 80322 TEACHING PHYSICIAN MINOR SURGERY 0 1 1 100,000 100,000 0 80425 PHYS NO MAJ SURG LASERS THERAPY M.D. 3 1 0 0 0 0 80926 SANITARIUM NOT PROFIT BED 0 1 0 0 0 0 80938 PHYSIOTHERAPISTS 0 1 1 2,500 100 2,400 80963 NURSES - LPNS 2 1 0 0 0 0 80995 PHYSIOTHERAPISTS 0 1 0 0 0 0 84157 EMERGENCY MED MAJOR SURG D.O. 1 1 0 0 0 0 84176 PHYS OR SURG MAJOR SURGERY D.O. GROUP 5 7 1 0 0 0 0 84235 PHYSICAL MED AND REHABILITATION D.O. 0 1 0 0 0 0 84269 PULMONARY DISEASE NO SURGERY D.O. 1 1 0 0 0 0 84281 CARDIOVASCULAR DISEASE MINOR SURG D.O. 0 1 0 0 0 0 84421 FAMILY PHYSICIAN MINOR SURG D.O. 4 1 0 0 0 0 84422 PHYS NO MAJ SURG ANGIOGRAPHY D.O. 0 1 0 0 0 0 99999 HMO RELATED 0 1 1 75,000 0 75,000 80116 PHYSICIAN OR SURGEONS ASSISTANTS M.D. 1 0 0 0 0 0 80171 SURGERY TRAUMATIC M.D. 2 0 0 0 0 0 80172 PHYS OR SURG MAJOR SURGERY M.D. 5 0 0 0 0 0 80177 ADD CHG EMPLOYED PHYSICIAN M.D. 3 0 0 0 0 0 80212 DENTIST EMPLOYED ORAL SURGERY 1 0 0 0 0 0 80233 OCCUPATIONAL MED M.D. 3 0 0 0 0 0 80259 NEOPLASTIC DISEASE NO SURGERY M.D. 1 0 0 0 0 0 80323 TEACHING PHYSICIAN MAJOR SURGERY GROUP 1 1 0 0 0 0 0 80449 PHYS NO MAJ SURG RADIOPAQUE DYE INJECTION MD 1 0 0 0 0 0 80711 MEDICAL LABORATORY TECHNICIANS 1 0 0 0 0 0 80950 PARTNERSHIP LIABILITY CHIROPODIST 1 0 0 0 0 0 80951 NURSE HOME FOR PROFIT VISITS 1 0 0 0 0 0 80994 OPTOMETRISTS 1 0 0 0 0 0 84152 SURGERY NEUROLOGY D.O. 1 0 0 0 0 0 84267 PEDIATRICS NO SURGERY D.O. 1 0 0 0 0 0 84277 GYNECOLOGY MINOR SURG D.O. 1 0 0 0 0 0 84291 OTORHINOLARYNGOLOGY MINOR SURG D.O. 1 0 0 0 0 0 93216 HOSPITAL GOVERNMENT VISITS 1 0 0 0 0 0
TOTAL 1,817 1,727 539 113,969,412 64,775,299 49,194,113
A-179
A-180 Section VI
Claim Study by Means of Disposition
This section contains a thorough claim study by means of disposition. We have two exhibits containing the claim study by means of disposition for physicians and surgeons and for hospitals. Within each disposition type the following data is presented:
• Number of Claims Closed • Percentage of Claims by Means of Disposition • Average Number of Months from Incident to Report • Average Number of Months from Incident to Disposition • Average Bodily Injury Severity (Severity codes defined in Section III) • Average Economic Damage Paid per Claim • Average Non-Economic Damage Paid per Claim • Average Total Indemnity Paid per Claim (Economic + Non-Economic) • Average Loss Adjustment Expense Paid per Claim
A-181
A-182 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2005
ALL MEDICAL CARE PROVIDERS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 83 17.4% 7 17 4 18,819 24,372 43,191 2,598 Lawsuits Settled Before Trial 383 80.1% 22 55 6 176,658 117,117 293,775 53,968
Total Settled 466 97.5% 19 48 6 148,545 100,598 249,143 44,818
Court Dispositions
Judgment for Plaintiff 7 1.5% 20 49 7 226,224 246,552 472,776 139,105 Judgment for Plaintiff After Appeal 5 1.0% 39 103 6 39,636 294,176 333,812 123,531
Total Court Dispositions 12 2.5% 28 71 7 148,479 266,395 414,874 132,616
Total Paid Claim Dispositions 478 100.0% 19 49 6 148,543 104,760 253,304 47,023
In Favor of Defendant
Claims Closed Before Litigation 222 18.2% 12 32 4 1,655
Lawsuits Closed or Abandoned Before Trial 948 77.6% 26 50 5 11,665
Court Dispositions
Direct Verdict for Defendant 3 0.2% 26 48 6 12,853 Judgment NWS Verdict for Plaintiff 1 0.1% 41 51 3 2,054 Judgment for Defendant 41 3.4% 18 60 6 73,073 Judgment for Defendant After Appeal 6 0.5% 22 88 6 114,531
Total Court Dispositions 51 4.2% 20 62 6 73,016
Total Unpaid Claim Dispositions 1221 100.0% 23 47 5 12,408 A-183 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2005
PHYSICIANS AND SURGEONS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 14 7.1% 8 22 4 22,083 83,636 105,719 1,739 Lawsuits Settled Before Trial 174 88.8% 23 58 7 185,303 127,511 312,814 56,076
Total Settled 188 95.9% 22 55 6 173,149 124,244 297,392 52,029
Court Dispositions
Judgment for Plaintiff 4 2.0% 20 51 6 244,500 175,750 420,250 115,671 Judgment for Plaintiff After Appeal 4 2.0% 42 108 7 37,500 310,428 347,928 136,474
Total Court Dispositions 8 4.1% 31 80 7 141,000 243,089 384,089 126,072
Total Paid Claim Dispositions 196 100.0% 22 56 6 171,836 129,094 300,931 55,051
In Favor of Defendant
Claims Closed Before Litigation 70 11.2% 13 30 4 225
Lawsuits Closed or Abandoned Before Trial 527 84.2% 28 49 5 11,916
Court Dispositions
Direct Verdict for Defendant 2 0.3% 26 45 7 19,279 Judgment for Defendant 22 3.5% 18 63 6 92,780 Judgment for Defendant After Appeal 5 0.8% 22 86 6 137,437
Total Court Dispositions 29 4.6% 19 66 6 95,410
Total Unpaid Claim Dispositions 626 100.0% 26 48 5 14,477 A-184 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2005
HOSPITALS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 44 31.9% 6 17 4 25,578 11,468 37,046 2,947 Lawsuits Settled Before Trial 92 66.7% 22 55 6 175,845 114,346 290,191 60,927
Total Settled 136 98.6% 17 43 5 127,229 81,062 208,291 42,169
Court Dispositions
Judgment for Plaintiff 2 1.4% 23 50 8 284,216 507,500 791,716 227,733
Total Court Dispositions 2 1.4% 23 50 8 284,216 507,500 791,716 227,733
Total Paid Claim Dispositions 138 100.0% 17 43 5 129,504 87,242 216,747 44,858
In Favor of Defendant
Claims Closed Before Litigation 92 40.9% 9 34 5 3,532
Lawsuits Closed or Abandoned Before Trial 133 59.1% 22 54 5 14,496
Total Unpaid Claim Dispositions 225 100.0% 17 46 5 10,013 A-185 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2004
ALL MEDICAL CARE PROVIDERS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 97 18.5% 9 21 4 20,951 48,166 69,118 9,138 Lawsuits Settled Before Trial 408 78.0% 20 51 7 179,956 107,748 287,705 46,173
Total Settled 505 96.6% 18 45 6 149,415 96,304 245,719 39,060
Court Dispositions
Judgment for Plaintiff 14 2.7% 16 55 6 150,103 174,995 325,098 90,546 Judgment for Plaintiff After Appeal 4 0.8% 22 87 9 186,146 608,625 794,771 298,350
Total Court Dispositions 18 3.4% 17 62 7 158,112 271,357 429,470 136,725
Total Paid Claim Dispositions 523 100.0% 18 46 6 149,714 102,329 252,043 42,421
In Favor of Defendant
Claims Closed Before Litigation 284 21.5% 10 28 4 1,789
Lawsuits Closed or Abandoned Before Trial 971 73.5% 25 48 6 12,533
Court Dispositions
Direct Verdict for Defendant 9 0.7% 24 51 6 33,432 Judgment NWS Verdict for Plaintiff 3 0.2% 18 57 7 103,011 Judgment for Defendant 51 3.9% 18 55 6 84,913 Judgment for Defendant After Appeal 3 0.2% 26 111 4 97,268
Total Court Dispositions 66 5.0% 19 57 6 79,277
Total Unpaid Claim Dispositions 1321 100.0% 21 44 5 13,558 A-186 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2004
PHYSICIANS AND SURGEONS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 14 6.3% 15 35 4 4,124 113,114 117,238 14,038 Lawsuits Settled Before Trial 197 87.9% 22 54 7 192,844 98,382 291,225 50,516
Total Settled 211 94.2% 22 52 6 180,322 99,359 279,681 48,096
Court Dispositions
Judgment for Plaintiff 10 4.5% 16 60 6 149,392 203,627 353,018 112,341 Judgment for Plaintiff After Appeal 3 1.3% 22 89 9 126,264 446,833 573,097 333,975
Total Court Dispositions 13 5.8% 18 66 7 144,054 259,751 403,806 163,487
Total Paid Claim Dispositions 224 100.0% 21 53 7 178,217 108,668 286,885 54,793
In Favor of Defendant
Claims Closed Before Litigation 98 14.5% 12 29 5 2,332
Lawsuits Closed or Abandoned Before Trial 530 78.6% 26 50 6 14,746
Court Dispositions
Direct Verdict for Defendant 6 0.9% 21 52 7 49,652 Judgment NWS Verdit for Plaintiff 2 0.3% 15 43 9 57,849 Judgment for Defendant 35 5.2% 20 59 6 95,334 Judgment for Defendant After Appeal 3 0.4% 26 111 4 97,268
Total Court Dispositions 46 6.8% 20 61 6 87,872
Total Unpaid Claim Dispositions 674 100.0% 23 47 5 17,932 A-187 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2004
HOSPITALS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 48 38.4% 8 18 4 36,114 42,359 78,473 10,488 Lawsuits Settled Before Trial 77 61.6% 18 50 6 139,576 113,902 253,478 52,953
Total Settled 125 100.0% 14 38 6 99,847 86,429 186,276 36,647
Total Paid Claim Dispositions 125 100.0% 14 38 6 99,847 86,429 186,276 36,647
In Favor of Defendant
Claims Closed Before Litigation 102 49.5% 7 27 4 1,567
Lawsuits Closed or Abandoned Before Trial 103 50.0% 23 46 6 13,510
Court Dispositions
Judgment NWS Verdict for Plaintiff 1 0.5% 25 87 3 193,334
Total Court Dispositions 1 0.5% 25 87 3 193,334
Total Unpaid Claim Dispositions 206 100.0% 15 37 5 8,470 A-188 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2003
ALL MEDICAL CARE PROVIDERS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 136 25.2% 13 32 5 48,973 33,345 82,318 6,645 Lawsuits Settled Before Trial 390 72.4% 21 52 7 139,873 110,079 249,952 34,266
Total Settled 526 97.6% 19 46 6 116,370 90,239 206,609 27,125
Court Dispositions
Judgment for Plaintiff 10 1.9% 17 52 6 296,450 123,968 420,418 120,830 Judgment for Plaintiff After Appeal 3 0.6% 23 92 6 200,000 162,950 362,950 199,429
Total Court Dispositions 13 2.4% 18 61 6 274,192 132,964 407,156 138,968
Total Paid Claim Dispositions 539 100.0% 19 47 6 120,177 91,269 211,446 29,822
In Favor of Defendant
Claims Closed Before Litigation 291 24.5% 13 31 5 2,819
Lawsuits Closed or Abandoned Before Trial 838 70.5% 25 47 6 10,182
Court Dispositions
Direct Verdict for Defendant 13 1.1% 26 67 7 84,289 Judgment NWS Verdict for Plaintiff 1 0.1% 0 15 1 23,763 Judgment for Defendant 38 3.2% 30 63 6 54,861 Judgment for Defendant After Appeal 7 0.6% 18 97 6 145,714
Total Court Dispositions 59 5.0% 27 67 6 71,597
Total Unpaid Claim Dispositions 1188 100.0% 22 44 5 11,429 A-189 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2003
PHYSICIANS AND SURGEONS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 24 12.5% 13 32 5 80,124 38,533 118,658 4,297 Lawsuits Settled Before Trial 160 83.3% 23 56 6 157,073 101,741 258,813 35,773
Total Settled 184 95.8% 21 53 6 147,036 93,496 240,532 31,667
Court Dispositions
Judgment for Plaintiff 5 2.6% 17 52 7 486,500 180,700 667,200 88,943 Judgment for Plaintiff After Appeal 3 1.6% 23 92 6 200,000 162,950 362,950 199,429
Total Court Dispositions 8 4.2% 19 67 7 379,063 174,044 553,106 130,375
Total Paid Claim Dispositions 192 100.0% 21 53 6 156,704 96,852 253,556 35,780
In Favor of Defendant
Claims Closed Before Litigation 113 20.3% 15 35 5 2,044
Lawsuits Closed or Abandoned Before Trial 411 73.8% 25 48 6 13,287
Court Dispositions
Direct Verdict for Defendant 7 1.3% 29 69 8 66,480 Judgment for Defendant 20 3.6% 32 64 6 65,544 Judgment for Defendant After Appeal 6 1.1% 17 101 6 155,682
Total Court Dispositions 33 5.9% 29 72 7 82,132
Total Unpaid Claim Dispositions 557 100.0% 23 47 6 15,085 A-190 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION DISPOSITION OF CLAIM - 2003
HOSPITALS
Claim Reports Average Months Average Average Paid Disposition Number Percent Incident to Incident to Severity Economic Non-Economic Indemnity Expense Report Disposition Damage Damage
In Favor of Plaintiff
Claims Settled Before Litigation 59 43.7% 10 27 4 30,673 40,026 70,699 7,488 Lawsuits Settled Before Trial 74 54.8% 18 50 7 155,898 136,373 292,271 36,195
Total Settled 133 98.5% 14 40 6 100,347 93,632 193,980 23,460
Court Dispositions
Judgment for Plaintiff 2 1.5% 14 57 6 60,000 45,090 105,090 60,245
Total Court Dispositions 2 1.5% 14 57 6 60,000 45,090 105,090 60,245
Total Paid Claim Dispositions 135 100.0% 14 40 6 99,749 92,913 192,663 24,005
In Favor of Defendant
Claims Closed Before Litigation 68 35.1% 9 29 5 4,849
Lawsuits Closed or Abandoned Before Trial 119 61.3% 27 52 6 10,034
Court Dispositions
Direct Verdict for Defendant 3 1.5% 19 61 6 152,759 Judgment NWS Verdict for Plaintiff 1 0.5% 0 15 1 23,763 Judgment for Defendant 2 1.0% 6 52 7 98,448 Judgment for Defendant After Appeal 1 0.5% 20 69 4 85,907
Total Court Dispositions 7 3.6% 13 53 5 109,263
Total Unpaid Claim Dispositions 194 100.0% 20 44 5 11,797 A-191
A-192 Section VII Market Share and Experience Data by Company
This section contains the written premium, earned premium, paid losses, incurred losses, market share and loss ratio of all Medical Malpractice writers in Missouri. The data was derived from the Missouri Supplement of the Annual Statement. In addition to a total for medical malpractice insurance, the data is broken down into five categories of malpractice insurance:
• Physicians & Surgeons • Hospitals • Dentists • Nurses • All Other
The reports are presented in descending order of market share by company. The data for this exhibit is independent of the closed claim data used in all preceding tables.
A-193
A-194 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE TOTAL MEDICAL MALPRACTICE Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0000 11582 MISSOURI PHYSICIANS MUTUAL 22.34% 42,450,735 39,874,314 4,184,634 2,975,123 19,824,620 49.72% 0861 27642 MISSOURI HOSPITAL PLAN 17.33% 32,937,495 32,626,339 4,460,807 7,097,204 7,719,697 23.66% 2698 33391 MEDICAL ASSURANCE CO INC THE 13.54% 25,721,360 27,679,098 13,220,952 5,483,035 8,380,636 30.28% 0031 11843 MEDICAL PROTECTIVE COMPANY 9.34% 17,746,207 18,893,849 7,028,234 8,315,674 16,774,674 88.78% 1272 33367 INTERMED INSURANCE COMPANY 5.38% 10,230,026 10,396,994 23,090,703 12,476,456 1,949,150 18.75% 0000 11704 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 4.46% 8,466,959 7,882,572 1,361,256 1,705,158 4,341,158 55.07% 0000 35904 HEALTH CARE INDEMNITY INC 4.28% 8,133,777 8,133,777 1,966,754 724,128 4,523,892 55.62% 0861 10686 MEDICAL LIABILITY ALLIANCE 3.38% 6,428,814 7,554,400 2,071,892 655,000 5,310,997 70.30% 0831 34495 DOCTORS COMPANY AN INTERINS EXCHANGE 2.63% 4,992,613 6,671,173 2,520,136 6,235,431 10,362,288 155.33% 0000 12513 PROFESSIONAL LIABILITY INSURANCE COMPANY OF AMERICA 2.25% 4,279,440 3,471,747 186,265 0 1,114,350 32.10% 0000 11964 MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 1.83% 3,484,766 3,124,341 707,697 0 1,925,437 61.63% 0218 20427 AMERICAN CASUALTY CO OF READING PA 1.42% 2,693,847 2,584,658 175,574 797,585 625,289 24.19% 0000 44083 PREFERRED PHYSICIANS MEDICAL RRG INC 1.37% 2,608,423 2,576,270 724,771 0 2,964,552 115.07% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 1.34% 2,546,182 2,416,723 334,099 127,500 2,130,836 88.17% 0000 36234 PREFERRED PROFESSIONAL INSURANCE COMPANY 1.31% 2,493,934 2,338,853 165,335 1,775,000 1,534,828 65.62% 0000 34703 KANSAS MEDICAL MUTUAL INS CO 1.28% 2,432,153 2,432,153 (833,973) 825,000 1,895,270 77.93% 0244 10677 CINCINNATI INS CO THE 0.93% 1,771,524 1,821,845 1,830,478 858,394 1,103,027 60.54% 2638 11127 PROFESSIONAL SOLUTIONS INSURANCE COMPANY 0.78% 1,483,034 1,336,511 354,671 0 1,333,004 99.74% 2638 15865 NCMIC INSURANCE COMPANY 0.73% 1,387,061 1,404,334 655,052 361,256 1,754,132 124.91% 0218 20443 CONTINENTAL CASUALTY COMPANY 0.62% 1,177,101 1,460,154 780,309 561,554 1,100,156 75.35% 3504 14460 PODIATRY INSURANCE COMPANY OF AMERICA A MUTUAL COMPANY 0.48% 921,321 851,607 257,483 353,950 439,914 51.66% 0761 22810 CHICAGO INSURANCE COMPANY 0.48% 903,801 1,052,663 703,246 12,416,832 (4,544,647) -431.73% 0350 34916 FIRST SPECIALTY INSURANCE CORPORATION 0.47% 884,254 2,057,564 (112,641) 0 (770,558) -37.45% 0626 22667 ACE AMERICAN INSURANCE COMPANY 0.34% 638,645 513,856 124,352 81,052 589,699 114.76% 3504 10222 PACO ASSURANCE COMPANY INC 0.31% 595,455 290,280 93,987 0 345,352 118.97% 2358 32921 ISMIE MUTUAL INSURANCE COMPANY 0.26% 496,280 539,027 131,756 0 303,461 56.30% 0775 13714 PHARMACISTS MUTUAL INSURANCE COMPANY 0.20% 385,352 381,577 3,215 5,410 6,493 1.70% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 0.17% 315,923 275,895 (14,910) 115,500 (23,665) -8.58% 0212 21687 MID CENTURY INSURANCE COMPANY 0.15% 282,978 282,978 3,207,419 3,500,981 10,623,385 3754.14% 0038 35181 EXECUTIVE RISK INDEMNITY INC 0.13% 247,558 382,246 255,879 (29,246) (890,197) -232.89% 0501 16624 DARWIN NATIONAL ASSURANCE COMPANY 0.13% 242,129 145,516 33,149 0 64,347 44.22% 0508 10801 FORTRESS INSURANCE COMPANY 0.07% 134,956 107,665 50,823 0 11,002 10.22% 0176 25143 STATE FARM FIRE AND CASUALTY COMPANY 0.04% 82,558 80,520 0 0 1,355 1.68% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.04% 81,011 79,513 4,470 0 18,172 22.85% 0361 19720 AMERICAN ALTERNATIVE INS CORP 0.04% 79,157 99,811 22,757 0 90,796 90.97% 0761 21857 AMERICAN INSURANCE COMPANY THE 0.04% 77,650 81,078 4,777 0 8,537 10.53% 0350 34207 WESTPORT INSURANCE CORPORATION 0.04% 73,636 73,614 1,610 0 (2,475) -3.36% 0012 23809 GRANITE STATE INSURANCE COMPANY 0.03% 60,689 80,681 88,718 15,000 357,702 443.35% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.02% 33,004 27,576 563,475 2,535,100 (1,310,620) -4752.76% 3548 25658 TRAVELERS INDEMNITY COMPANY 0.01% 18,552 277,740 148,954 309,750 399,878 143.98% 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.01% 13,494 12,245 6,744 31,128 (41,725) -340.75% 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 3,877 5,092 (470,752) 1,262,500 (2,391,016) -46956.32% A-195 0761 21865 ASSOCIATED INDEMNITY CORPORATION 0.00% 3,340 3,201 147 0 216 6.75% 0761 21881 NATIONAL SURETY CORPORATION 0.00% 176 95 (8) 0 74 77.89% 3548 10819 AMERICAN EQUITY SPECIALTY INSURANCE COMPANY 0.00% 0 0 (45,997) 0 (1,780) N/A 0140 11991 NATIONAL CASUALTY COMPANY 0.00% 0 0 (305) 0 (4,372) N/A 0748 16551 SAVERS PROPERTY & CASUALTY INS CO 0.00% 0 0 (559) 0 (980) N/A 0084 16691 GREAT AMERICAN INSURANCE COMPANY 0.00% 0 0 0 0 (240,000) N/A 0626 18279 BANKERS STANDARD INSURANCE COMPANY 0.00% 0 0 (4,389) 0 4,376 N/A MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE TOTAL MEDICAL MALPRACTICE Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0 0 3,944 0 (7,639) N/A 3548 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0 0 205 0 (81) N/A 0140 19100 AMCO INSURANCE COMPANY 0.00% 0 7,844 (60,742) 0 (1,599) -20.39% 0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0 0 (52) 0 (822) N/A 0163 19690 AMERICAN ECONOMY INSURANCE COMPANY 0.00% 0 0 (1,348) 0 (1,997) N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 (483) 0 (203) N/A 0038 20397 VIGILANT INSURANCE COMPANY 0.00% 0 0 (28,442) 0 (35,249) N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 6,416 56,310 191,055 N/A 1129 20621 ONEBEACON AMERICA INSURANCE COMPANY 0.00% 0 0 0 130 130 N/A 0626 20702 ACE FIRE UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 47,362 0 (18,102) N/A 0158 21105 NORTH RIVER INSURANCE COMPANY THE 0.00% 0 0 23 0 (5) N/A 0158 21113 UNITED STATES FIRE INSURANCE COMPANY 0.00% 0 0 579 0 (380) N/A 3548 21296 COMMERCIAL GUARANTY CASUALTY INSURANCE COMPANY 0.00% 0 0 (91,304) 0 (225,000) N/A 0761 21849 AMERICAN AUTOMOBILE INSURANCE CO 0.00% 0 (4) (3,692) 0 (1,347) 33675.00% 0761 21873 FIREMANS FUND INSURANCE COMPANY 0.00% 0 0 530,710 500,000 435,090 N/A 1129 21970 ONEBEACON INSURANCE COMPANY 0.00% 0 0 475 0 19,114 N/A 0626 22713 INSURANCE COMPANY OF NORTH AMERICA 0.00% 0 0 11,161 0 25,237 N/A 0626 22748 PACIFIC EMPLOYERS INSURANCE COMPANY 0.00% 0 0 225 0 150 N/A 0108 22918 AMERICAN MOTORISTS INSURANCE CO 0.00% 0 0 (14) 0 (37) N/A 0108 22977 LUMBERMENS MUTUAL CASUALTY CO 0.00% 0 0 (49,542) 0 (206,138) N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0 0 827 0 (283) N/A 0163 24724 FIRST NATIONAL INS CO OF AMERICA 0.00% 0 0 (2) 0 1 N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 12 0 (75) N/A 3548 24775 ST PAUL GUARDIAN INSURANCE COMPANY 0.00% 0 0 0 0 (226) N/A 3548 24791 ST PAUL MERCURY INSURANCE COMPANY 0.00% 0 (2,213) (114,626) 56,160 (547,315) 24731.81% 0553 24902 SECURITY INSURANCE COMPANY OF HARTFORD 0.00% 0 2,635 (3,744) 0 (11,234) -426.34% 0158 25496 TIG INDEMNITY COMPANY 0.00% 0 0 (8,000) 0 (3,000) N/A 0158 25534 TIG INSURANCE COMPANY 0.00% 0 0 (493,088) 3,015,214 172,054 N/A 3548 25887 UNITED STATES FIDELITY & GUARANTY CO 0.00% 0 0 0 0 10 N/A 0212 26247 AMERICAN GUARANTEE & LIABILITY INS CO 0.00% 0 0 (1,869) 0 (10,599) N/A 0108 27138 KEMPER CASUALTY INSURANCE COMPANY 0.00% 0 0 6 0 27 N/A 0091 29459 TWIN CITY FIRE INS CO 0.00% 0 0 (558,536) 0 7,300 N/A 0181 29874 NORTH AMERICAN SPECIALTY INS CO 0.00% 0 0 1,599,261 512,125 (721,692) N/A 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (35,233) 268,500 (96,471) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 (9,147) 0 37,934 N/A 1210 35602 OHIC INSURANCE COMPANY 0.00% 0 0 (50,294) 0 (652,863) N/A 0785 38970 MARKEL INSURANCE COMPANY 0.00% 0 0 (371) 0 (707) N/A 1125 39152 AMERICAN HEALTHCARE INDEMNITY COMPANY 0.00% 0 0 (626) 0 (1,005) N/A A-196 0212 40142 AMERICAN ZURICH INSURANCE COMPANY 0.00% 0 0 (51) 0 (288) N/A 3548 42811 GULF UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 348 0 (296) N/A 0212 21709 TRUCK INSURANCE EXCHANGE 0.00% (2,110) (1,824) (3,647,130) 1,600,000 (9,498,568) 520754.82% 3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA 0.00% (6,259) (6,252) 3,784 0 1,757 -28.10%
TOTAL MEDICAL MALPRACTICE BUSINESS 100.00% 190,032,878 192,382,331 67,086,048 77,579,894 88,557,355 46.03% MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Physicians & Surgeons Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0000 11582 MISSOURI PHYSICIANS MUTUAL 31.73% 42,450,735 39,874,314 4,184,634 2,975,123 19,824,620 49.72% 2698 33391 MEDICAL ASSURANCE CO INC THE 18.30% 24,489,344 26,403,582 13,228,059 5,438,035 8,385,141 31.76% 0031 11843 MEDICAL PROTECTIVE COMPANY 11.23% 15,025,119 16,287,595 6,620,010 7,946,500 16,176,000 99.31% 1272 33367 INTERMED INSURANCE COMPANY 7.33% 9,813,143 9,973,307 22,132,093 12,159,108 1,868,231 18.73% 0000 11704 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 6.33% 8,466,959 7,882,572 1,361,256 1,705,158 4,341,158 55.07% 0861 10686 MEDICAL LIABILITY ALLIANCE 4.73% 6,322,814 7,462,875 2,071,892 655,000 5,305,997 71.10% 0831 34495 DOCTORS COMPANY AN INTERINS EXCHANGE 3.73% 4,992,613 6,671,173 2,520,136 6,235,431 10,362,288 155.33% 0000 12513 PROFESSIONAL LIABILITY INSURANCE COMPANY OF AMERICA 3.20% 4,279,440 3,471,747 186,265 0 1,114,350 32.10% 0000 11964 MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 2.60% 3,484,766 3,124,341 707,697 0 1,925,437 61.63% 0000 44083 PREFERRED PHYSICIANS MEDICAL RRG INC 1.95% 2,608,423 2,576,270 724,771 0 2,964,552 115.07% 0000 36234 PREFERRED PROFESSIONAL INSURANCE COMPANY 1.86% 2,488,999 2,335,870 165,335 1,775,000 1,534,828 65.71% 0000 34703 KANSAS MEDICAL MUTUAL INS CO 1.82% 2,432,153 2,432,153 (833,973) 825,000 1,895,270 77.93% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 1.25% 1,674,908 1,512,371 0 27,500 2,673,888 176.80% 2638 11127 PROFESSIONAL SOLUTIONS INSURANCE COMPANY 1.11% 1,483,034 1,336,511 354,671 0 1,333,004 99.74% 3504 14460 PODIATRY INSURANCE COMPANY OF AMERICA A MUTUAL COMPANY 0.69% 921,321 851,607 257,483 353,950 439,914 51.66% 0626 22667 ACE AMERICAN INSURANCE COMPANY 0.48% 638,645 513,856 124,352 81,052 589,699 114.76% 3504 10222 PACO ASSURANCE COMPANY INC 0.45% 595,455 290,280 93,987 0 345,352 118.97% 2358 32921 ISMIE MUTUAL INSURANCE COMPANY 0.37% 496,280 539,027 131,756 0 303,461 56.30% 0218 20443 CONTINENTAL CASUALTY COMPANY 0.34% 454,258 640,534 372,731 512,891 (1,017,171) -158.80% 0212 21687 MID CENTURY INSURANCE COMPANY 0.21% 282,978 282,978 3,207,419 3,500,981 10,623,385 3754.14% 0501 16624 DARWIN NATIONAL ASSURANCE COMPANY 0.18% 242,129 145,516 33,149 0 64,347 44.22% 0176 25143 STATE FARM FIRE AND CASUALTY COMPANY 0.06% 77,320 77,585 0 0 1,355 1.75% 0218 20427 AMERICAN CASUALTY CO OF READING PA 0.03% 43,497 44,502 (2,624) 0 (104,098) -233.92% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.02% 32,905 28,879 312,624 2,185,100 (1,470,139) -5090.69% 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.00% 4,323 4,276 710 0 1,859 43.48% 3548 10819 AMERICAN EQUITY SPECIALTY INSURANCE COMPANY 0.00% 0 0 (45,997) 0 (1,780) N/A 0140 11991 NATIONAL CASUALTY COMPANY 0.00% 0 0 (251) 0 (4,389) N/A 2638 15865 NCMIC INSURANCE COMPANY 0.00% 0 106,320 200,393 200,000 132,803 124.91% 0084 16691 GREAT AMERICAN INSURANCE COMPANY 0.00% 0000(240,000) N/A 3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0000(101) N/A 0038 20397 VIGILANT INSURANCE COMPANY 0.00% 0 0 (28,442) 0 (35,249) N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 6,416 56,310 191,055 N/A 1129 20621 ONEBEACON AMERICA INSURANCE COMPANY 0.00% 0 0 0 130 130 N/A 0626 20702 ACE FIRE UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 47,362 0 (18,102) N/A 0158 21105 NORTH RIVER INSURANCE COMPANY THE 0.00% 0000(1)N/A 0158 21113 UNITED STATES FIRE INSURANCE COMPANY 0.00% 0000(7)N/A 3548 21296 COMMERCIAL GUARANTY CASUALTY INSURANCE COMPANY 0.00% 0 0 (91,304) 0 (225,000) N/A 1129 21970 ONEBEACON INSURANCE COMPANY 0.00% 0 0 475 0 19,114 N/A 0626 22748 PACIFIC EMPLOYERS INSURANCE COMPANY 0.00% 0 0 225 0 150 N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 (1) 0 (5) N/A 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0 738 (575,430) 790,000 (1,544,616) -209297.56% 3548 24791 ST PAUL MERCURY INSURANCE COMPANY 0.00% 0 (2,213) (106,236) 0 0 0.00% A-197 0553 24902 SECURITY INSURANCE COMPANY OF HARTFORD 0.00% 0 2,635 (3,744) 0 (11,234) -426.34% 0181 29874 NORTH AMERICAN SPECIALTY INS CO 0.00% 0 0 1,599,261 512,125 (721,692) N/A 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (35,233) 268,500 (96,471) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 (71,168) 0 (333,983) N/A 1210 35602 OHIC INSURANCE COMPANY 0.00% 0 0 (50,294) 0 (7,198) N/A 0000 35904 HEALTH CARE INDEMNITY INC 0.00% 0 0 43,475 0 100,000 N/A 1125 39152 AMERICAN HEALTHCARE INDEMNITY COMPANY 0.00% 0 0 (626) 0 (1,005) N/A MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Physicians & Surgeons Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA 0.00% (19) (12) 0 0 0 0.00% 0212 21709 TRUCK INSURANCE EXCHANGE 0.00% (2,110) (1,824) (3,646,581) 1,600,000 (9,499,420) 520801.54%
TOTAL PHYSICIANS & SURGEONS BUSINESS 100.00% 133,799,432 134,869,365 55,196,733 49,802,894 77,185,727 57.23% A-198 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Dentists Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0031 11843 MEDICAL PROTECTIVE COMPANY 55.86% 2,721,088 2,606,254 411,363 289,174 659,674 25.31% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 17.89% 871,274 904,373 0 0 334,670 37.01% 2698 33391 MEDICAL ASSURANCE CO INC THE 10.30% 501,844 523,101 42,671 45,000 27,049 5.17% 1272 33367 INTERMED INSURANCE COMPANY 8.56% 416,883 423,687 958,610 317,348 80,919 19.10% 0508 10801 FORTRESS INSURANCE COMPANY 2.77% 134,956 107,665 50,823 0 11,002 10.22% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 1.66% 81,011 79,513 0 0 81,198 102.12% 0244 10677 CINCINNATI INS CO THE 1.60% 77,960 73,757 24,136 142,500 59,423 80.57% 0012 23809 GRANITE STATE INSURANCE COMPANY 1.25% 60,689 80,681 0 15,000 (56,148) -69.59% 0176 25143 STATE FARM FIRE AND CASUALTY COMPANY 0.11% 5,238 2,935 0 0 0 0.00% 0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0000(1,585) N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0000(283) N/A
TOTAL DENTISTS BUSINESS 100.00% 4,870,943 4,801,966 1,487,603 809,022 1,195,919 24.90% A-199 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Nurses Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
2698 33391 MEDICAL ASSURANCE CO INC THE 97.50% 402,742 422,251 0 0 0 0.00% 0244 10677 CINCINNATI INS CO THE 2.50% 10,333 10,693 0 0 (8,496) -79.45% 0108 27138 KEMPER CASUALTY INSURANCE COMPANY 0.00% 006027N/A
TOTAL NURSES BUSINESS 100.00% 413,075 432,944 6 0 (8,469) -1.96% A-200 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Hospitals Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0861 27642 MISSOURI HOSPITAL PLAN 77.92% 32,937,495 32,626,339 4,460,807 7,097,204 7,719,697 23.66% 0000 35904 HEALTH CARE INDEMNITY INC 19.24% 8,133,777 8,133,777 1,923,279 724,128 4,423,892 54.39% 0218 20443 CONTINENTAL CASUALTY COMPANY 1.13% 479,509 577,039 273,410 32,000 2,073,399 359.32% 2698 33391 MEDICAL ASSURANCE CO INC THE 0.77% 327,430 330,164 (49,778) 0 (31,554) -9.56% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 0.73% 310,137 270,270 (14,606) 115,500 (23,133) -8.56% 0361 19720 AMERICAN ALTERNATIVE INS CORP 0.19% 79,157 99,811 22,757 0 90,796 90.97% 0000 36234 PREFERRED PROFESSIONAL INSURANCE COMPANY 0.01% 4,935 2,983 0 0 0 0.00% 0031 11843 MEDICAL PROTECTIVE COMPANY 0.00% 0 0 (3,139) 80,000 (61,000) N/A 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.00% 0 (2,177) 250,851 350,000 159,519 -7327.47% 3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0000(7,538) N/A 3548 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0000(81) N/A 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.00% 0000(2,000) N/A 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.00% 0000(1,000) N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 (3) 0 7 N/A 0218 20427 AMERICAN CASUALTY CO OF READING PA 0.00% 0 0 28,848 0 236,294 N/A 0158 21105 NORTH RIVER INSURANCE COMPANY THE 0.00% 0 0 23 0 (4) N/A 0158 21113 UNITED STATES FIRE INSURANCE COMPANY 0.00% 0 0 579 0 (373) N/A 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0 0 (75,762) 435,000 (436,844) N/A 3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA 0.00% 00001,571 N/A 0212 26247 AMERICAN GUARANTEE & LIABILITY INS CO 0.00% 0 0 (1,869) 0 (10,599) N/A 0038 35181 EXECUTIVE RISK INDEMNITY INC 0.00% 0 0 255,879 0 (810,585) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 62,021 0 721,917 N/A 1210 35602 OHIC INSURANCE COMPANY 0.00% 0000(645,665) N/A 0212 40142 AMERICAN ZURICH INSURANCE COMPANY 0.00% 0 0 (51) 0 (288) N/A 0244 10677 CINCINNATI INS CO THE -0.01% (2,965) 10,434 (165,088) 40,000 (508,894) -4877.27%
TOTAL HOSPITAL BUSINESS 100.00% 42,269,475 42,048,640 6,968,158 8,873,832 12,887,534 30.65% A-201 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Other Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0218 20427 AMERICAN CASUALTY CO OF READING PA 30.53% 2,650,350 2,540,156 149,350 797,585 493,093 19.41% 0244 10677 CINCINNATI INS CO THE 19.43% 1,686,196 1,726,961 1,971,430 675,894 1,560,994 90.39% 2638 15865 NCMIC INSURANCE COMPANY 15.98% 1,387,061 1,298,014 454,659 161,256 1,621,329 124.91% 0761 22810 CHICAGO INSURANCE COMPANY 10.41% 903,801 1,052,663 703,246 12,416,832 (4,544,647) -431.73% 0350 34916 FIRST SPECIALTY INSURANCE CORPORATION 10.19% 884,254 2,057,564 (112,641) 0 (770,558) -37.45% 0775 13714 PHARMACISTS MUTUAL INSURANCE COMPANY 4.44% 385,352 381,577 3,215 5,410 6,493 1.70% 0038 35181 EXECUTIVE RISK INDEMNITY INC 2.85% 247,558 382,246 0 (29,246) (79,612) -20.83% 0218 20443 CONTINENTAL CASUALTY COMPANY 2.80% 243,334 242,581 134,168 16,663 43,928 18.11% 0861 10686 MEDICAL LIABILITY ALLIANCE 1.22% 106,000 91,525 0 0 5,000 5.46% 0761 21857 AMERICAN INSURANCE COMPANY THE 0.89% 77,650 81,078 4,777 0 8,537 10.53% 0350 34207 WESTPORT INSURANCE CORPORATION 0.85% 73,636 73,614 1,610 0 (2,475) -3.36% 3548 25658 TRAVELERS INDEMNITY COMPANY 0.21% 18,552 277,740 148,954 309,750 399,878 143.98% 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.11% 9,171 7,969 6,034 31,128 (43,584) -546.92% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 0.07% 5,786 5,625 (304) 0 (532) -9.46% 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.04% 3,877 4,354 180,440 37,500 (409,556) -9406.43% 0761 21865 ASSOCIATED INDEMNITY CORPORATION 0.04% 3,340 3,201 147 0 216 6.75% 0761 21881 NATIONAL SURETY CORPORATION 0.00% 176 95 (8) 0 74 77.89% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.00% 99 874 0 0 0 0.00% 0140 11991 NATIONAL CASUALTY COMPANY 0.00% 0 0 (54) 0 17 N/A 0748 16551 SAVERS PROPERTY & CASUALTY INS CO 0.00% 0 0 (559) 0 (980) N/A 0626 18279 BANKERS STANDARD INSURANCE COMPANY 0.00% 0 0 (4,389) 0 4,376 N/A 3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0 0 3,944 0 0 N/A 3548 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0 0 205 0 0 N/A 0140 19100 AMCO INSURANCE COMPANY 0.00% 0 7,844 (60,742) 0 (1,599) -20.39% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.00% 0 0 4,470 0 (61,026) N/A 0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0 0 (52) 0 763 N/A 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.00% 0 (21) 334,099 100,000 (876,722) 4174866.67% 0163 19690 AMERICAN ECONOMY INSURANCE COMPANY 0.00% 0 0 (1,348) 0 (1,997) N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 (480) 0 (210) N/A 0212 21709 TRUCK INSURANCE EXCHANGE 0.00% 0 0 (549) 0 852 N/A 0761 21849 AMERICAN AUTOMOBILE INSURANCE CO 0.00% 0 (4) (3,692) 0 (1,347) 33675.00% 0761 21873 FIREMANS FUND INSURANCE COMPANY 0.00% 0 0 530,710 500,000 435,090 N/A 0626 22713 INSURANCE COMPANY OF NORTH AMERICA 0.00% 0 0 11,161 0 25,237 N/A 0108 22918 AMERICAN MOTORISTS INSURANCE CO 0.00% 0 0 (14) 0 (37) N/A 0108 22977 LUMBERMENS MUTUAL CASUALTY CO 0.00% 0 0 (49,542) 0 (206,138) N/A 0012 23809 GRANITE STATE INSURANCE COMPANY 0.00% 0 0 88,718 0 413,850 N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0 0 827 0 0 N/A 0163 24724 FIRST NATIONAL INS CO OF AMERICA 0.00% 0 0 (2) 0 1 N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 13 0 (70) N/A 3548 24775 ST PAUL GUARDIAN INSURANCE COMPANY 0.00% 0 0 0 0 (226) N/A 3548 24791 ST PAUL MERCURY INSURANCE COMPANY 0.00% 0 0 (8,390) 56,160 (547,315) N/A 0158 25496 TIG INDEMNITY COMPANY 0.00% 0 0 (8,000) 0 (3,000) N/A A-202 0158 25534 TIG INSURANCE COMPANY 0.00% 0 0 (493,088) 3,015,214 172,054 N/A 3548 25887 UNITED STATES FIDELITY & GUARANTY CO 0.00% 0 0 0 0 10 N/A 0091 29459 TWIN CITY FIRE INS CO 0.00% 0 0 (558,536) 0 7,300 N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 0 0 (350,000) N/A MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2005 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Other Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0785 38970 MARKEL INSURANCE COMPANY 0.00% 0 0 (371) 0 (707) N/A 3548 42811 GULF UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 348 0 (296) N/A 3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA -0.07% (6,240) (6,240) 3,784 0 186 -2.98%
TOTAL OTHER BUSINESS 100.00% 8,679,953 10,229,416 3,433,548 18,094,146 (2,703,356) -26.43% A-203 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2004 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE TOTAL MEDICAL MALPRACTICE Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0000 11582 MISSOURI PHYSICIANS MUTUAL 18.35% 37,717,350 33,773,458 1,317,081 1,684,500 12,398,487 36.71% 2698 33391 MEDICAL ASSURANCE CO INC THE 17.07% 35,084,138 36,249,631 19,102,744 9,043,043 13,173,248 36.34% 0861 27642 MISSOURI HOSPITAL PLAN 16.19% 33,274,256 29,965,628 3,291,932 11,639,817 18,331,321 61.17% 0350 11843 MEDICAL PROTECTIVE COMPANY 9.34% 19,203,530 22,841,041 4,858,966 7,746,913 1,059,314 4.64% 1272 33367 INTERMED INSURANCE COMPANY 6.41% 13,179,120 16,198,753 2,711,401 13,644,500 15,929,238 98.34% 0000 35904 HEALTH CARE INDEMNITY INC 4.53% 9,309,187 9,309,187 4,135,546 38,438 4,104,437 44.09% 0861 10686 MEDICAL LIABILITY ALLIANCE 4.04% 8,296,402 5,886,947 896,522 595,684 1,140,687 19.38% 0000 11704 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 3.94% 8,102,880 4,598,253 656,128 0 2,346,000 51.02% 0831 34495 DOCTORS COMPANY AN INTERINS EXCHANGE 3.70% 7,610,102 9,580,660 1,343,454 2,208,750 4,731,306 49.38% 0350 34916 FIRST SPECIALTY INSURANCE CORPORATION 1.71% 3,510,672 3,366,330 (468,332) 0 (5,556,513) -165.06% 0212 21687 MID CENTURY INSURANCE COMPANY 1.50% 3,073,610 3,864,922 0 0 0 0.00% 0218 20427 AMERICAN CASUALTY CO OF READING PA 1.20% 2,476,123 2,241,102 830,710 821,905 2,728,603 121.75% 0000 36234 PREFERRED PROFESSIONAL INSURANCE COMPANY 1.12% 2,311,321 2,352,445 (116,949) 4,788,519 3,081,493 130.99% 0000 44083 PREFERRED PHYSICIANS MEDICAL RRG INC 1.07% 2,198,349 2,167,678 585,784 0 617,328 28.48% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 1.02% 2,098,336 1,911,519 72,493 562,910 872,127 45.62% 0218 20443 CONTINENTAL CASUALTY COMPANY 1.02% 2,098,234 1,333,072 (432,619) 892,203 (3,520,952) -264.12% 0244 10677 CINCINNATI INS CO THE 0.88% 1,803,594 1,955,423 1,906,279 1,629,073 136,123 6.96% 0158 25534 TIG INSURANCE COMPANY 0.83% 1,703,701 2,768,447 831,980 2,061,167 (174,269) -6.29% 2638 15865 NCMIC INSURANCE COMPANY 0.80% 1,636,413 2,008,392 49,578 273,125 582,646 29.01% 0000 34703 KANSAS MEDICAL MUTUAL INS CO 0.74% 1,515,915 1,515,915 2,407,913 100,897 3,611,869 238.26% 0000 11964 MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 0.67% 1,372,534 804,660 0 0 0 0.00% 0212 21709 TRUCK INSURANCE EXCHANGE 0.64% 1,314,955 1,897,926 1,247,473 2,428,851 6,132,834 323.13% 0761 22810 CHICAGO INSURANCE COMPANY 0.63% 1,288,366 1,265,492 1,297,048 18,809,595 16,353,811 1292.29% 2638 11127 PROFESSIONAL SOLUTIONS INSURANCE COMPANY 0.43% 885,991 313,901 58,975 0 138,399 44.09% 3504 14460 PODIATRY INSURANCE COMPANY OF AMERICA A MUTUAL COMPANY 0.36% 745,270 709,539 178,720 402,500 821,273 115.75% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.33% 682,325 936,113 (273,455) 5,372,500 1,934,716 206.68% 3548 22217 GULF INSURANCE COMPANY 0.26% 533,328 502,062 202,744 43,500 (21,298) -4.24% 2358 32921 ISMIE MUTUAL INSURANCE COMPANY 0.26% 529,869 280,391 64,889 0 181,526 64.74% 0775 13714 PHARMACISTS MUTUAL INSURANCE COMPANY 0.18% 378,102 374,397 379 86,515 53,223 14.22% 0038 35181 EXECUTIVE RISK INDEMNITY INC 0.18% 373,467 417,349 96,826 1,100,619 453,417 108.64% 0626 22667 ACE AMERICAN INSURANCE COMPANY 0.14% 284,480 229,338 208,344 38,000 548,914 239.35% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 0.08% 164,038 182,642 105,801 0 (59) -0.03% 0012 23809 GRANITE STATE INSURANCE COMPANY 0.06% 132,475 125,151 8,368 0 36,150 28.89% 0361 19720 AMERICAN ALTERNATIVE INS CORP 0.06% 119,119 105,466 (1,105) 0 (21,705) -20.58% 0140 19100 AMCO INSURANCE COMPANY 0.04% 90,515 239,076 (20,098) 0 10,906 4.56% 0176 25143 STATE FARM FIRE AND CASUALTY COMPANY 0.04% 78,172 37,363 0 0 0 0.00% 0761 21857 AMERICAN INSURANCE COMPANY THE 0.04% 76,405 60,256 (8,900) 0 (2,432) -4.04% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.03% 69,109 84,578 1,123 0 26,092 30.85% 0508 10801 FORTRESS INSURANCE COMPANY 0.03% 64,109 265,610 122,924 20,000 3,526 1.33% 0350 34207 WESTPORT INSURANCE CORPORATION 0.03% 61,473 51,290 2,473 0 10,782 21.02% 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.02% 50,859 95,265 (1,067,074) 10,711,140 4,939,642 5185.16% 0000 16624 DARWIN NATIONAL ASSURANCE COMPANY 0.02% 38,845 4,788 1,058 0 2,054 42.90% A-204 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.01% 14,448 14,460 (24,881) 0 (14,491) -100.21% 3548 24791 ST PAUL MERCURY INSURANCE COMPANY 0.01% 12,041 18,359 (120,870) 52,000 (237,301) -1292.56% 0553 24902 SECURITY INSURANCE COMPANY OF HARTFORD 0.01% 11,668 22,639 (1,772) 0 (449) -1.98% 3504 10222 PACO ASSURANCE COMPANY INC 0.01% 10,520 7,881 0 0 37 0.47% 3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA 0.00% 19 12 (4,271) 0 2,870 23916.67% 3548 10819 AMERICAN EQUITY SPECIALTY INSURANCE COMPANY 0.00% 0 0 (12,889) 15,000 (102,395) N/A 0140 11991 NATIONAL CASUALTY COMPANY 0.00% 0 0 (2,267) 0 (40,190) N/A MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2004 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE TOTAL MEDICAL MALPRACTICE Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0748 16551 SAVERS PROPERTY & CASUALTY INS CO 0.00% 0 486 (998) 0 (1,751) -360.29% 0084 16691 GREAT AMERICAN INSURANCE COMPANY 0.00% 0 0 629 0 0 N/A 0626 18279 BANKERS STANDARD INSURANCE COMPANY 0.00% 0 0 (21,282) 0 20,433 N/A 3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0 0 (200,162) 0 (92,615) N/A 3548 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0 0 (8,933) 0 (3,800) N/A 0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0 0 (30) 0 (208) N/A 0163 19690 AMERICAN ECONOMY INSURANCE COMPANY 0.00% 0 0 (2,457) 0 (288) N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 (789) 0 (67) N/A 0038 20397 VIGILANT INSURANCE COMPANY 0.00% 0 0 (29,557) 0 (44,221) N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 0 0 (2,835) 0 (19,659) N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 52,345 1,550,000 (388,493) N/A 0626 20702 ACE FIRE UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 64,825 88,250 (213,757) N/A 0012 20796 AIG PREMIER INSURANCE COMPANY 0.00% 0 0 0 0 8,034 N/A 0158 21105 NORTH RIVER INSURANCE COMPANY THE 0.00% 0 0 (13) 0 (321) N/A 0158 21113 UNITED STATES FIRE INSURANCE COMPANY 0.00% 0 0 (168) 0 (2,278) N/A 3548 21296 COMMERCIAL GUARANTY CASUALTY INSURANCE COMPANY 0.00% 0 0 935 150,000 (850,000) N/A 0761 21849 AMERICAN AUTOMOBILE INSURANCE CO 0.00% 0 4 6,359 0 3,055 76375.00% 0761 21873 FIREMANS FUND INSURANCE COMPANY 0.00% 0 0 737,244 4,279,230 635,999 N/A 0761 21881 NATIONAL SURETY CORPORATION 0.00% 0 0 75 0 (574) N/A 0626 22713 INSURANCE COMPANY OF NORTH AMERICA 0.00% 0 0 (1,199) 0 1,396 N/A 0626 22748 PACIFIC EMPLOYERS INSURANCE COMPANY 0.00% 0 0 (2,144) 0 3,886 N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0 0 (21,365) 1,688,300 687,300 N/A 0163 24724 FIRST NATIONAL INS CO OF AMERICA 0.00% 0 0 4 0 3 N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 (20) 0 (144) N/A 0158 25496 TIG INDEMNITY COMPANY 0.00% 0 0 3,000 0 (10,000) N/A 3548 25658 TRAVELERS INDEMNITY COMPANY 0.00% 0 0 (2,636,145) 0 (9,196,609) N/A 3548 25887 UNITED STATES FIDELITY & GUARANTY CO 0.00% 0 0 0 0 (26) N/A 0212 26247 AMERICAN GUARANTEE & LIABILITY INS CO 0.00% 0 0 1,852 0 10,493 N/A 0091 29459 TWIN CITY FIRE INS CO 0.00% 0 0 (119,079) 0 (6,707) N/A 0181 29874 NORTH AMERICAN SPECIALTY INS CO 0.00% 0 0 1,726,123 2,584,487 890,273 N/A 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (386,947) 200,000 (704,638) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 168,601 2,656,262 1,473,449 N/A 1210 35602 OHIC INSURANCE COMPANY 0.00% 0 0 97,410 129,963 1,491,946 N/A 0785 38970 MARKEL INSURANCE COMPANY 0.00% 0 0 371 0 707 N/A 1125 39152 AMERICAN HEALTHCARE INDEMNITY COMPANY 0.00% 0 0 (455) 0 (615) N/A 0212 40142 AMERICAN ZURICH INSURANCE COMPANY 0.00% 0 0 51 0 288 N/A 3548 42811 GULF UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 1,284 0 (18,492) N/A 0626 43575 INDEMNITY INSURANCE CO OF NORTH AMERICA 0.00% 0 0 6 0 0 N/A A-205 0108 22977 LUMBERMENS MUTUAL CASUALTY CO 0.00% (1,561) 800 122,491 0 505,141 63142.63% 0108 22918 AMERICAN MOTORISTS INSURANCE CO 0.00% (3,045) (3,038) (14,400) 0 (80,591) 2652.76%
TOTAL MEDICAL MALPRACTICE BUSINESS 100.00% 205,581,129 202,933,059 45,574,801 110,138,156 100,898,894 49.72% MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2004 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Physicians & Surgeons Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0000 11582 MISSOURI PHYSICIANS MUTUAL 26.44% 37,717,350 33,773,458 1,317,081 1,684,500 12,398,487 36.71% 2698 33391 MEDICAL ASSURANCE CO INC THE 23.59% 33,647,834 34,897,940 18,680,730 9,020,475 12,882,230 36.91% 0350 11843 MEDICAL PROTECTIVE COMPANY 11.71% 16,700,422 20,341,837 5,348,304 7,354,535 864,936 4.25% 1272 33367 INTERMED INSURANCE COMPANY 8.99% 12,820,144 15,757,528 3,004,271 13,429,500 17,649,824 112.01% 0861 10686 MEDICAL LIABILITY ALLIANCE 5.77% 8,228,657 5,860,055 896,522 595,684 1,140,687 19.47% 0000 11704 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 5.68% 8,102,880 4,598,253 656,128 0 2,346,000 51.02% 0831 34495 DOCTORS COMPANY AN INTERINS EXCHANGE 5.34% 7,610,102 9,580,660 1,343,454 2,208,750 4,731,306 49.38% 0212 21687 MID CENTURY INSURANCE COMPANY 2.15% 3,073,610 3,864,922 0 0 0 0.00% 0000 36234 PREFERRED PROFESSIONAL INSURANCE COMPANY 1.62% 2,311,321 2,352,445 (116,949) 4,788,519 3,081,493 130.99% 0000 44083 PREFERRED PHYSICIANS MEDICAL RRG INC 1.54% 2,198,349 2,167,678 585,784 0 617,328 28.48% 0000 34703 KANSAS MEDICAL MUTUAL INS CO 1.06% 1,515,915 1,515,915 2,407,913 100,897 3,611,869 238.26% 0000 11964 MISSOURI DOCTORS MUTUAL INSURANCE COMPANY 0.96% 1,372,534 804,660 0 0 0 0.00% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.95% 1,361,128 1,017,934 72,493 120,000 1,011,481 99.37% 0212 21709 TRUCK INSURANCE EXCHANGE 0.92% 1,314,955 1,897,926 1,251,892 2,428,851 6,139,693 323.49% 0218 20443 CONTINENTAL CASUALTY COMPANY 0.84% 1,197,334 759,125 (99,231) 846,513 (2,641,687) -347.99% 2638 11127 PROFESSIONAL SOLUTIONS INSURANCE COMPANY 0.62% 885,991 313,901 58,975 0 138,399 44.09% 3504 14460 PODIATRY INSURANCE COMPANY OF AMERICA A MUTUAL COMPANY 0.52% 745,270 709,539 178,720 402,500 821,273 115.75% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.48% 680,325 658,728 (9,435) 3,172,500 2,786,415 423.00% 2358 32921 ISMIE MUTUAL INSURANCE COMPANY 0.37% 529,869 280,391 64,889 0 181,526 64.74% 2638 15865 NCMIC INSURANCE COMPANY 0.33% 467,724 866,752 21,075 175,000 221,057 25.50% 0140 19100 AMCO INSURANCE COMPANY 0.06% 90,515 239,076 (20,098) 0 10,906 4.56% 0176 25143 STATE FARM FIRE AND CASUALTY COMPANY 0.05% 78,172 37,363 0 0 0 0.00% 0218 20427 AMERICAN CASUALTY CO OF READING PA 0.03% 48,125 56,120 21,833 0 224,738 400.46% 0000 16624 DARWIN NATIONAL ASSURANCE COMPANY 0.03% 38,845 4,788 1,058 0 2,054 42.90% 0553 24902 SECURITY INSURANCE COMPANY OF HARTFORD 0.01% 11,668 22,639 (1,772) 0 (449) -1.98% 3504 10222 PACO ASSURANCE COMPANY INC 0.01% 10,520 7,881 0 0 37 0.47% 3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA 0.00% 19 12 0 0 0 0.00% 3548 10819 AMERICAN EQUITY SPECIALTY INSURANCE COMPANY 0.00% 0 0 (12,889) 15,000 (102,395) N/A 0140 11991 NATIONAL CASUALTY COMPANY 0.00% 0 0 (2,267) 0 (40,190) N/A 0084 16691 GREAT AMERICAN INSURANCE COMPANY 0.00% 0 0 629 0 0 N/A 3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0000(1,223) N/A 0038 20397 VIGILANT INSURANCE COMPANY 0.00% 0 0 (29,557) 0 (44,221) N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 0 0 (1,577) 0 (14,863) N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 157,329 1,550,000 (127,637) N/A 0012 20796 AIG PREMIER INSURANCE COMPANY 0.00% 00008,034 N/A 3548 21296 COMMERCIAL GUARANTY CASUALTY INSURANCE COMPANY 0.00% 0 0 935 150,000 (850,000) N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0 0 (21,365) 1,688,300 687,300 N/A 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.00% 0 0 233 0 77 N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 (7) 0 (54) N/A 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0 (738) (789,023) 9,035,000 5,373,761 -728151.90% 3548 24791 ST PAUL MERCURY INSURANCE COMPANY 0.00% 0 2,213 0 0 0 0.00% 0181 29874 NORTH AMERICAN SPECIALTY INS CO 0.00% 0 0 1,726,123 2,584,487 890,273 N/A A-206 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (108,567) 200,000 (440,005) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 114,198 756,262 987,738 N/A 1210 35602 OHIC INSURANCE COMPANY 0.00% 0 0 97,410 0 24,334 N/A 1125 39152 AMERICAN HEALTHCARE INDEMNITY COMPANY 0.00% 0 0 (455) 0 (615) N/A 0761 22810 CHICAGO INSURANCE COMPANY -0.09% (132,478) (126,919) 0 18,769,595 16,667,524 -13132.41%
TOTAL PHYSICIANS & SURGEONS BUSINESS 100.00% 142,627,100 142,262,082 36,794,787 81,076,868 91,237,441 64.13% MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2004 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Dentists Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0350 11843 MEDICAL PROTECTIVE COMPANY 56.38% 2,503,108 2,499,204 (327,637) 89,497 56,497 2.26% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 15.65% 694,766 603,351 0 0 (72,450) -12.01% 2698 33391 MEDICAL ASSURANCE CO INC THE 12.05% 534,940 550,665 28,250 22,568 19,480 3.54% 1272 33367 INTERMED INSURANCE COMPANY 8.09% 358,976 441,225 (292,870) 215,000 (1,720,586) -389.96% 0012 23809 GRANITE STATE INSURANCE COMPANY 2.98% 132,475 125,151 8,368 0 36,150 28.89% 0244 10677 CINCINNATI INS CO THE 1.85% 82,086 82,781 23,055 875 90,910 109.82% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 1.56% 69,109 67,181 0 0 41,810 62.23% 0508 10801 FORTRESS INSURANCE COMPANY 1.44% 64,109 265,610 122,924 20,000 3,526 1.33% 0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0 0 (30) 0 (1,585) N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 0 0 (1,258) 0 0 N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 (74,249) 0 (86,005) N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0000(283) N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0000(90) N/A CIAL INS 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0 0 (3,159) 0 (10,316) N/A
TOTAL DENTISTS BUSINESS 100.00% 4,439,569 4,635,168 -516,606 347,940 -1,642,942 -35.45% A-207 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2004 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Nurses Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
2698 33391 MEDICAL ASSURANCE CO INC THE 96.82% 562,783 551,860 0 0 0 0.00% 0244 10677 CINCINNATI INS CO THE 1.93% 11,242 8,576 0 0 2,402 28.01% 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 1.24% 7,218 25,323 67,522 345,000 487,925 1926.81%
TOTAL NURSES BUSINESS 100.00% 581,243 585,759 67,522 345,000 490,327 83.71% A-208 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2004 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Hospitals Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0861 27642 MISSOURI HOSPITAL PLAN 69.47% 33,274,256 29,965,628 3,291,932 11,639,817 18,331,321 61.17% 0000 35904 HEALTH CARE INDEMNITY INC 19.43% 9,309,187 9,309,187 4,135,546 38,438 4,104,437 44.09% 0350 34916 FIRST SPECIALTY INSURANCE CORPORATION 7.33% 3,510,672 3,366,330 (468,332) 0 (5,556,513) -165.06% 0218 20443 CONTINENTAL CASUALTY COMPANY 1.37% 657,906 364,400 (123,394) 18,000 (648,177) -177.88% 0244 10677 CINCINNATI INS CO THE 0.76% 365,623 512,596 381,856 541,474 37,472 7.31% 2698 33391 MEDICAL ASSURANCE CO INC THE 0.71% 338,581 249,166 393,764 0 271,538 108.98% 0626 22667 ACE AMERICAN INSURANCE COMPANY 0.59% 284,480 229,338 208,344 38,000 548,914 239.35% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 0.33% 158,761 177,646 102,907 0 (4,547) -2.56% 0350 11843 MEDICAL PROTECTIVE COMPANY 0.00% 0 0 (161,701) 302,881 137,881 N/A 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.00% 0 276,338 (264,020) 2,200,000 (851,699) -308.21% 0626 18279 BANKERS STANDARD INSURANCE COMPANY 0.00% 0 0 (21,282) 0 20,433 N/A 3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0000(91,392) N/A 3548 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0000(3,800) N/A 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.00% 0 0 0 449,617 (94,383) N/A 0163 19690 AMERICAN ECONOMY INSURANCE COMPANY 0.00% 00001 N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 (112) 0 4 N/A 0218 20427 AMERICAN CASUALTY CO OF READING PA 0.00% 0 0 (1,116) 0 69,286 N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 0000(4,796) N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 (30,735) 0 (174,851) N/A 0626 20702 ACE FIRE UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 64,825 88,250 (213,757) N/A 0761 21873 FIREMANS FUND INSURANCE COMPANY 0.00% 0 0 732,271 4,279,230 636,918 N/A 3548 22217 GULF INSURANCE COMPANY 0.00% 0000200 N/A 0626 22713 INSURANCE COMPANY OF NORTH AMERICA 0.00% 0 0 (1,199) 0 1,396 N/A 0626 22748 PACIFIC EMPLOYERS INSURANCE COMPANY 0.00% 0 0 (2,144) 0 3,886 N/A 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0 0 (49,719) 210,000 (456,829) N/A 3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA 0.00% 00002,566 N/A 0212 26247 AMERICAN GUARANTEE & LIABILITY INS CO 0.00% 0 0 1,852 0 10,493 N/A 0038 35181 EXECUTIVE RISK INDEMNITY INC 0.00% 0 0 96,826 350,000 82,296 N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 (44,374) 200,000 235,767 N/A 1210 35602 OHIC INSURANCE COMPANY 0.00% 0 0 0 129,963 1,467,612 N/A 0212 40142 AMERICAN ZURICH INSURANCE COMPANY 0.00% 0 0 51 0 288 N/A 3548 42811 GULF UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 1,284 0 (18,492) N/A
TOTAL HOSPITAL BUSINESS 100.00% 47,899,466 44,450,629 8,243,330 20,485,670 17,843,473 40.14% A-209 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2004 PAGE 20 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Other Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0218 20427 AMERICAN CASUALTY CO OF READING PA 24.20% 2,427,998 2,184,982 809,993 821,905 2,434,579 111.42% 0158 25534 TIG INSURANCE COMPANY 16.98% 1,703,701 2,768,447 831,980 2,061,167 (174,269) -6.29% 0761 22810 CHICAGO INSURANCE COMPANY 14.16% 1,420,844 1,392,411 1,297,048 40,000 (313,713) -22.53% 0244 10677 CINCINNATI INS CO THE 13.40% 1,344,643 1,351,470 1,501,368 1,086,724 5,339 0.40% 2638 15865 NCMIC INSURANCE COMPANY 11.65% 1,168,689 1,141,640 28,503 98,125 361,589 31.67% 3548 22217 GULF INSURANCE COMPANY 5.32% 533,328 502,062 202,744 43,500 (21,498) -4.28% 0775 13714 PHARMACISTS MUTUAL INSURANCE COMPANY 3.77% 378,102 374,397 379 86,515 53,223 14.22% 0038 35181 EXECUTIVE RISK INDEMNITY INC 3.72% 373,467 417,349 0 750,619 371,121 88.92% 0218 20443 CONTINENTAL CASUALTY COMPANY 2.42% 242,994 209,547 (209,994) 27,690 (231,088) -110.28% 0361 19720 AMERICAN ALTERNATIVE INS CORP 1.19% 119,119 105,466 (1,105) 0 (21,705) -20.58% 0761 21857 AMERICAN INSURANCE COMPANY THE 0.76% 76,405 60,256 (8,900) 0 (2,432) -4.04% 0861 10686 MEDICAL LIABILITY ALLIANCE 0.68% 67,745 26,892 0 0 0 0.00% 0350 34207 WESTPORT INSURANCE CORPORATION 0.61% 61,473 51,290 2,473 0 10,782 21.02% 3548 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.43% 43,641 70,680 (292,695) 1,121,140 (454,899) -643.60% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.42% 42,442 290,234 0 (6,707) 27,479 9.47% 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.14% 14,448 14,460 (25,114) 0 (14,568) -100.75% 3548 24791 ST PAUL MERCURY INSURANCE COMPANY 0.12% 12,041 16,146 (120,870) 52,000 (237,301) -1469.72% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 0.05% 5,277 4,996 2,894 0 4,488 89.83% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.02% 2,000 1,047 0 0 0 0.00% 0748 16551 SAVERS PROPERTY & CASUALTY INS CO 0.00% 0 486 (998) 0 (1,751) -360.29% 3548 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0 0 (200,162) 0 0 N/A 3548 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0 0 (8,933) 0 0 N/A 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.00% 0 17,397 1,123 0 (15,718) -90.35% 0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0 0 0 0 1,377 N/A 0163 19690 AMERICAN ECONOMY INSURANCE COMPANY 0.00% 0 0 (2,457) 0 (289) N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 (677) 0 (71) N/A 0158 21105 NORTH RIVER INSURANCE COMPANY THE 0.00% 0 0 (13) 0 (321) N/A 0158 21113 UNITED STATES FIRE INSURANCE COMPANY 0.00% 0 0 (168) 0 (2,278) N/A 0212 21709 TRUCK INSURANCE EXCHANGE 0.00% 0 0 (4,419) 0 (6,859) N/A 0761 21849 AMERICAN AUTOMOBILE INSURANCE CO 0.00% 0 4 6,359 0 3,055 76375.00% 0761 21873 FIREMANS FUND INSURANCE COMPANY 0.00% 0 0 4,973 0 (919) N/A 0761 21881 NATIONAL SURETY CORPORATION 0.00% 0 0 75 0 (574) N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0 0 0 0 283 N/A 0163 24724 FIRST NATIONAL INS CO OF AMERICA 0.00% 0 0 4 0 3 N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 (13) 0 0 N/A 0158 25496 TIG INDEMNITY COMPANY 0.00% 0 0 3,000 0 (10,000) N/A 3548 25658 TRAVELERS INDEMNITY COMPANY 0.00% 0 0 (2,636,145) 0 (9,196,609) N/A 3548 25674 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA 0.00% 0 0 (4,271) 0 304 N/A 3548 25887 UNITED STATES FIDELITY & GUARANTY CO 0.00% 0 0 0 0 (26) N/A 0091 29459 TWIN CITY FIRE INS CO 0.00% 0 0 (119,079) 0 (6,707) N/A 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (278,380) 0 (264,633) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 98,777 1,700,000 249,944 N/A A-210 0785 38970 MARKEL INSURANCE COMPANY 0.00% 0 0 371 0 707 N/A 0626 43575 INDEMNITY INSURANCE CO OF NORTH AMERICA 0.00% 0 0 6 0 0 N/A 0108 22977 LUMBERMENS MUTUAL CASUALTY CO -0.02% (1,561) 800 122,491 0 505,141 63142.63% 0108 22918 AMERICAN MOTORISTS INSURANCE CO -0.03% (3,045) (3,038) (14,400) 0 (80,591) 2652.76%
TOTAL OTHER BUSINESS 100.00% 10,033,751 10,999,421 985,768 7,882,678 (7,029,405) -63.91% MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2003 PAGE 26 SUPPLEMENT EXPERIENCE WITH MARKET SHARE TOTAL MEDICAL MALPRACTICE Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
2698 33391 MEDICAL ASSURANCE CO INC THE 17.31% 32,283,293 30,485,992 18,380,397 8,207,055 16,815,690 55.16% 0350 11843 MEDICAL PROTECTIVE COMPANY 17.24% 32,147,335 25,941,194 4,331,444 10,371,258 12,969,039 49.99% 0861 27642 MISSOURI HOSPITAL PLAN 14.40% 26,846,780 22,475,433 6,328,855 4,368,098 14,024,043 62.40% 1272 33367 INTERMED INSURANCE COMPANY 13.27% 24,740,731 30,519,494 6,293,234 9,452,901 27,348,759 89.61% 0000 11582 MISSOURI PHYSICIANS MUTUAL 10.12% 18,873,274 4,838,701 1,687,327 0 2,805,640 57.98% 0831 34495 DOCTORS COMPANY AN INTERINS EXCHANGE 5.29% 9,873,431 8,930,470 7,652,971 621,000 7,397,091 82.83% 0212 21687 MID CENTURY INSURANCE COMPANY 3.51% 6,550,946 6,331,377 0 0 0 0.00% 0761 22810 CHICAGO INSURANCE COMPANY 2.67% 4,979,017 8,332,619 2,954,670 17,574,164 25,953,543 311.47% 0861 10686 MEDICAL LIABILITY ALLIANCE 2.01% 3,746,800 2,989,237 272,512 156,667 1,165,167 38.98% 0350 34916 FIRST SPECIALTY INSURANCE CORPORATION 1.75% 3,265,820 2,955,323 636,728 0 6,634,851 224.51% 0158 25534 TIG INSURANCE COMPANY 1.48% 2,758,071 4,251,889 2,010,217 2,480,880 3,592,285 84.49% 0212 21709 TRUCK INSURANCE EXCHANGE 1.14% 2,123,967 2,068,140 3,748,618 282,439 9,995,785 483.32% 0000 36234 PREFERRED PROFESSIONAL INSURANCE COMPANY 1.08% 2,005,015 1,823,859 1,088,388 2,675,000 4,730,123 259.35% 0244 10677 CINCINNATI INS CO THE 1.02% 1,903,772 1,822,203 316,383 2,072,350 1,786,843 98.06% 0218 20427 AMERICAN CASUALTY CO OF READING PA 0.96% 1,785,921 1,672,471 82,935 1,033,058 2,286,190 136.70% 0000 44083 PREFERRED PHYSICIANS MEDICAL RRG INC 0.92% 1,718,869 1,752,424 339,223 0 752,528 42.94% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.90% 1,682,342 1,387,898 218,618 1,783,780 636,150 45.84% 2638 15865 NCMIC INSURANCE COMPANY 0.74% 1,373,579 839,529 1,198,329 151,700 1,381,184 164.52% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.57% 1,063,372 2,783,331 738,712 2,723,730 6,092,796 218.90% 0000 11704 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 0.50% 938,833 570,259 49,000 0 279,000 48.93% 0000 34703 KANSAS MEDICAL MUTUAL INS CO 0.43% 803,049 803,049 248,957 0 16,543 2.06% 0164 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.43% 801,304 1,582,566 570,488 1,358,186 1,889,841 119.42% 0000 14460 PODIATRY INSURNACE COMPANY OF AMERICA A MUTUAL 0.36% 675,224 588,567 218,436 1,110,000 974,969 165.65% 0140 19100 AMCO INSURANCE COMPANY 0.34% 640,743 1,237,769 219,003 1,223 324,614 26.23% 3321 22217 GULF INSURANCE COMPANY 0.26% 490,915 493,663 (63,454) 29,500 1,385,258 280.61% 0508 10801 FORTRESS INSURANCE COMPANY 0.21% 400,585 143,720 66,669 0 55,822 38.84% 0038 35181 EXECUTIVE RISK INDEMNITY INC 0.20% 371,883 448,191 209,491 413,503 2,082,981 464.75% 0775 13714 PHARMACISTS MUTUAL INSURANCE COMPANY 0.20% 370,228 363,362 9,040 2,500 38,680 10.65% 0626 22667 ACE AMERICAN INSURANCE COMPANY 0.15% 280,112 333,122 89,220 75,000 229,155 68.79% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 0.14% 257,243 236,430 (99,804) 375,000 (48,885) -20.68% 0218 20443 CONTINENTAL CASUALTY COMPANY 0.14% 257,190 362,912 (1,481,529) 2,592,660 (2,675,448) -737.22% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.06% 116,125 69,908 (12,215) 13,094 (163,159) -233.39% 0012 23809 GRANITE STATE INSURANCE COMPANY 0.06% 112,819 109,751 5,114 0 18,239 16.62% 0761 21857 AMERICAN INSURANCE COMPANY THE 0.03% 60,093 39,902 17,770 0 22,289 55.86% 0361 19720 AMERICAN ALTERNATIVE INS CORP 0.03% 58,425 44,725 (18,135) 0 (24,045) -53.76% 0350 34207 WESTPORT INSURANCE CORPORATION 0.02% 41,015 36,080 (489) 0 1,097 3.04% 0553 24872 CONNECTICUT INDEMNITY COMPANY THE 0.02% 29,919 30,945 4,632 0 8,301 26.83% 0108 22977 LUMBERMENS MUTUAL CASUALTY CO 0.01% 24,048 226,859 (3,518) 0 (17,591) -7.75% 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.01% 14,177 15,535 9,390 7,500 (8,040) -51.75% 0164 24791 ST PAUL MERCURY INSURANCE COMPANY 0.01% 13,129 19,158 (36,019) 126,667 85,358 445.55% 0748 16551 SAVERS PROPERTY & CASUALTY INS CO 0.00% 6,627 6,548 195 0 342 5.22% 0000 10222 PACO ASSURANCE COMPANY INC 0.00% 5,073 3,906 0 0 0 0.00% A-211 0158 18864 FAIRMONT INSURANCE COMPANY 0.00% 1,688 1,688 1,000 2,000 2,000 118.48% 3321 10819 AMERICAN EQUITY SPECIALTY INSURANCE COMPANY 0.00% 0 0 (26,173) 366,000 (71,722) N/A 0140 11991 NATIONAL CASUALTY COMPANY 0.00% 0 0 (990,211) 0 (175,123) N/A 0084 16691 GREAT AMERICAN INSURANCE COMPANY 0.00% 0 0 637 0 0 N/A 0626 18279 BANKERS STANDARD INSURANCE COMPANY 0.00% 0 737 (23,257) 0 20,463 2776.53% 3321 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0 0 (5,108) 0 4,508 N/A 3321 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0 0 (202) 0 471 N/A MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2003 PAGE 26 SUPPLEMENT EXPERIENCE WITH MARKET SHARE TOTAL MEDICAL MALPRACTICE Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0 0 (125) 0 (1,557) N/A 0091 19682 HARTFORD FIRE INSURANCE COMPANY 0.00% 0 0 (35) (662) (662) N/A 0163 19690 AMERICAN ECONOMY INSURANCE COMPANY 0.00% 0 0 3,648 0 3,234 N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 1,151 0 600 N/A 0038 20281 FEDERAL INSURANCE COMPANY 0.00% 0 0 (79,677) 0 (242,324) N/A 0038 20397 VIGILANT INSURANCE COMPANY 0.00% 0 0 (859) 0 (2,589) N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 0 0 4,737 35,971 (19,376) N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 184,822 256,986 327,639 N/A 0517 20532 CLARENDON NATIONAL INS CO 0.00% 0 0 (3,193) 0 (100,000) N/A 0626 20702 ACE FIRE UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 134,014 820,002 (174,701) N/A 0158 21105 NORTH RIVER INSURANCE COMPANY THE 0.00% 0 0 (20) 0 286 N/A 0158 21113 UNITED STATES FIRE INSURANCE COMPANY 0.00% 0 0 (2,324) 0 (4,335) N/A 3321 21296 ASSOCIATES INSURANCE COMPANY 0.00% 0 0 133,903 0 1,225,000 N/A 0761 21849 AMERICAN AUTOMOBILE INSURANCE CO 0.00% 0 0 (6) 0 (19,865) N/A 0761 21881 NATIONAL SURETY CORPORATION 0.00% 0 0 (41) 0 583 N/A 0626 22713 INSURANCE COMPANY OF NORTH AMERICA 0.00% 0 0 (1,216) 0 2,613 N/A 0626 22748 PACIFIC EMPLOYERS INSURANCE COMPANY 0.00% 0 0 3,796 0 28,655 N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0 0 42,102 263,500 (498,641) N/A 0163 24724 FIRST NATIONAL INS CO OF AMERICA 0.00% 0 0 (2) 0 (4) N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 (155) 0 (332) N/A 0158 25496 TIG INDEMNITY COMPANY 0.00% 0 0 (7,000) 0 0 N/A 3321 25658 TRAVELERS INDEMNITY COMPANY 0.00% 0 0 2,628,832 0 9,290,491 N/A 3321 25674 TRAVELERS INDEMNITY CO OF ILLINOIS 0.00% 0 0 (5,703) 0 (17,124) N/A 0164 25887 UNITED STATES FIDELITY & GUARANTY CO 0.00% 0 0 0 0 (11) N/A 0108 27138 KEMPER CASUALTY INSURANCE COMPANY 0.00% 0 1 0 0 0 0.00% 0091 29459 TWIN CITY FIRE INS CO 0.00% 0 0 575,385 28,610 299,329 N/A 0181 29874 NORTH AMERICAN SPECIALTY INS CO 0.00% 0 0 1,217,061 1,668,283 (2,401,044) N/A 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (109,501) 327,437 (1,839,341) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 303,920 (151,158) 2,448,546 N/A 1125 39152 AMERICAN HEALTHCARE INDEMNITY COMPANY 0.00% 0 0 (3,959) 0 (5,328) N/A 3321 42811 GULF UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 (2,164) 0 15,930 N/A 0626 43575 INDEMNITY INSURANCE CO OF NORTH AMERICA 0.00% 0 0 141 0 0 N/A 0761 21873 FIREMANS FUND INSURANCE COMPANY 0.00% (1,313) 4,646 683,504 9,899,003 5,869,507 126334.63% 1210 35602 OHIC INSURANCE COMPANY -0.01% (12,100) (5,220) 223,055 175,000 (499,362) 9566.32%
TOTAL MEDICAL MALPRACTICE BUSINESS 100.00% 186,479,369 169,970,363 63,162,580 83,749,885 164,309,442 96.67% A-212 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2003 PAGE 26 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Physicians & Surgeons Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
2698 33391 MEDICAL ASSURANCE CO INC THE 22.77% 31,056,652 29,399,356 18,408,214 8,314,555 16,841,139 57.28% 0350 11843 MEDICAL PROTECTIVE COMPANY 21.72% 29,633,352 23,460,996 3,368,871 9,946,258 12,921,039 55.07% 1272 33367 INTERMED INSURANCE COMPANY 16.77% 22,879,772 28,223,866 6,531,181 8,340,401 28,382,815 100.56% 0000 11582 MISSOURI PHYSICIANS MUTUAL 13.82% 18,853,736 4,834,238 1,687,327 0 2,805,640 58.04% 0831 34495 DOCTORS COMPANY AN INTERINS EXCHANGE 7.24% 9,873,431 8,930,470 7,652,971 621,000 7,397,091 82.83% 0212 21687 MID CENTURY INSURANCE COMPANY 4.80% 6,550,946 6,331,377 0 0 0 0.00% 0761 22810 CHICAGO INSURANCE COMPANY 2.78% 3,791,263 6,344,856 2,249,828 13,381,812 19,762,273 311.47% 0861 10686 MEDICAL LIABILITY ALLIANCE 2.75% 3,747,159 2,980,462 272,512 156,667 1,165,167 39.09% 0212 21709 TRUCK INSURANCE EXCHANGE 1.56% 2,123,967 2,068,140 3,765,648 282,439 9,988,292 482.96% 0000 36234 PREFERRED PROFESSIONAL INSURANCE COMPANY 1.47% 2,005,015 1,823,859 1,088,388 2,675,000 4,730,123 259.35% 0000 44083 PREFERRED PHYSICIANS MEDICAL RRG INC 1.26% 1,718,869 1,752,424 339,223 0 752,528 42.94% 2638 15865 NCMIC INSURANCE COMPANY 0.86% 1,171,658 666,309 85,000 0 270,000 40.52% 0000 11704 PHYSICIANS PROFESSIONAL INDEMNITY ASSOCIATION 0.69% 938,833 570,259 49,000 0 279,000 48.93% 0000 34703 KANSAS MEDICAL MUTUAL INS CO 0.59% 803,049 803,049 248,957 0 16,543 2.06% 0000 14460 PODIATRY INSURNACE COMPANY OF AMERICA A MUTUAL 0.49% 675,224 588,567 218,436 1,110,000 974,969 165.65% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 0.27% 375,072 2,205,125 765,236 2,086,500 3,949,533 179.11% 0164 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.06% 85,062 155,911 323,480 815,000 1,369,643 878.48% 0218 20443 CONTINENTAL CASUALTY COMPANY 0.04% 51,137 100,075 (954,904) 2,217,547 (59,815) -59.77% 0218 20427 AMERICAN CASUALTY CO OF READING PA 0.03% 47,357 40,450 61,802 0 248,400 614.09% 0553 24872 CONNECTICUT INDEMNITY COMPANY THE 0.02% 29,919 30,945 4,632 0 8,301 26.83% 0163 24732 GENERAL INSURANCE CO OF AMERICA 0.01% 14,177 15,535 9,390 7,500 (8,040) -51.75% 0000 10222 PACO ASSURANCE COMPANY INC 0.00% 5,073 3,906 0 0 0 0.00% 3321 10819 AMERICAN EQUITY SPECIALTY INSURANCE COMPANY 0.00% 0 0 (26,173) 366,000 (71,722) N/A 0140 11991 NATIONAL CASUALTY COMPANY 0.00% 0 0 (990,211) 0 (175,123) N/A 0084 16691 GREAT AMERICAN INSURANCE COMPANY 0.00% 0 0 637 0 0 N/A 3321 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 000060N/A 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.00% 0 0 0 33,780 32,372 N/A 0163 19690 AMERICAN ECONOMY INSURANCE COMPANY 0.00% 0 0 3,648 0 3,234 N/A 0163 19704 AMERICAN STATES INSURANCE COMPANY 0.00% 0 0 1,151 0 600 N/A 0038 20281 FEDERAL INSURANCE COMPANY 0.00% 0 0 (79,677) 0 (242,324) N/A 0038 20397 VIGILANT INSURANCE COMPANY 0.00% 0 0 (859) 0 (2,589) N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 0 0 1,577 0 14,863 N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 147,175 256,986 328,007 N/A 0517 20532 CLARENDON NATIONAL INS CO 0.00% 0 0 (3,193) 0 (100,000) N/A 3321 21296 ASSOCIATES INSURANCE COMPANY 0.00% 0 0 133,903 0 1,225,000 N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0 0 42,102 263,500 (310,501) N/A 0163 24724 FIRST NATIONAL INS CO OF AMERICA 0.00% 0 0 (2) 0 (4) N/A 0163 24740 SAFECO INSURANCE CO OF AMERICA 0.00% 0 0 (155) 0 (332) N/A 0181 29874 NORTH AMERICAN SPECIALTY INS CO 0.00% 0 0 1,217,061 1,668,283 (2,282,340) N/A 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (83,708) 327,437 (1,793,131) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 138,000 0 1,187,552 N/A 1125 39152 AMERICAN HEALTHCARE INDEMNITY COMPANY 0.00% 0 0 (3,959) 0 (5,328) N/A A-213 1210 35602 OHIC INSURANCE COMPANY -0.01% (12,100) (5,220) 223,055 0 (64,766) 1240.73%
TOTAL PHYSICIANS & SURGEONS BUSINESS 100.00% 136,418,623 121,324,955 46,895,564 52,870,665 109,538,169 90.28% MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2003 PAGE 26 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Dentists Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0350 11843 MEDICAL PROTECTIVE COMPANY 36.81% 2,513,983 2,432,586 856,410 415,000 (115,000) -4.73% 1272 33367 INTERMED INSURANCE COMPANY 27.25% 1,860,959 2,295,628 (237,947) 1,112,500 (1,034,056) -45.04% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 17.44% 1,190,991 877,496 0 0 653,136 74.43% 2698 33391 MEDICAL ASSURANCE CO INC THE 8.72% 595,812 545,021 (62,697) (107,500) (57,360) -10.52% 0508 10801 FORTRESS INSURANCE COMPANY 5.87% 400,585 143,720 66,669 0 55,822 38.84% 0012 23809 GRANITE STATE INSURANCE COMPANY 1.65% 112,819 109,751 5,114 0 18,239 16.62% 0244 10677 CINCINNATI INS CO THE 1.28% 87,215 79,186 14,864 37,855 10,413 13.15% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.94% 64,218 35,398 0 0 32,397 91.52% 0000 11582 MISSOURI PHYSICIANS MUTUAL 0.15% 10,052 1,761 0 0 0 0.00% 0012 19429 INSURANCE CO OF THE STATE OF PA 0.00% 0 0 (125) 0 (1,557) N/A 0012 23817 ILLINOIS NATIONAL INSURANCE COMPANY 0.00% 0000(188,140) N/A 0164 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0 4,586 (1,512) 0 (4,709) -102.68% 0108 22977 LUMBERMENS MUTUAL CASUALTY CO -0.10% (6,594) (62,205) 0 0 0 0.00%
TOTAL DENTISTS BUSINESS 100.00% 6,830,040 6,462,928 640,776 1,457,855 -630,815 -9.76% A-214 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2003 PAGE 26 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Nurses Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
2698 33391 MEDICAL ASSURANCE CO INC THE 93.93% 502,932 431,845 0 0 0 0.00% 0164 24767 ST PAUL FIRE & MARINE INSURANCE CO 4.10% 21,930 64,778 30,867 0 59,702 92.16% 0000 11582 MISSOURI PHYSICIANS MUTUAL 1.77% 9,486 2,702 0 0 0 0.00% 0108 22977 LUMBERMENS MUTUAL CASUALTY CO 0.41% 2,198 20,735 0 0 0 0.00% 0108 27138 KEMPER CASUALTY INSURANCE COMPANY 0.00% 010000.00% 0244 10677 CINCINNATI INS CO THE -0.21% (1,139) (789) (249,225) 0 (2,537) 321.55%
TOTAL NURSES BUSINESS 100.00% 535,407 519,272 (218,358) 0 57,165 11.01% A-215 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2003 PAGE 26 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Hospitals Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0861 27642 MISSOURI HOSPITAL PLAN 84.15% 26,846,780 22,475,433 6,328,855 4,368,098 14,024,043 62.40% 0350 34916 FIRST SPECIALTY INSURANCE CORPORATION 10.24% 3,265,820 2,955,323 636,728 0 6,634,851 224.51% 0212 16535 ZURICH AMERICAN INSURANCE COMPANY 2.16% 688,300 578,206 (26,524) 637,230 2,143,263 370.67% 0244 10677 CINCINNATI INS CO THE 2.06% 658,529 654,456 (3,485) 863,163 201,007 30.71% 0626 22667 ACE AMERICAN INSURANCE COMPANY 0.88% 280,112 333,122 89,220 75,000 229,155 68.79% 2698 33391 MEDICAL ASSURANCE CO INC THE 0.40% 127,897 109,770 34,880 0 31,911 29.07% 0218 20443 CONTINENTAL CASUALTY COMPANY 0.11% 35,198 101,234 (348,300) 18,000 (518,473) -512.15% 0350 11843 MEDICAL PROTECTIVE COMPANY 0.00% 0 47,612 106,163 10,000 163,000 342.35% 0626 18279 BANKERS STANDARD INSURANCE COMPANY 0.00% 0 737 (23,257) 0 20,463 2776.53% 3321 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 00004,448 N/A 3321 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0000471 N/A 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.00% 00001,000 N/A 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 0.00% 0 0 0 1,750,000 51,000 N/A 0218 20427 AMERICAN CASUALTY CO OF READING PA 0.00% 0 0 (214,580) 0 (450,320) N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 00004,796 N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 (8,028) 0 75,328 N/A 0626 20702 ACE FIRE UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 134,014 820,002 (174,701) N/A 0761 21873 FIREMANS FUND INSURANCE COMPANY 0.00% 0 0 947,383 9,919,700 371,769 N/A 3321 22217 GULF INSURANCE COMPANY 0.00% 0000277,398 N/A 0626 22713 INSURANCE COMPANY OF NORTH AMERICA 0.00% 0 0 (1,216) 0 2,613 N/A 0626 22748 PACIFIC EMPLOYERS INSURANCE COMPANY 0.00% 0 0 3,796 0 28,655 N/A 0164 24767 ST PAUL FIRE & MARINE INSURANCE CO 0.00% 0 457,105 175,824 249,304 222,413 48.66% 0164 24791 ST PAUL MERCURY INSURANCE COMPANY 0.00% 0 0 (448) 0 (1,492) N/A 3321 25674 TRAVELERS INDEMNITY CO OF ILLINOIS 0.00% 0000(15,309) N/A 0038 35181 EXECUTIVE RISK INDEMNITY INC 0.00% 0 68,678 209,491 413,503 1,388,430 2021.65% 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 (15,880) 0 62,126 N/A 1210 35602 OHIC INSURANCE COMPANY 0.00% 0 0 0 175,000 (434,596) N/A 3321 42811 GULF UNDERWRITERS INSURANCE COMPANY 0.00% 0 0 (2,164) 0 15,930 N/A
TOTAL HOSPITAL BUSINESS 100.00% 31,902,636 27,781,676 8,022,472 19,299,000 24,359,179 87.68% A-216 MISSOURI DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION 2003 PAGE 26 SUPPLEMENT EXPERIENCE WITH MARKET SHARE MEDICAL MALPRACTICE - Other Direct Direct Loss Direct Direct NAIC NAIC Market Written Earned Adjustment Paid Incurred Loss Group Code Company Name Share Premium Premium Expense Losses Losses Ratio
0158 25534 TIG INSURANCE COMPANY 25.56% 2,758,071 4,251,889 2,010,217 2,480,880 3,592,285 84.49% 0218 20427 AMERICAN CASUALTY CO OF READING PA 16.11% 1,738,564 1,632,021 235,713 1,033,058 2,488,110 152.46% 0761 22810 CHICAGO INSURANCE COMPANY 11.01% 1,187,754 1,987,763 704,842 4,192,352 6,191,270 311.47% 0244 10677 CINCINNATI INS CO THE 10.74% 1,159,167 1,089,350 554,229 1,171,332 1,577,960 144.85% 0164 24767 ST PAUL FIRE & MARINE INSURANCE CO 6.43% 694,312 900,186 41,829 293,882 242,792 26.97% 0140 19100 AMCO INSURANCE COMPANY 5.94% 640,743 1,237,769 219,003 1,223 324,614 26.23% 0012 19445 NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA 4.55% 491,351 510,402 218,618 0 (100,358) -19.66% 3321 22217 GULF INSURANCE COMPANY 4.55% 490,915 493,663 (63,454) 29,500 1,107,860 224.42% 0038 35181 EXECUTIVE RISK INDEMNITY INC 3.45% 371,883 379,513 0 0 694,551 183.01% 0775 13714 PHARMACISTS MUTUAL INSURANCE COMPANY 3.43% 370,228 363,362 9,040 2,500 38,680 10.65% 0000 18767 CHURCH MUTUAL INSURANCE COMPANY 2.38% 257,243 236,430 (99,804) 375,000 (48,885) -20.68% 2638 15865 NCMIC INSURANCE COMPANY 1.87% 201,921 173,220 1,113,329 151,700 1,111,184 641.49% 0218 20443 CONTINENTAL CASUALTY COMPANY 1.58% 170,855 161,603 (178,325) 357,113 (2,097,160) -1297.72% 0761 21857 AMERICAN INSURANCE COMPANY THE 0.56% 60,093 39,902 17,770 0 22,289 55.86% 0361 19720 AMERICAN ALTERNATIVE INS CORP 0.54% 58,425 44,725 (18,135) 0 (24,045) -53.76% 0012 19380 AMERICAN HOME ASSURANCE COMPANY 0.48% 51,907 34,510 (12,215) 13,094 (196,556) -569.56% 0350 34207 WESTPORT INSURANCE CORPORATION 0.38% 41,015 36,080 (489) 0 1,097 3.04% 0108 22977 LUMBERMENS MUTUAL CASUALTY CO 0.26% 28,444 268,329 (3,518) 0 (17,591) -6.56% 0164 24791 ST PAUL MERCURY INSURANCE COMPANY 0.12% 13,129 19,158 (35,571) 126,667 86,850 453.34% 0748 16551 SAVERS PROPERTY & CASUALTY INS CO 0.06% 6,627 6,548 195 0 342 5.22% 0158 18864 FAIRMONT INSURANCE COMPANY 0.02% 1,688 1,688 1,000 2,000 2,000 118.48% 3321 19038 TRAVELERS CASUALTY AND SURETY CO 0.00% 0 0 (5,108) 0 0 N/A 3321 19070 STANDARD FIRE INSURANCE COMPANY 0.00% 0 0 (202) 0 0 N/A 0091 19682 HARTFORD FIRE INSURANCE COMPANY 0.00% 0 0 (35) (662) (662) N/A 0218 20478 NATIONAL FIRE INS CO OF HARTFORD 0.00% 0 0 3,160 35,971 (39,035) N/A 0218 20494 TRANSPORTATION INSURANCE COMPANY 0.00% 0 0 45,675 0 (75,696) N/A 0158 21105 NORTH RIVER INSURANCE COMPANY THE 0.00% 0 0 (20) 0 286 N/A 0158 21113 UNITED STATES FIRE INSURANCE COMPANY 0.00% 0 0 (2,324) 0 (4,335) N/A 0212 21709 TRUCK INSURANCE EXCHANGE 0.00% 0 0 (17,030) 0 7,493 N/A 0761 21849 AMERICAN AUTOMOBILE INSURANCE CO 0.00% 0 0 (6) 0 (19,865) N/A 0761 21881 NATIONAL SURETY CORPORATION 0.00% 0 0 (41) 0 583 N/A 0158 25496 TIG INDEMNITY COMPANY 0.00% 0 0 (7,000) 0 0 N/A 3321 25658 TRAVELERS INDEMNITY COMPANY 0.00% 0 0 2,628,832 0 9,290,491 N/A 3321 25674 TRAVELERS INDEMNITY CO OF ILLINOIS 0.00% 0 0 (5,703) 0 (1,815) N/A 0164 25887 UNITED STATES FIDELITY & GUARANTY CO 0.00% 0 0 0 0 (11) N/A 0091 29459 TWIN CITY FIRE INS CO 0.00% 0 0 575,385 28,610 299,329 N/A 0181 29874 NORTH AMERICAN SPECIALTY INS CO 0.00% 0 0 0 0 (118,704) N/A 0659 32654 MISSOURI PHYSICIANS ASSOCIATES 0.00% 0 0 (25,793) 0 (46,210) N/A 0218 35289 CONTINENTAL INSURANCE COMPANY THE 0.00% 0 0 181,800 (151,158) 1,198,868 N/A 0626 43575 INDEMNITY INSURANCE CO OF NORTH AMERICA 0.00% 0 0 141 0 0 N/A 0861 10686 MEDICAL LIABILITY ALLIANCE 0.00% (359) 8,775 0 0 0 0.00% 0761 21873 FIREMANS FUND INSURANCE COMPANY -0.01% (1,313) 4,646 (263,879) (20,697) 5,497,738 118332.72% A-217
TOTAL OTHER BUSINESS 100.00% 10,792,663 13,881,532 7,822,126 10,122,365 30,985,744 223.22%
A-218
Definition of Terms
Cash Flow Loss Ratio – Direct paid losses divided by direct written premium.
Economic Damages – The amount of damages arising from pecuniary harm including, without limitation, medical damages and those damages arising from lost wages and lost earning capacity.
Direct Incurred Losses – Total indemnity costs of insured claims, including both sums already paid and estimates of those yet to be paid, before reinsurance has been ceded and/or assumed.
Direct Losses Paid – Total indemnity costs of insured claims, including amounts paid in the current year for claims arising from coverage in prior years, before reinsurance has been ceded and/or assumed.
Direct Premium Earned – The part of premiums attributable to the coverage already provided in a given period before reinsurance has been ceded, and/or assumed.
Direct Premium Written – Amount charged when a policyholder contracts for insurance coverage before reinsurance has been ceded and/or assumed.
Loss Ratio – Direct incurred losses divided by direct earned premium.
Non-Economic Damages – The amount of damages arising from non-pecuniary harm including, without limitation, paid, suffering, mental anguish, inconvenience, physical impairment, disfigurement, loss of capacity to enjoy life and loss of consortium.
Non-Admitted Market – Sales by surplus lines carriers and risk retention groups. Surplus lines carriers have no Missouri license, and Department does not approve policy forms or review rates. These insurers, however, have a license in at least one state and have demonstrated the financial ability to write policies for hard-to-obtain coverage in Missouri. Risk retention groups – whose members have similar needs for liability coverage – are organized under federal law and exempt from regulation except by the state that they chose as the domicile for their license.
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A-221 APPENDIX D
Missouri Jury Verdict Data
A-222 v i 0 U-1 0 Bureau Justice Statistics 1 CD 0 FinalAmt 74: Winner bodypart severity Economic Amt1Non-Economic A-223
1St. Louis, MO Plaintiff Lungs Infection 1479000 0 14790001 0 St. Louis,MO Defendant Unknown Unknown 0
St.Louis, MO Defendant Spine/back Chronic pain 0 0 0 0 1St. Louis, MO Defendant 1Spine/back Nerve damage, no paralysis 0 0 0
1St. Louis, MO Plaintiff Eye(s) Loss of sight 35000 0 1 368941 - 0 0 0 V) ,-4- C 0 E 0 r Defendant Eye(s) Loss of sight 0 1St. Louis,MO Defendant Other internal org Chronic pain 0 0 t. Louis, MO Defendant Leg/hip/knee Nerve damage, no paralysis 0 0 0 1St. Louis, MO Defendant Other Other 0 1St. Louis, MO Defendant Heart Other 0 0 [St. Louis, MO Defendant Mouth/teeth/jaW Chronic pain 0 0
1St.Louis, MO Defendant Heart Other 0 0 0 0 0
St. Louis,MO Defendant [Leg/hip/knee Broken bone(s) 0 0 0 Loss or impariment of St. Louis, MO Defendant Heart
function/ability 0 0 0 0 1St. Louis, MO Defendant Other Other 0 0 0 0 Loss or impariment of St. Louis, MO Defendant Brain 0 0 function/ability 0 0 Boone,MO Defendant Breast(s) Loss/replacement 0 0 0 0 'Buchanan, MO Defendant Spine/back Infection 0 MO Plaintiff Heart Other 55000 45000 l00000l O cn 0 [B[Buchuchanan,anan, MO Plaintiff Heart Other O O O 400000 10000001 Loss or impariment of w -, = Greene, MO Defendant cu 0 0 function/ability o 0 [Greene, MO Defendant Face/ear(s) Paralysis o 0 Greene, MO Plainti ff Colon Cancer 162000 500000 18S30 0 0 Greene, MO Defendant Mouth/teeth/j Chronic pain 0 1 - NJ I 0 0
. < VI A. co tz_ er o cs- (D Winner severity GENERAL/COMPEN Punitive Damag FINAL AWA -0 ..
St. Louis, MO Plainti ff Spine/back Nerve 350000 0 350778 0 0 St.1 Louis, MO Defendent Leg/hip muscle,tendon,ligament O • • •
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A-224 • • ▪ •
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A-232
Medical Liability Reform - NOW! June 14, 2005
A compendium of facts supporting medical liability reform and debunking arguments against reform.
American Medical Association 515 North State Street Chicago, Illinois 60610
This document was developed by the American Medical Association (AMA). This resource is provided for informational and reference purposes only and should not be construed as the legal advice of the AMA. Specific legal questions regarding this information should be addressed by one's own legal counsel.
This resource contains data from third parties. Though the AMA works diligently to supply reliable information, the AMA assumes no responsibility for the accuracy and/or completeness of the statements and data of third parties. This document includes links to third party websites that are not under the control of the AMA, and, therefore, the AMA assumes no responsibility for their content. Inclusion of any third party information does not imply endorsement by the AMA.
The most current version of Medical Liability Reform - Now! is accessible electronically at http://www.ama- assn.org/go/mlrnow. It is highly recommended that readers refer to only the most current version of the document. Information in this document is subject to change and may be outdated. The AMA accepts no liability resulting from reliance being placed upon outdated information contained in this document, nor for reliance upon outdated versions of this document. Users are cautioned to independently verify the correctness of information contained in the document that may have become outdated.
A-233
Table of Contents
Section I. Identification of the Problem 2-22 A. Recurrence of an Old Problem? 2 B. Second Liability Crisis: 1980s 2 C. The Current Liability Crisis: Trends in Jury Awards 2 D. The Current Liability Crisis: Access to Care 4 E. The Current Liability Crisis: Costs 5 F. The Current Liability Crisis: Defensive Medicine 8 G. Activity in the Crisis States 9
Section II. Solutions 23-45 A. Studies and Expert Opinions Confirm that Certain types of Reform Lower Costs and Improve Access 23 B. State Efforts to Enact Caps on Non-Economic Damages 24 1. States that Have Enacted a Cap on Non-Economic Damages 24 2. Effectiveness of Caps 25 3. Recent State Legislation 26 4. Election 2004 Ballot Measures 34 5. Judicial Activity 36 6. Favorable State Case Law 38 7. California’s Solution: MICRA 40 C. Federal Legislation 42
Section III. Responding to Other Arguments 45-55 A. Public Citizen and Other Anti-Tort Reform Groups’ Concerns 45 B. Proposition 103 Myth 47 C. Myths Raised by Opponents of MLR in Relation to H.R. 5 49 D. Additional Myths 52 E. GAO Reports 54 F. Health Affairs Article 55
Section IV. Patient Safety Efforts 56-59
Index 60-70
© 2005 American Medical Association. All rights reserved. 1 A-234
I. Identification of the Problem
A. Recurrence of an Old Problem?
1. The medical liability insurance system experienced a period of crisis in the early 1970s, when several private insurers left the market because of rising claims and inadequate rates.
2. This exodus of capacity resulted in an availability crisis and created an affordability issue for those physicians and hospitals lucky enough to find insurance.
3. Over the next fifteen years, various attempts were made to ease the explosion in claims costs: tort reform, increased diagnostic testing, improved peer review and increased communication between physicians and patients. Aggressive campaigns to reform state laws governing medical liability lawsuits began in the 1970s and were successful in a number of states including California, Louisiana, Indiana and New Mexico.
4. In California, in particular, between 1968 and 1974, the number of medical liability claims doubled and the number of losses in excess of $300,000 increased 11-fold, from 3 to 34. Losses amounting to $180 for each $100 of premium led most commercial insurers to conclude that the practice of medicine was uninsurable, and they refused to provide medical liability insurance at any price. In California, access to care was threatened, and a special session of the California legislature led to enactment of the Medical Injury Compensation Reform Act of 1975 (MICRA).1
B. Second Liability Crisis: 1980s
1. During the 1980s, the second crisis – one of affordability – shook the industry, as claim frequency and severity increased again and premiums rose rapidly.
2. The affordability crisis had a dramatic effect. Physicians in specialties such as obstetrics and gynecology cut back on high-risk procedures and high-risk patients to reduce their risks and hold down their premiums.
3. Some physicians closed practices in states where premiums and the risk of being sued were especially high.
C. The Current Liability Crisis: Trends in Jury Awards and Settlements
1 Richard E. Anderson, Commentaries Defending the Practice of Medicine, 164 ARCHIVE OF INTERNAL MED. 1173, 1173-4 (June 14, 2004).
© 2005 American Medical Association. All rights reserved. 2 A-235
1. Recent data from the Physician Insurers Association of America illustrates the problem as it exists today.2
2. The median medical liability jury award in medical liability cases nearly doubled from 1997 to 2003, increasing from $157,000 to $300,000.3 The average award increased from $347,134 in 1997 to $430,727 in 2002.4
3. The growth in settlements has mirrored that of jury awards. Median and average settlements increased from $100,000 to $200,000, and from $212,861 to $322,544 between 1997 and 2002, respectively.5
4. Overall, more than 70% of medical liability claims in 2003 were closed without payment to the plaintiff.6 Plaintiffs lost the majority of their cases that went to a jury. Of the 5.8% of claims that went to jury verdict, the defendant won 86.2% of the time.7
5. However, physicians who win at trial still have large fees to pay for their defenses. Average defense costs were $87,720 per claim in cases where the defendant prevailed at trial.8 And in cases where the claim was dropped or dismissed, costs to defendants averaged $17,408. 9
6. The severity of very large awards is increasing. According to a recent study by the Blue Cross/Blue Shield Association, plans in crisis states believe that inappropriately large jury verdicts are the primary factor contributing to increasing medical liability premiums.10
7. Jury Verdict Research (JVR) provides summary statistics on the small percentage of claims that reach the trial stage. The estimates from the Physician Insurers Association of America (PIAA) provide a broader picture of closed claims because they include claims that are dropped and settled in addition to those that are tried. PIAA also provides information on defense costs while JVR does not. Despite the more limited scope of the JVR estimates, they also show that awards are increasing.
2 PHYSICIAN INSURERS ASS’N OF AM., PIAA CLAIM TREND ANALYSIS: 2003 ed. (2004). 3 Id. at exhibit 6a-2. 4 Id. 5 Id. at exhibit 6b-2. 6 Id. at exhibit 1. 7 Id. at exhibits 1, 6a. 8 Id. at exhibit 6a-4. 9 Id. at exhibit 6b-4. 10 BLUE CROSS BLUE SHIELD ASS’N, THE MALPRACTICE INSURANCE CRISIS: THE IMPACT ON HEALTHCARE COST AND ACCESS 3 (2003).
© 2005 American Medical Association. All rights reserved. 3 A-236 D. The Current Liability Crisis: Access to Care
1. A recent poll showed that 72% of Americans favor a law that guarantees full payment of lost wages and medical expenses but reasonably limits the amount that can be awarded for pain and suffering in medical liability cases.11
2. Forty-five percent of hospitals reported that the professional liability crisis has resulted in the loss of physicians and/or reduced coverage in emergency departments.12 For the rest of the states, over half of the Blue Cross/Blue Shield plans feel it is an “inevitable” problem.13
3. A Blue Cross/Blue Shield survey shows that rising medical liability premiums are causing access and cost problems in crisis states. 14
4. Residents’ Concerns
a. Medical residents’ growing concerns about liability issues may cause them to avoid choosing high-risk specialties or practicing in a crisis state. 62% of medical residents reported that liability issues were their top concern in 2003—surpassing any other concern, and representing an enormous increase from 2001, when only 15% of residents said liability was a concern.15
b. Some medical residents report the current medical liability system also works against physicians trying to practice evidence-based medicine (EBM). One recent example is from a resident who, despite utilizing the best practices of EBM, watched in horror as he was sued and the plaintiff’s attorney portrayed EBM as nothing more than “a cost-saving method,” and “the few lives saved were not worth the money.” Thus, despite the resident showing how he followed “conscientious, explicit, and judicious use of the current best evidence in making clinical decisions about the care of individual patients,” the plaintiff’s attorney used it against him. The resident was exonerated, but the residency program was found liable for $1 million.16
11 Health Coalition on Liability and Access, More Than Seven-In-Ten (72%) Americans Believe That Health Care Costs Are Rising Because of Medical Liability Lawsuits (2004), available at http://www.hcla.org/polldata/2004- HCLA-Poll.pdf (last visited May 21, 2004). 12 AM. HOSP. ASS’N., PROF’L LIABILITY INS. SURVEY (2003). 13 Id. at 8. 14 BLUECROSS BLUESHIELD ASS’N, supra note 10, at 4. 15 MERITT, HAWKINS & ASSOC., SUMMARY REPORT: 2003 SURVEY OF FINAL YEAR MED. RESIDENTS 5 (2003). 16 Daniel Merinstein, Winners and Losers 291 JAMA 15, 15-6 (2004).
© 2005 American Medical Association. All rights reserved. 4 A-237 c. Even in states with caps, such as Wisconsin, residents may not be protected from massive damage awards. In October, 2004, a loophole in Wisconsin’s $500,000 non-economic damages cap was exploited to permit a total award of more than $26 million against a resident, who was found to not be protected by the cap because he was not yet a fully licensed physician.17
5. Students’ Concerns
a. Students, too, are affected by the current crisis. In fact, half of the respondents of a recent AMA survey indicated the current medical liability environment was a factor in their specialty choice.
b. Thirty-nine percent said the medical liability environment was a factor in their decision about a state in which they would like to complete residency training.
c. Sixty-one percent of students reported they are extremely concerned the current medical liability environment is decreasing physicians’ ability to provide quality medical care.
d. Forty-eight percent of students in their third or fourth year of medical school indicated the liability situation was a factor in their specialty choice.18
E. The Current Liability Crisis: Costs
1. Altogether, medical liability adds billions to the cost of health care each year – which means higher health insurance premiums and higher medical costs for all Americans, according to estimates in a recent U.S. Department of Health and Human Services report.19
2. On September 25, 2002, HHS issued an update on the medical liability crisis. This update reported on the results of a survey conducted by Medical Liability Monitor (MLM), an independent reporting service that tracks medical professional liability trends and issues. Based on the MLM data, HHS concluded that the crisis
17 Derrick Nunnally, Payout in death may be state’s biggest— But challenge looms for ‘loophole’ allowing jury to ignore malpractice cap, MILWAUKEE J. SENTINEL, Oct. 23, 2004. 18 DIV. OF MKT. RESEARCH & ANALYSIS, AM. MED. ASS’N, AMA SURVEY: MED. STUDENTS’ OPINIONS OF THE CURRENT MED. LIABILITY ENV’T (2003), available at http://www.ama-assn.org/ama1/pub/upload/mm/31/ms- mlrhighlights.pdf (last visited Feb. 16, 2004). 19 OFFICE OF THE ASSISTANT SEC’Y FOR PLANNING AND EVALUATION, U.S. DEP’T OF HEALTH AND HUMAN SERVS., ADDRESSING THE NEW HEALTH CARE CRISIS: REFORMING THE MEDICAL LITIGATION SYSTEM TO IMPROVE THE QUALITY OF HEALTH CARE 11 (2003) [hereinafter ADDRESSING THE NEW HEALTH CARE CRISIS].
© 2005 American Medical Association. All rights reserved. 5 A-238 had become worse. 20 The federal government reported that:
The cost of the excesses of the litigation system are reflected in the rapid increases in the cost of liability insurance coverage. Premiums are spiking across all specialties in 2002. When viewed alongside previous double-digit increases in 2000 and 2001, the new information further demonstrates that the litigation system is threatening health care quality for all Americans as well as raising the costs of health care for all Americans. (emphasis added)21
3. HHS also stated that the direct cost of medical liability coverage and the indirect cost of defensive medicine increases the amount the federal government must pay for Medicare, Medicaid, the State Children's Health Insurance Program, Veterans' Administration health care, health care for federal employees, and other government programs by as much as $47.5 billion per year. 22
4. HHS issued its third report on the medical liability crisis on March 3, 2003. This report provided updated figures documenting the scope of the crisis, including a revised update on the costs borne by the federal government. This report found that reasonable limits on non-economic damages (e.g., pain and suffering, mental anguish, physical impairment, etc.) would reduce the amount of taxpayers’ money the federal government spends by up to $50.6 billion per year.23
5. Evidence that the litigation system is broken is further established in a study released by Tillinghast-Towers Perrin on December 10, 2003.24 Medical liability costs have risen an average of 11.9% a year since 1975, outpacing increases in overall U.S. tort costs (9.3%).25
a. Tillinghast reported that “U.S. tort costs grew by 13.3% in 2002, on the heels of a 14.4% increase in 2001.” This growth far outpaced trends of the past decade, and the
20 See OFFICE OF THE ASSISTANT SEC’Y FOR PLANNING AND EVALUATION, U.S. DEP’T OF HEALTH AND HUMAN SERVS., UPDATE ON THE MEDICAL LITIGATION CRISIS: NOT THE RESULT OF THE “INSURANCE CYCLE” (2002) [hereinafter INSURANCE CYCLE], available at http://heal-fl-health-care- pdf.netcomsus.com/resources_update_report.doc (last visited Feb. 3, 2004). 21 Id. at 3. 22 OFFICE OF THE ASSISTANT SEC’Y FOR PLANNING AND EVALUATION, U.S. DEP’T OF HEALTH AND HUMAN SERVS., CONFRONTING THE NEW HEALTH CARE CRISIS, IMPROVING HEALTH CARE QUALITY & LOWERING COSTS BY FIXING OUR MED. LIABILITY SYS. 8 (2002) [hereinafter CONFRONTING THE NEW HEALTH CARE CRISIS], available at http://aspe.hhs.gov/daltcp/reports/litrefm.pdf (last visited Feb. 3, 2004). 23 ADDRESSING THE NEW HEALTH CARE CRISIS, supra note 19, at 11. 24 TILLINGHAST-TOWERS PERRIN, U.S. TORT COSTS: 2003 UPDATE: TRENDS AND FINDINGS ON THE COST OF THE U.S. TORT SYSTEM (2003) [hereinafter TILLINGHAST-TOWERS PERRIN], available at http://www.towersperrin.com/tillinghast/publications/reports/2003_Tort_Costs_Update/Tort_Costs_Trends_2003_U pdate.pdf (last visited Feb. 3, 2004). 25 Id. at 2.
© 2005 American Medical Association. All rights reserved. 6 A-239 current level of costs is “equivalent to a 5% tax on wages.”26 This is the only study that tracks the cost of the U.S. tort system from 1950 to 2002 and compares the growth of tort costs with increases in various U.S. economic indicators. Some of the key findings of this study are stunning:
b. The U.S. tort system is a highly inefficient method of compensating injured parties, returning less than 50 cents on the dollar to people it is designed to help and returning only 22 cents to compensate for actual economic loss.27
c. As of 2002, U.S. tort costs accounted for slightly more than 2% of GDP, reflecting the highest ratio to GDP since 1990.28
d. While the cost of the U.S. tort system has increased one hundred fold over the last fifty years, GDP has grown by a factor of only 34.29
e. Only $0.28 of every dollar of premium is paid in indemnity—the rest is consumed in attorneys’ fees and administrative expenses. Of the $0.28 that goes to indemnity, only 20% is for medical expenses. Thus, less than 6% of medical liability premium costs are for health care.30
6. The vast majority of medical liability claims, more than 70%, do not result in any payments to patients.31 Fewer than 1% of cases result in trial victories for plaintiffs.32
7. Blue Cross/Blue Shield’s health plans report that approximately half of the plans expect Ob-Gyn (obstetrical and gynecological) and surgical fees to increase as a result of increased professional liability premiums.33
8. Patients are aware of the impact of lawsuits on healthcare costs. Seventy-one percent (71%) agree that medical liability litigation is driving up health care costs.34
9. An April 2002 PricewaterhouseCoopers study “The Factors Fueling Rising Healthcare Costs” concluded that litigation
26 Id. at 1. 27 Id. at 1-2. 28 Id. at 19, 20. 29 Id. at 1. 30 Richard A. Anderson, Defending the Practice of Medicine, 164 ARCHIVES OF INTERNAL MED. 1173, 1175 (June 14, 2004). 31 PHYSICIAN INSURERS ASS’N OF AM., supra note 2, at exhibit 1. 32 PHYSICIAN INSURERS ASS’N OF AM., supra note 4, at exhibit 1, 6a. 33 BLUE CROSS BLUE SHIELD ASS’N, supra note 10, at 2. 34 WIRTHLIN WORLDWIDE, THE MED. LIABILITY CRISIS: A FED. PROBLEM THAT REQUIRES A FED. SOLUTION, available at http://www.hcla.org (Last visited Feb. 12, 2004).
© 2005 American Medical Association. All rights reserved. 7 A-240 accounted for 7% of the increase in rising costs of health insurance premiums. “Litigation” includes the effects of defensive medicine, liability premiums, risk management and reinsurance, outsized awards and legal costs, and class action lawsuits.35
F. The Current Liability Crisis: Defensive Medicine
1. Defensive medicine practices include tests and treatments that are performed to help avoid lawsuits.
a. A majority (59%) of physicians believe that the fear of liability discourages open discussion and thinking about ways to reduce health care errors.36
b. Over three-fourths (76%) of physicians believe that concern about medical liability litigation has negatively affected their ability to provide quality care in recent years.37
2. The costs of defensive medicine are estimated to be between $70- $126 billion per year. These costs could be significantly reduced by medical liability reforms.38
3. Defensive medicine takes many forms as physicians respond to the breakdown of access to care, including: referring patients to emergency departments, safety net hospitals and academic health centers; specialists declining to take call in the emergency department; and specialists declining elective referrals from emergency departments and safety net clinics, especially for uninsured patients.39
4. 69% of students whose professors discussed the liability situation said the professors also discussed defensive medicine, including increasing unnecessary or excessive care.40
5. Of Blue Cross/Blue Shield plans surveyed, those in crisis states are two and a half times more likely to identify defensive medicine as “already a very serious problem” in relation to cost increases.41
35 PRICEWATERHOUSECOOPERS, AM. ASS’N OF HEALTH PLANS, THE FACTORS FUELING RISING HEALTHCARE COSTS, 3 (2002), available at http://www.aahp.org/InternalLinks/PwCFinalReport.pdf (last visited Feb. 12, 2004). 36 HARRISINTERACTIVE INC., COMMON GOOD, COMMON GOOD FEAR OF LITIGATION STUDY: THE IMPACT ON MED. 65 (2002), available at http://ourcommongood.com/library/download/litrprt.pdf?item_id=10032 (last visited Feb. 12, 2004). 37 Id. at 57. See also, Stuart Taylor & Evan Thomas, Civil Wars, NEWSWEEK, Dec. 15, 2003 (detailing America’s increasingly litigious culture and its repercussions in the day to day work of physicians and other professionals). 38 ADDRESSING THE NEW HEALTH CARE CRISIS, supra note 19. 39 ROBERT BERENSON ET AL., CTR. FOR STUDYING HEALTH SYS. CHANGE., Medical Malpractice Liability Crisis Meets Markets: Stress in Unexpected Places (2003), available at http://www.hschange.org/CONTENT/605/?words=malpractice (last visited Feb. 3, 2004). 40 DIV. OF MKT. RESEARCH & ANALYSIS, AM. MED. ASS’N, supra note 18. 41 BLUECROSS BLUESHIELD ASS’N, supra note 10, at 3.
© 2005 American Medical Association. All rights reserved. 8 A-241 G. Activity in the Crisis States
1. The September 2002 HHS update highlights rapid liability insurance rate escalation in states that have not established reasonable limits on unquantifiable and arbitrary non-economic damage awards. The government’s report states that:
... 2001 premium increases in states without litigation reform ranged from 30%-75%. In 2002, the situation has deteriorated. States without reasonable limits on non-economic damages have experienced the largest increases by far, with increases of between 36%-113% in 2002. States with reasonable limits on non-economic damages have not experienced the same rate spiking. (emphasis added)42
2. The Current Liability Crisis: The Crisis States43
a. The AMA has identified the following twenty states currently experiencing a medical liability crisis: Arkansas, Connecticut, Florida, Georgia, Illinois, Kentucky, Massachusetts, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Washington, Nevada, West Virginia, and Wyoming.
b. Twenty-four states and the District of Columbia are seeing the warning signs of a potential crisis.
c. Only six states are considered stable: California, Colorado, New Mexico, Louisiana, Wisconsin, and Indiana.44
d. As the result of reforms passed in 2002, including passage of a constitutional amendment and a strong cap on non- economic damages, Texas is now considered a state with effective reforms halting the crisis.
3. A Blue Cross/Blue Shield Association study concludes that the “medical malpractice insurance crisis is threatening healthcare affordability and access to care.” (88% of plans agree.)45
a. Blue Cross/Blue Shield recognizes the AMA designation of “crisis” states and acknowledges the impending problems of 30 other states.46
42 OFFICE OF THE ASSISTANT SEC’Y FOR PLANNING AND EVALUATION, U.S. DEP’T OF HEALTH AND HUMAN SERVS., SPECIAL UPDATE ON MED. LIABILITY CRISIS (2002) available at http://aspe.hhs.gov/daltcp/reports/mlupd1.htm (last visited Feb. 3, 2004). 43 See AM. MED. ASS’N, AM.’S MED. LIABILITY CRISIS: A NAT’L VIEW, available at http://www.ama- assn.org/ama1/pub/upload/mm/-1/med_liab_19stat.pdf (last visited June 10, 2005). 44 Id. 45 BLUECROSS BLUESHIELD ASS’N, supra note 10, at 2. 46 Id.
© 2005 American Medical Association. All rights reserved. 9 A-242
b. The Blue Cross/Blue Shield study validates the conclusion that reduced access to care is a result of the current medical liability crisis.
i. Fifty-six percent (56%) of Blue Cross/Blue Shield plans in crisis states respond that physicians are refusing some high risk procedures. (In non-crisis states only 32% of plans report this finding.)47
ii. Fifty-six percent (56%) of Blue Cross/Blue Shield plans in crisis states report that more physicians are leaving practice or retiring than in the past. (The response in non-crisis states is only 42%.)48
iii. Almost 1/3 of the Blue Cross/Blue Shield plans in crisis states report that physicians are moving practices out of state. (In non-crisis states, only 1/5 of plans report that physicians are moving out of state.)49
4. Selected Examples of Patients Losing Access to Care in the 20 Medical Liability Crisis States
View a map of crisis states at: http://www.ama- assn.org/ama/noindex/category/11871.html
(The following information is derived directly from the American Medical Association’s Medical Liability Crisis State Backgrounders, unless otherwise indicated.)
a. Arkansas i. Several physicians have discontinued their nursing home practice because of increased exposure and/or lack of insurance coverage for the nursing homes. Currently, there are no carriers writing new nursing home coverage. Those that have coverage have seen their premiums go up 1000% or more. Many nursing homes have been forced to “go bare: because of unaffordability or unavailability. (Arkansas Medical Society, March 2003) ii. A 13-physician group of obstetricians at Fayetteville’s FirstCare Family Doctors was forced to stop delivering babies after the group’s primary insurer left the state and affordable insurance was not available. “This situation has totally disrupted the way of life we love here,” said Sara McBee, MD. (Arkansas Business, January 13, 2003)
47 Id. at 9. 48 Id. 49 Id.
© 2005 American Medical Association. All rights reserved. 10 A-243 iii. More than 50 percent of physicians surveyed reported they’ve been forced to reduce or discontinue one or more medical services in the last two years due to rising liability insurance premiums. “Surgery and other procedures” was cited as the most common service cut, followed by emergency-room care, “treating patients at nursing homes,” on-call duty and obstetrics. (Information obtained from the Arkansas Medical Society, March 2003) iv. Medical liability reforms enacted in Arkansas in 2003 have come under fire with trial attorneys filing a lawsuit challenging the constitutionality of the new law.
b. Connecticut i. Experienced Ob-Gyn and teacher Dr. Benson Horowitz is so disgusted with the system that he fears giving advice to new obstetricians because that might implicate him in a future medical liability lawsuit. "It's almost like you've been a beneficiary of knowledge, but you can't be a benefactor," he said. (Associated Press, May 11, 2004) ii. Dr. Dickerman Hollister, an oncologist and former chief of staff at Greenwich Hospital, said fewer physicians means less access for patients. "It has reached a point where physicians cannot provide services and access to patients," he said. "What's going to happen is that people are going to lose the ability to see the physician of their choice." Hollister said female obstetricians and gynecologists are especially impacted. Many of those women work part time to mind their own children, he said, but since they must still pay full insurance premiums, they are forced to close their practices. "That's the canary in the coal mine," Hollister said. (Greenwich Time, April 24, 2004) iii. After two decades, Dr. Jeffery Lane has decided he can no longer afford to deliver babies and will refer as many as 30 current patients to other physicians when he drops Ob as of July 1, 2004, because of skyrocketing insurance premiums. "I really feel for my patients, who I've had to tell I won't be delivering them because they're due after my July first deadline." Dr. Lane said that it takes nearly forty deliveries to pay for his insurance, but since he only delivers seventy- five babies a year, he's had to use personal savings to pay the insurance premiums. (WFSB, CT, May 9, 2004)
© 2005 American Medical Association. All rights reserved. 11 A-244 c. Florida i. More than 1,600 doctors from across Florida gave sworn statements to a state Senate panel in August 2003 detailing how the state’s medical liability crisis forced them to change their practices, including no longer providing services such as delivering babies and performing complex surgeries. (Florida Medical Association) ii. Several neurosurgeons have left Palm Beach County and others have scaled back their practices because of concerns that emergency cases put them at higher risk for medical liability lawsuits. Only four neurosurgeons now handle emergency calls at the 13 hospitals in the county, increasingly leaving ERs with no one available, especially in the middle of the night and on weekends, health officials said. (Sun-Sentinel, March 13, 2004) iii. Patients from as far north as Palm Beach Gardens and as far west as Wellington routinely are being transported to hospitals in Broward and Miami-Dade counties, and sometimes to hospitals in central and northern Florida for emergency neurosurgical care, doctors and hospital officials said. Additional specialists cutting back emergency room coverage include hand surgeons, ophthalmologists and plastic surgeons. (Palm Beach Post, March 6, 2004) iv. At least seven Florida hospitals have closed their obstetrics units due to insurance concerns, and four other hospitals have reduced or limited obstetrics services. In addition, ten hospitals have eliminated, reduced or limited neurosurgical services. (Florida Hospital Association, January 2, 2003) v. More than half of 781 rural Florida doctors surveyed in late 2004 indicated that they had cut back on risky procedures. Childbirth was the procedure most likely to be reduced or stopped entirely; surgeries and emergency room procedures followed. (St. Petersburg Times, November 9, 2004)
d. Georgia i. Gainesville Ob-Gyn Linda Harrell, 49, learned in November that her insurance premiums had more than doubled in two years and she's now contemplating retirement. "How can you budget for increases like that?" Harrell asked. "I wanted to retire on my own terms. I didn't want to be run out." (The Atlanta Journal-Constitution, February 8, 2004) ii. General surgeon Bradley Carmen said that rising insurance costs are having a big impact in the medical profession, including at his hospital -- Marietta Memorial -- where he said four surgeons have moved
© 2005 American Medical Association. All rights reserved. 12 A-245 out of state in the last year because of medical liability insurance costs. "It's difficult to get insurance even if we haven't had lawsuits before. We've been non- renewed twice for no reason and had 100 percent cost increases for insurance in the last couple of years. We really sit on pins and needles." (Marietta Times, April 15, 2004) iii. The Athens Women's clinic, which has offered obstetrics services for 35 years, announced May 21 that the state's medical liability crisis was forcing it to no longer deliver babies. It will continue to offer gynecological services. (Athens Banner-Herald, May 21, 2004)
e. Illinois i. The last two brain surgeons in Southern Illinois are leaving because of medical liability insurance premiums of nearly $300,000 a year. Neurosurgeons B. Theo Mellion and Sumeer Lal of Neurological Associates of Southern Illinois turned in their resignations to Southern Illinois Healthcare, said Tom Firestone, chief executive officer of SIH, and will leave this summer. (UPI, February 25, 2004) ii. When three Ob-Gyns on staff at Advocate Lutheran General Hospital in Park Ridge learned their 2004 liability insurance premiums would climb from $345,000 to $510,470, they decided to take their practice to Kenosha, where during their first year their combined insurance will cost $50,018. "This state is like the Titanic," said one of the doctors. "A year ago, we saw the iceberg. Now we've already hit." (Chicago Tribune, March 12, 2004) iii. Dr. Susan Hagnell grew up in Chicago's Rogers Park neighborhood, attended medical school in Illinois and delivered well over 700 babies at hospitals in the northwest suburbs. But when her liability insurance bill soared from $71,848 to $118,742 last summer, Hagnell decided to jump the border. Now she delivers Wisconsin babies. "If I knew what was going to happen, I would never have become an obstetrician/gynecologist." (Chicago Tribune, March 12, 2004)
f. Kentucky i. In the past three years, Kentucky has lost 36 percent of its practicing neurosurgeons, 29 percent of its general surgeons and 25 percent of its obstetricians, according to the Kentucky Medical Association. (Associated Press, January 13, 2004)
© 2005 American Medical Association. All rights reserved. 13 A-246 ii. Pregnant women in eastern Kentucky will have a much more difficult time finding a doctor to deliver their babies since two hospitals that provided obstetrics -- Knox County in Barbourville and Our Lady of Bellefonte in Ashland -- have recently closed their doors, according to Dr. Joe Davis, an obstetrics and gynecological specialist in Bowling Green. "In the past few years, it's hit Kentucky significantly, especially in my specialty," said Dr. Davis. (Bowling Green Daily News, February 26, 2004; Kentucky Medical Association) iii. Kentucky's deteriorating practice environment continues to result in physicians leaving the state or retiring early. Between January 2000 and December 2002, the state has lost more than 1,200 physicians, nearly one-third to neighboring states and another one- third to early retirement. (Louisville Courier-Journal, November 11, 2003)
g. Massachusetts i. A 2004 Massachusetts Medical Society Workforce study found that high-risk specialists are limiting their scope of practice and altering how they practice, including practicing defensive medicine because of the fear of being sued. Among the high-risk specialists affected are: - 68 percent of emergency medicine specialists - 64 percent of neurosurgeons - 64 percent of Ob-Gyns (MMS 2004 Physician Workforce Study, April 2004) ii. Jane Confort, 52, is one of more than one dozen patients who had to be airlifted by helicopter to Boston from Saints Memorial Medical Center in Lowell since it had lost 24-hour neurosurgery coverage after two of six neurosurgeons in the region retired recently, and the facility's medical group had been unable to find replacements. Mrs. Confort was okay, and Dr. Gary DeLong, director of emergency room services at Saints Memorial in Lowell, said although he believes the shortage hasn't hurt the quality of patient care, ''it has affected orderly, convenient patient care.'' But, he said, ''when someone has an acute hemorrhage inside the brain, those patients need surgery quickly." (Boston Globe, April 28, 2004) iii. Some of Massachusetts' most experienced orthopedic surgeons say that it is growing more difficult to recruit new physicians. "I have been trying to recruit a partner for several years," said hand surgeon William Ericson, MD. "And no one wants to come to Massachusetts. My most hopeful prospect just
© 2005 American Medical Association. All rights reserved. 14 A-247 informed me that he is leaving the state." R. Scott Oliver, MD, also has had difficulty recruiting and said that "in the last year, I've interviewed five young doctors for positions in my group practice, and all have turned to other opportunities." (Massachusetts Medical Society, September 18, 2003) iv. A study of voters conducted in mid-2004 found that nearly 70% favored limiting awards for non-economic damages. (The Boston Herald, June 8, 2004)
h. Mississippi i. Rural obstetric care is in serious jeopardy. Cleveland has lost three of six Ob-Gyns, Greenwood has lost two of four, and Yazoo City-with 14,550 residents, has no one practicing obstetrics. (Associated Press, November 19, 2003) ii. Fifty-one of Mississippi's 82 counties face doctor shortages, according to a report by the Mississippi Health Policy Research Center. Starkville physician Steve Parvin, president-elect of the Mississippi State Medical Association, said a major reason for Mississippi's depleting work force of physicians is the high cost and scarcity of medical liability insurance. (Health & Medicine Week, December 29, 2003) iii. Pediatric specialist Kurt Kooyer, MD, left the small town of Rolling Fork after getting fed up with a legal system that allowed lawyers to file suit against him without the patients knowledge they were suing their physician. Dr. Kooyer, the only pediatrician among three physicians in town, arrived in 1994 and was responsible for the infant mortality decreasing from an average of 10 deaths per 1,000 live births to 3.4. Dr. Kooyer now lives in North Dakota. (Clarion Ledger, August 23, 2003) iv. Donald Palmisano, MD, Immediate Past-President of the AMA recently learned from a young surgeon that he “understood the crisis all too well because he recently lost his son because there was no neurosurgeon available.” Mississippi surgeon John Lucas, III, MD, related that his son was in a car accident and needed immediate neurosurgical intervention, but the area’s neurosurgeons had already either quit doing head trauma cases or had moved away. His son had a correctible problem if immediate attention by a neurosurgeon could be given. Dr. Lucas did everything he could to expedite the transfer and find a neurosurgeon. Unfortunately, the transfer came too late and his son John Lucas, IV died.
© 2005 American Medical Association. All rights reserved. 15 A-248 i. Missouri i. After obstetrician Jamie Ulbrich's liability insurance carrier stopped doing business in Missouri, the best coverage he and three colleagues at their Marshall clinic could find would have cost them double what they paid in 2003. The four doctors decided they couldn't each afford the $50,000 liability insurance premium, so they decided to stop providing obstetric service and instead work solely as family physicians in 2004. (The Associated Press, January 3, 2004) ii. Dr. Scot Pringle, a Cape Girardeau obstetrician, said he has delivered approximately 8,000 babies during his 23 years, and his premiums will likely exceed $85,000 if he continues to practice. "A lot of us have been practicing long enough we are near retirement," Dr. Pringle said. "Frankly, I don't want to put up with this mess anymore." (Southeast Missourian, April 26, 2004) iii. Dr. Donald Maples, a Kirksville family physician for 14 years, was forced to close his practice due to the high costs of medical liability insurance. "I am unbelievably saddened by this, this is not what I expected in my career, I expected to be here until I was in my mid-60s, but the reality is that I can no longer really truly afford to do this," said Maples, who will work as a full-time employee for Northeast Regional Medical Center. (KTVO, April 30, 2004)
j. North Carolina i. Dr. David Pagnanelli, a neurosurgeon, said he moved to Hendersonville, North Carolina in 2002 because liability costs were too high in Pennsylvania. But they shot up here too -- to nearly $190,000 a year -- even though there've been no successful claims against him, he said. Following his insurance carrier's advice, Pagnanelli stopped seeing trauma cases. But neurosurgeons are in short supply in Hendersonville, so his decision means patients with life-threatening head injuries have been shipped to other hospitals. (Charlotte Observer, February 11, 2004) ii. "If we remain in North Carolina we will likely be forced to make the decision to limit procedures which carry high risks (but also are often life-saving)," said K. Stuart Lee, M.D. of Eastern Neurosurgical and Spine Associates Inc. Dr. Lee's practice saw their medical liability premiums increase 116 percent last year. (The News and Observer, January 26, 2003) iii. Dr. Lew Stringer, the medical director for Forsyth County Emergency Medical Services for 30 years, resigned that position in 2003 because he could not
© 2005 American Medical Association. All rights reserved. 16 A-249 find liability insurance coverage. “It's sad after all these years of helping citizens to be forced to resign for lack of adequate coverage,” he said. “What other choice did I have?” (Winston-Salem Journal, June 3, 2003)
k. Nevada i. Mary Rasar's father died in Las Vegas after the only Level 1 trauma center was forced to close due to skyrocketing medical liability costs. Jim Lawson was injured July 4 in a traffic accident and rather than being rushed to the Level 1 trauma center at nearby University Medical Center, which had been forced to close, Lawson was taken to a hospital that did not have the resources necessary to save his life. He died while physicians tried to stabilize him for airlift to Salt Lake City. (PR Newswire, April 21, 2003) ii. Pregnant women continue to lose access to care as skyrocketing insurance premiums are forcing Ob-Gyns to stop delivering babies. Frieda Fleischer, MD, gave up obstetrics because her premiums rose from $30,000 annually to $80,000. "So far, I've had about 40 pregnant patients to refer elsewhere and it's been tough." Carolyn Faris, with the help of her former obstetrician, called more than 60 area doctors to find someone to deliver her baby. It wasn't until after experiencing pregnancy complications that Faris found a specialist to care for her. And Ruth Valentine, who was six months pregnant at the time, said she called more than 50 doctors and still could not find a local physician to deliver her baby, so she went to see an obstetrician in St. George, Utah. (Las Vegas Review- Journal, January 10, 2003) iii. "I left Nevada because the litigation climate had driven medical liability premiums to astronomical heights," Ob-Gyn Shelby Wilbourn, MD, testified before a Congressional subcommittee. Dr. Wilbourn, whose premiums increased to $108,000, moved to Maine this year and still receives calls from some of the 8,000 patients he saw during his 12 years in Nevada. "Liability isn't about fault or bad practice-it's about hitting a jackpot. Even the best Ob-Gyns have been sued, many more than once." (Associated Press, February 12, 2003)
l. New Jersey i. One out of every four hospitals-nearly 27 percent-has been forced to increase payments to find physicians willing to cover the emergency department. Physicians are increasingly reluctant to take on such
© 2005 American Medical Association. All rights reserved. 17 A-250 assignments because of the greater liability exposure. (New Jersey Hospital Association, January 28, 2003) ii. Numerous obstetricians and other physicians from several New Jersey counties have been forced to restrict their practices, consider early retirement or leave the state altogether, due to unaffordable premiums. Affected counties include: Atlantic, Bergen, Burlington, Camden, Cumberland, Essex, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren. (Medical Society of New Jersey Alliance) iii. Dr. Stephen Smith says that part of the reason costs are going up is the doctors are now forced to practice defensive medicine. "What bothers me so much is that element of -- of fear and doubt that is created by this system we're in. What we're doing now is we practice [cover your ass] medicine. His father, also a physician, is worried that the legal climate could cause a future shortage of high-risk specialists: "the best students are not going into high-risk fields, they're not going into OB, they're not going to neurosurgery." (60 Minutes, March 9, 2003)
m. New York i. Many young doctors won't specialize in obstetrics. They fear the threat of lawsuits and wince at liability insurance costs, which can be as much as $200,000 per year. Last summer, Manhattan's Elizabeth Seton Childbearing Center, which practiced natural childbirth, had to close when its medical liability insurance premiums rocketed to $2 million. (New York Daily News, February 12, 2004). ii. The Niagara Falls area now has only seven obstetricians, down from 13 in 1981 in a decline that far outpaces the area's population decrease. One of the remaining obstetricians, Dr. David Zornek, cites the liability premium and constant threat of economically- disastrous lawsuits as precipitating factors. "I could lose everything I've worked for," he worries. (Buffalo News, April 27, 2003) iii. Dr. John Cafaro, 45, an Ob-Gyn in Garden City, said some doctors are paying $130,000 for only $1 million worth of protection. "But we are getting sued for $85 and $90 million at a time," he said. "You do the math. Every time I walk into an operating room I put my family's life savings on the line." (New York Times, May 25, 2003)
n. Ohio i. "My wife and I are both physicians and just arrived in Wausau [Wisconsin] in March. We fled the crisis in
© 2005 American Medical Association. All rights reserved. 18 A-251 Ohio after spending our whole careers in that state," said Christopher J. Magiera, a gastroenterologist. Magiera and his wife, Pamela G. Galloway, a general surgeon, gave up their 15-year-old practice when their medical liability premiums were projected to reach $100,000 apiece. In Wisconsin, they pay a fraction of that. (Journal Sentinel, April 20, 2003) ii. Dr. Rebecca Glaser, a popular breast cancer specialist, will retire from surgery on April 1 because of high liability insurance premiums. "I think it's horrifying when we lose a physician who has literally a one-of-a- kind practice," said Donna Buchheit, one of Glaser's breast cancer patients. She continues, "It is literally a life and death issue. The legislature needs to understand that. It is not melodramatic to say that there will be women who die this year because of this. I certainly hope I won't become one of them." (Dayton Daily News, February 28, 2004) iii. Dr. Daniel Guyton, chief of surgery at Akron General Medical Center, said the anecdotal evidence is overwhelming on how many doctors are being forced out of business or out of state by the cost of insurance. ''It's getting to the point you can't recruit people [to Ohio]." (Akron Beacon Journal, March 14, 2004)
o. Oregon i. 43.4% of Oregon neurosurgeons, 27.1% of orthopedic surgeons, and 23.5% of Ob-Gyns reported they have already stopped providing certain services or would do so. Among all physicians, those in NW Oregon (9.7%), SW Oregon (10.6%) and E Oregon (13.2%) have stopped providing direct patient care or will do so. (Oregon Medical Association, April 2003) ii. Dr. Katherine Merrill delivered as many as 40 babies a year in Astoria, a job she loved. In August 2003, Merrill stopped delivering babies -- a decision prompted by the steeply rising costs of medical liability insurance. Merrill said something needs to be done to keep physicians from leaving the state or quitting high-risk specialties. "Otherwise there will be no doctors in your town to deliver babies or to do brain surgery when you've been in a car accident," she said. (The Associated Press, January 24, 2004) iii. Rural patients in Oregon are being particularly hard hit. Roseburg Women's Healthcare, which delivered 80% of the babies for the area, closed its doors in May 2002 because its liability insurance was canceled after a single, $8.5 million lawsuit. The closest other providers are 60-90 minutes away. "We consider this a medical crisis for the community," Mercy Medical
© 2005 American Medical Association. All rights reserved. 19 A-252 CEO Vic Fresolone told the Associated Press. (June 26, 2002)
p. Pennsylvania i. Young Ob-Gyn Dr. Christine Larson decided to move her family to Minnesota and start over because of Pennsylvania's worsening medical liability crisis. Dr. Daniel Kegel, president of OB-GYN of Lancaster -- Dr. Larson's former group -- said "most (young doctors) are going to make the same decision (to leave Pennsylvania)." Dr. Kegel emphasized that losing a young doctor "exacerbates the difficulty we have with a limited number of appointment slots and an increasing demand for them. It is difficult to accommodate everyone who wants and needs us." (Lancaster Sunday News, September 14, 2003) ii. More than two out of three medical residents in six medical specialties chose to leave Pennsylvania after completing their training, according to the Philadelphia Daily News, which examined data from the city's major teaching hospitals between 1998-2002. "The resident brain drain is greatest among doctors going into high-risk specialties: Ob-Gyns, orthopedic surgeons and neurosurgeons. These doctors, not surprisingly, are most likely to be sued for malpractice -- and pay some of the highest malpractice insurance premiums." (Philadelphia Daily News, May 28, 2003) iii. According to Grand View Hospital President Stuart Fine, the medical liability crisis is a main reason why patient access problems are occurring throughout the state and "has caused experienced doctors to leave the area, especially neurosurgeons, orthopedic and general surgeons, obstetricians and cardiologists. Few young doctors are coming in to take their place, and the result is a shortage of doctors." (Morning Call (Allentown, PA), January 23, 2004)
q. Rhode Island i. Dr. Kate Cassin, an ob-gyn stopped practicing obstetrics after her annual premium went from $28,000 in 2000 to $90,000 in 2004 -- even though she had never been sued. ( The Providence Journal , June 8, 2004) ii. ii. Minoj Garg, DO, stopped delivering babies in July 2004 at his Pawtucket practice due to the high costs of liability insurance associated with obstetrical care. He was the last family physician in private practice to deliver babies in Rhode Island. (Rhode Island Medical Society)
r. Washington
© 2005 American Medical Association. All rights reserved. 20 A-253 i. Delivering babies finally got too expensive for Mount Vernon doctor Bob Pringle. Like many physicians throughout Washington, he has abandoned obstetrics. "Patients who find themselves in high-risk pregnancies are going to have a problem," he said of the trend. Pringle, who recently cut his practice to part-time gynecology, said delivering babies would cost him $79,000 a year in liability insurance, nearly twice what it did a few years ago. (Seattle Post-Intelligencer, March 3, 2004) ii. When rural doctors decide to drop obstetrics insurance coverage and stop delivering babies because of liability insurance premiums -- as they have in Odessa, Republic and Davenport -- they're also prohibited by their insurance companies from offering prenatal care. That means more pregnant women who've never had a prenatal check-up are showing up at Spokane hospitals to deliver babies. "That is Third-World medicine," said Tom Corley, president of Holy Family Hospital. "That's what you'd expect in the middle of Africa." Other rural women are making long drives into Spokane for prenatal care. (The Spokesman-Review, March 2, 2004) iii. Facing escalating liability insurance rates, Valley Women's Healthcare, one of the larger obstetric and gynecology clinics in south King County, is reducing services. Swedish Physicians, which operates out of 11 clinics including Pine Lake and Factoria, has cut the number of family physicians delivering babies from 21 to 7. (King County Journal, January 25, 2004)
s. West Virginia i. A January 2003 American College of Obstetricians & Gynecologists survey found: - 80% of doctors responding knew that women were having trouble obtaining Ob-Gyn services; - 83% were aware that West Virginia hospitals were having trouble recruiting Ob-Gyns; and - 47% knew Ob-Gyns who changed their specialty or practice because of liability concerns. ii. Ashton Medical said it no longer will accept walk-in patients at the clinic in Ashton Place shopping center. Because the amount the doctors pay for medical liability insurance through the state Board of Risk and Insurance Management has increased significantly, they had to lay off five employees and cut hours. (Charleston Daily Mail, April 2, 2004) iii. A recent survey found that 94 percent of West Virginia doctors have changed the way they practice medicine because of litigation concerns. The survey also found that 97 percent of state doctors believe medical
© 2005 American Medical Association. All rights reserved. 21 A-254 liability lawsuits drive up the cost of patient care. (American Tort Reform Association, March 2004)
t. Wyoming i. Some Wyoming physicians are moving to Colorado or will soon do so. Colorado is a state with strong reforms and has a stable liability insurance market. Two examples: 1. Jim Derrisaw, MD, a Riverton anesthesiologist, moved his young family to Ft. Collins, Colorado to practice. Dr. Derrisaw grew up in Cheyenne, graduated from the University of Wyoming, married a native of Encampment, and returned to Wyoming to raise his family and "practice medicine in the state I love." Student loan debt for medical school of more than $100,000, coupled with insurance premiums that had escalated to $52,000 per year, created a burden that his deep Wyoming roots could not overcome. His insurance coverage in Colorado, a state with caps on non-economic damages and other key liability reform measures, has been quoted at a cost of $8,200. 2. Cheyenne urologist Stacy Childs, MD will end his practice in Wyoming on May 31, 2004, and move to Colorado, where his liability insurance premiums will be considerably less. Dr. Childs was an advocate for patients and physicians and served as Chairman of the WMS Liability Reform Task Force in 2003. He also served the people of the state during his tenure on the Wyoming Health Care Commission. (Wyoming Medical Society)
II. Solutions
A. Studies and Expert Opinions Confirm that Certain Types of Reform Lower Costs and Improve Access
1. A study by Kessler and McClellan concluded that within three years after the enactment of direct tort reforms, including caps on non-economic damages, premiums in states with direct reforms declined by 8.4%.50
50 Daniel P. Kessler & Mark B. McClellan, The Effects of Malpractice Pressure and Liability Reforms on Physicians’ Perceptions of Medical Care, 60 LAW & CONTEMP. PROBS., 81-106 (1997).
© 2005 American Medical Association. All rights reserved. 22 A-255 2. Another study by Stephen Zuckerman et al. looked at several types of reforms and concluded that capping medical liability awards reduced premiums for general surgeons by 13% in the year following enactment of that reform and by 34% over the long term. Premiums for general practitioners and Ob-Gyns were impacted similarly.51
3. In fact, not only do reforms lower physicians’ premiums, they also lower medical expenditures, in general. In a different study by Kessler and McClellan, those researchers found “that malpractice reforms that directly reduce provider liability pressure lead to reductions of 5 to 9 percent in medical expenditures without substantial effects on mortality or medical complications.”52
4. A study by the Agency for Healthcare Research and Quality (AHRQ) demonstrates a cap on non-economic damages helps protect patients’ access to care.
a. A July 3, 2003 study from the AHRQ53 looked at the distribution of physicians across states with and without caps on non-economic damages since 1970. After adjusting for multiple factors, AHRQ found that by 2000, states with damage caps averaged 12% more physicians per capita than states without damage caps. (emphasis added)
b. Additional key findings included: caps are effective in improving the supply of physicians and patients' access to care; and the lower the cap, the greater its effectiveness in ensuring patients' access to care.
5. A Joint Economic Committee study supports caps on non- economic damages.
a. In a study released in May 2003, the Joint Economic Committee of the U.S. Congress stated: “Some of the key reforms proposed at the federal level, including the cap on pain and suffering damages, have proven successful at producing savings when implemented.”54
b. The study points to California, which under MICRA has a $250,000 cap on non-economic damages, allows for binding arbitration agreements, collateral source offsets, limits on contingency fees, advance notice of liability claims, statute
51 Stephen Zuckerman, Randall R. Bovbjerg & Frank Sloan, Effects of Tort Reforms and Other Factors on Medical Malpractice Insurance Premiums, 27 INQUIRY 167-182 (1990). 52 DANIEL P. KESSLER & MARK B. MCCLELLAN, NAT’L BUR. OF ECON. ANALYSIS, DO DOCTORS PRACTICE DEFENSIVE MEDICINE?, 2 (1996), available at http://www.nber.org/papers/w5466.pdf .(last visited Feb. 3, 2004. 53 FRED HELLINGER & WILLIAM ENCINOSA, U.S. DEP’T OF HEALTH AND HUMAN SERVS., THE IMPACT OF STATE LAWS LIMITING MALPRACTICE AWARDS ON THE GEOGRAPHIC DISTRIBUTION OF PHYSICIANS (2003). 54 TH JOINT ECON. COMM., 108 CONG., LIABILITY FOR MED. MALPRACTICE: ISSUES & EVIDENCE 19 (2003).
© 2005 American Medical Association. All rights reserved. 23 A-256 of limitations, and periodic payment of damages. The Joint Economic Committee praises California as “perhaps the most successful example of reform at the state level,” noting its slower rate of growth in medical liability premiums (167% versus 505% in the rest of the country from the period 1976 to 2000).55
c. After observing the failure of our current system to achieve either of its central goals, i.e., to compensate those who are truly negligently injured and to deter negligent behavior, the study concludes: “This indictment of the tort system serves as the basis for medical liability reform…If adopted, the federal reform discussed here could yield budgetary savings of more than $19 billion per year, reduce the number of Americans without health coverage by up to 3.9 million, and lead to an environment that is significantly more receptive to efforts to improve patient safety and reduce medical errors.”56
B. State Efforts to Enact Caps on Non-Economic Damages
1. Twenty-five states have enacted a cap on non-economic damages, while six states have a cap on total damages. Colorado places a cap on total damages and non-economic damages.
a. States with a cap on non-economic damages – Alaska, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois (pending Governor’s approval), Kansas, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wisconsin.
b. States with a cap on total damages – Colorado, Indiana, Louisiana, Nebraska, New Mexico, and Virginia.
2. A cap’s effectiveness depends on the specific provisions of the legislation with which it was enacted.
For example, a state with a “hard” cap on non-economic damages should not be compared to a state with a “soft” cap on non-economic damages. A hard cap, like the $250,000 cap found in California’s MICRA is not subject to exceptions, does not adjust over time, and applies irrespective of the number of defendants or plaintiffs. By contrast, a “soft” cap may be subject to numerous exceptions; increase annually with inflation, other economic indicators, or based on a set
55 Id. Note: the updated figures through 2002, as calculated by the AMA according to NAIC data, are 245% and 750%, respectively. See NAT’L ASS’N OF INS. COMM’RS, PROFITABILITY BY LINE BY STATE BYLINE BY STATE IN 2002, 1976 and 2002 (National Association of Insurance Commissioners Insurance Products & Services Division 2003), at 116-7 (2003). 56 JOINT ECON. COMM., supra note 54, at 24.
© 2005 American Medical Association. All rights reserved. 24 A-257 schedule; or apply individually to every defendant or plaintiff, thereby allowing several caps for a single claim.
a. Examples of states with a soft cap
i. Florida – Florida has a separate cap on non-economic damages for practitioners ($500,000) and non- practitioners ($750,000). The cap, however, increases to $1 million for practitioners and $1.5 million for non-practitioners if the negligence results in death or a permanent vegetative state or if the court finds a manifest injustice would occur if the cap was not increased.
ii. Massachusetts – The $500,000 cap on non-economic damages in Massachusetts does not apply if the court finds the patient’s injury resulted in substantial disfigurement or permanent loss or impairment, or if the court determines that other special circumstances warrant a finding that such limitation would deprive the plaintiff of just compensation for the injuries sustained.
iii. Missouri –Missouri enacted a new law in 2005 which considerably strengthened their previous cap and established a hard $350,000 cap on non-economic damages (see paragraph 3.h. of this section for more information). Missouri’s previous cap had increased with inflation. Originally set at $350,000 in 1986, the cap reached $565,000 on February 1, 2004.57 In addition, the cap applied individually to each defendant and each plaintiff. The courts also considerably weakened the cap in a 2002 decision, Scott v. SSM Healthcare, in which the court held that the cap could be applied separately for each act of medical liability. Therefore, if there were two separate and distinct “occurrences” of liability that contributed to a single injury the court could apply a separate cap for each occurrence even against a single defendant. 58
b. Recognizing the ineffectiveness of a soft cap, several states, such as Alaska, Mississippi, and Missouri have recently enacted legislation to strengthen their cap. Likewise, Nevada voters adopted a ballot initiative in 2004 to replace a cap riddled with exceptions with a hard $350,000 cap on non-economic damages.
57 MO. REV. STAT. § 538.210 (2004). 58 Scott v. SSM Healthcare, 70 S.W.3d 560, 569, 571 (Mo. Ct. App. 2002), aff.d Cook v. Newman, No. WD62634 (Mo. Ct. App. July 27, 2004).
© 2005 American Medical Association. All rights reserved. 25 A-258
c. A cap on non-economic damages that is set too high will also not be as effective as a $250,000 hard cap like California. For example, prior to enacting legislation in 2003, West Virginia had a $1 million cap on non-economic damages. At this high level the cap was ineffective.
3. Recent State Legislation Enacting Caps on Non-Economic Damages (See next section, 4. Election 2004 Ballot Measures for supplemental information on Florida, Nevada, Oregon and Wyoming)
a. Alaska i. Signed into law by Governor Murkowski on June 7, 2005, S.B. 67 strengthens Alaska’s existing cap on non-economic damages by establishing a $250,000 cap on non-economic damages awarded in a personal injury cause of action, and a $400,000 cap on non- economic damages awarded in a cause of action involving wrongful death or a severe permanent physical impairment that is more than seventy percent disabling. A single cap applies regardless of the number of health care providers against whom the claim is asserted or the number of causes of action filed.
© 2005 American Medical Association. All rights reserved. 26 A-259 b. Florida i. After four special sessions, Florida’s legislature enacted S.B. 2-D, which was signed into law by Governor Jeb Bush on August, 14, 2003. In its final form, the bill does not provide the level of reforms advocated by Governor Bush’s task force or by the Florida Medical Association (FMA). In particular, the language on non-economic damages and exceptions to the cap added during late stages of negotiations are troublesome. In fact, this clause prohibited FMA from supporting the legislation in its final form.59 ii. S.B.2-D provides a separate cap on non-economic damages for practitioners and non-practitioners. For practitioners, the cap is $500,000 per claimant regardless of the number of defendants. For non- practitioners, the cap is $750,000 per claimant regardless of the number of defendants. The cap can increase to $1 million for practitioners and $1.5 million for non-practitioners if the negligence resulted in death or a permanent vegetative state, or if the court finds a manifest injustice would occur if the cap was not increased because the non-economic harm sustained by the patient was particularly severe and the defendant’s negligence caused a catastrophic injury to the patient.
c. Georgia i. On February 16, 2005, Governor Purdue signed into law S.B. 3. As enacted, S.B. 3 creates a Texas-style cap on non-economic damages. The new law establishes a hard $350,000 cap on non-economic damages awarded in a medical liability action, including wrongful death, against all health care providers and a separate $350,000 cap on non- economic damages awarded against a single medical facility that can increase to $700,000 if more than one facility is involved. No more than $1.05 million can be awarded in a medical liability cause of action. The caps apply to each claimant, however, the term “claimant” is defined in the law as including all persons claiming to have sustained damages as a result of the bodily injury or death of a single person.
d. Idaho i. On March 26, 2003, Governor Kempthorne signed into law H.B. 92 which includes a $250,000 cap on non- economic damages (Idaho previously had a $400,000 cap on non-economic damages which adjusted annually for inflation since 1988). The new cap also
59 FLA. STAT. ch. 766.118 (2004).
© 2005 American Medical Association. All rights reserved. 27 A-260 adjusts annually for inflation based on the average annual wage beginning July 1, 2004. The cap does not apply to causes of action arising out of willful or reckless misconduct, or felonious actions.60
e. Iowa i. Governor Vilsack vetoed H.F. 244061 on May 14, 2004, which would have provided a $250,000 cap on non-economic damages for awards against a health care provider in a medical liability cause of action.
f. Maryland i. Enacted in January 2005, Maryland’s H.B. 2 (2004) establishes a separate cap on non-economic damages for personal injury and wrongful death suits involving two or more claimants or beneficiaries. Non- economic damages awarded against a physician for personal injury, are capped at $650,000 until January 1, 2009, after which time the cap will increase $15,000 each year. The cap applies in aggregate to all claims and defendants arising from the same medical injury. (Cap also applies in wrongful death actions if the claim involves only one claimant or beneficiary). For wrongful death claims involving two or more claimants or beneficiaries, the total cap on non- economic damages is $812,500 (i.e., 125% of the current $650,000 non-economic damages cap in PI claims).
g. Mississippi On June 3, 2004, the Mississippi Legislature enacted H.B. 13 a civil justice reform bill that further strengthens Mississippi’s medical liability reform laws. Most importantly the bill creates a hard $500,000 cap on non-economic damages for medical liability causes of action filed against a health care provider. This provision significantly strengthens Mississippi’s existing cap, which was enacted into law in 2002, by deleting the exceptions to the cap and increases that were scheduled to occur in 2011 and 2017.62
h. Missouri i. On March 29, Governor Blunt signed into law H.B. 393, which among other medical liability reforms, includes language strengthening Missouri’s cap on non-economic damages. With passage of H.B. 393,
60 ID. REV. STAT. § 6-1603 (2004). 61 H.F. 2440, 80th Gen. Assem., Reg. Sess. (Ia. 2004) 62 H.B. 13, Miss. Gen. Assem. 1st Extraordinary Sess. (2004).
© 2005 American Medical Association. All rights reserved. 28 A-261 Missouri now has a hard $350,000 cap on non- economic damages. H.B. 393 deletes language in Missouri’s law that adjusted the cap annually and deletes the word “occurrence” from the law, thereby clarifying that multiple caps cannot apply to a single defendant (effectively overturning the Scott decision in which the Missouri Supreme Court interpreted the term “per occurrence” to apply to each individual act of negligence even if multiple caps could apply to a single defendant). H.B. 393 also specifies that a single $350,000 cap will apply irrespective of the number of defendants.
i. Nevada i. Cap on non-economic damages. As the result of passage of the Keep Our Doctors in Nevada initiative in 2004, Nevada has a $350,000 cap on non-economic damages in medical liability cases.63 ii. Cap on trauma care. In August 2002, Nevada enacted A.B. 1 which in part establishes a $50,000 cap on civil damages for claims arising from care necessitated by a traumatic event demanding immediate attention that is rendered in good faith to a patient who enters the hospital through the emergency room or trauma center. This limit does not apply to any act or omission in rendering care or assistance that occurs after the patient is stabilized (unless surgery is required within a reasonable time after the patient is stabilized) or that is unrelated to the original traumatic injury.
In cases where the physician or dentist provides follow-up care to the patient they treated in the above circumstances and the patient files a medical liability claim based on a medical condition that arises during follow-up care, a rebuttable presumption exists that the medical condition was the result of the original traumatic injury and the $50,000 limit applies.
This limit does not apply in cases amounting to gross negligence or reckless, willful or wanton conduct.64
j. Ohio i. On January 10, 2003, Ohio Governor Taft signed into law S.B. 281, a medical liability reform bill to address the growing crisis in Ohio. Among other provisions, the bill establishes a sliding cap on non-economic damages. The cap shall not exceed the greater of $250,000 or three times the plaintiff’s economic loss
63 NEV. REV. STAT. § 41A.031 (2004). 64 Id. at § 41.503.
© 2005 American Medical Association. All rights reserved. 29 A-262 up to a maximum of $350,000 for each plaintiff or $500,000 per occurrence. The maximum cap will increase to $500,000 per plaintiff or $1,000,000 per occurrence for a claim based on either (A) a permanent and substantial physical deformity, loss of use of a limb, or loss of a bodily organ system, or (B) a permanent physical functional injury that permanently prevents the injured person from being able to independently care for oneself and perform life sustaining activities.65
k. Oklahoma i. On May 28, 2004, Governor Brad Henry signed into law a civil justice reform bill (H.B. 2661). The bill maintains the existing cap on non-economic damages for obstetrics and emergency room care, which was enacted in 2003, and establishes a $300,000 cap on non-economic damages for all other medical liability causes of action. The cap applies only if the defendant has made an offer of judgment and the amount of the verdict awarded to the plaintiff is 1 ½ times the amount of the final offer of judgment. The cap applies to each medical injury regardless of the number of actions brought and adjusts annually based on any increases in the Consumer Price Index. The cap does not apply if the jury finds by a preponderance of the evidence that the defendant’s conduct was willful or wanton or by clear and convincing evidence that the defendant committed negligence. Before these questions can be presented to the jury, the judge must first determine there is enough evidence to establish these findings. The cap does not apply in cases involving wrongful death as this is prohibited by Oklahoma’s Constitution.66 ii. On June 4, 2003, Oklahoma’s Governor Henry signed into law S.B. 629. Among other provisions, S.B. 629 includes a $300,000 cap on non-economic damages for cases involving pregnancy, labor and delivery, or care provided immediately post-partum. The cap also applies in cases involving emergency-room care or medical services provided as a follow up to such care. The bill allows a judge to lift the cap if the judge makes a finding that there is clear and convincing evidence of negligence. The cap applies regardless of the number of parties against whom the medical negligence action is brought. The $300,000 damage
65 OHIO REV. CODE § 2323.43 (2004). 66 H.B. 2661, 49th Oklahoma Legislature, 2nd Reg. Sess. (2004).
© 2005 American Medical Association. All rights reserved. 30 A-263 limit does not apply in wrongful death cases. The cap provision is scheduled to sunset in 5 years.67
l. Pennsylvania i. In December 2003, Pennsylvania’s legislature enacted H.B. 44, which establishes the Health Care Provider Retention Program. H.B. 44 provides physicians a full or partial abatement of their MCARE assessments for 2003 and 2004. A health care provider can receive a full abatement of the assessment if he/she meets one of the following criteria: is assessed as a member of one of the four highest rate classes of the prevailing primary premium, is an emergency physician, routinely provides obstetrical services in a rural area, or is a certified nurse midwife. All other health care providers who qualify under the act will receive a 50% abatement of their assessment. As a condition of accepting the abatement, providers must agree to practice in the state for at least one full year following the year for which the abatement was received.68 The State of Pennsylvania has extended the abatement one year, to include 2005 MCARE assessments. (Act 154 of 2004).
m. South Carolina i. Signed into law by Governor Sanford on April 4, 2005, S.B. 83 establishes a $350,000 cap on non- economic damages in a medical liability action against a single health care provider or single health care institution. If the award is against more than one health care provider or more than one institution, the total award for non-economic damages cannot exceed $1.05 million, with each defendant not liable for more than $350,000. The cap applies separately to each claimant and adjusts annually based on an increase or decrease in the Consumer Price Index.
n. Texas i. On June 11, 2003, Governor Perry signed H.B. 4 into law. H.B. 4 contains sweeping tort reforms, many of which exclusively address medical liability litigation against physicians. Of these reforms, perhaps the most important is the hard cap of $250,000 on non- economic damages per claimant in any judgment against a physician or health care provider, regardless of any applicable theories of vicarious liability, the number of defendants involved, or the number of
67 OK CODE §63-1-1708.1F (2004). 68 PA H.B. 44 (2004) (enacted).
© 2005 American Medical Association. All rights reserved. 31 A-264 causes of action asserted as part of the claimant's case against the physician. H.B. 4 also places a hard cap of $250,000 on non-economic damages per claimant in any judgment against a health care institution in a medical liability cause of action. A judgment against two health care institutions shall not exceed $500,000 in non-economic damages with each institution not liable for more than $250,000 in non-economic damages.69 All persons claiming to have sustained damages as a result of the bodily injury or death of a single person are considered a single claimant. ii. The new law states the cap on non-economic damages applies per "claimant." This terminology may create some confusion about the scope of the cap. Fortunately, however, the new law defines "claimant" as "a person, including a decedent's estate, seeking or who has sought recovery of damages in a health care liability claim. All persons claiming to have sustained damages as a result of the bodily injury or death of a single person are considered a single claimant." Therefore, all persons claiming to have sustained damages as a result of injury or death sustained by a single person are considered a single claimant. The new law also states the cap applies regardless of the number of defendants or causes of action asserted.
Therefore, the maximum amount a claimant (including all persons that claim damages as a result of injury or death of a single person) can recover in non-economic damages, even if multiple physician defendants are involved and the claimant asserts multiple causes of action, is $250,000. There is also a separate cap for health care institutions whereby a claimant can recover up to an additional $250,000 for one institution and up to $500,000 if more than one institution is involved. Again this cap applies regardless of the number of causes of action asserted, or persons who claim to have damages from the injury or death of a single person. iii. The caps provision states as follows: "(a) In an action on a health care liability claim where final judgment is rendered against a physician or health care provider other than a health care institution, the limit of civil liability for noneconomic damages of the physician or health care provider other than a health care institution, inclusive of all persons and entities for which vicarious liability theories may apply, shall be limited to an amount not to exceed $250,000 for each claimant, regardless of the number of defendant
69 TEX. CIV. PRAC. & REM. § 74.301(2004).
© 2005 American Medical Association. All rights reserved. 32 A-265 physicians or health care providers other than a health care institution against whom the claim is asserted or the number of separate causes of action on which the claim is based. (b) in an action on a health care liability claim where final judgment is rendered against a single health care institution, the limit of civil liability for noneconomic damages inclusive of all persons and entities for which vicarious liability theories may apply, shall be limited to an amount not to exceed $250,000 for each claimant. (c) In an action on a health care liability claim where final judgment is rendered against more than one health care institution, the limit of civil liability for noneconomic damages for each health care institution is, inclusive of all persons and entities for which vicarious liability theories may apply, shall be limited to an amount not to exceed $250,000 for each claimant and the limit of civil liability for noneconomic damages for all health care institutions, inclusive of all persons and entities for which vicarious liability theories may apply, shall be limited to an amount not to exceed $500,000 for each claimant." iv. On September 13, 2003, the people of Texas approved Proposition 12, a ballot initiative to amend the state constitution to specifically allow the legislature to enact laws that place limits on non-economic damages in medical and health liability cases. 70 This vote validates the legislature's work in enacting H.B. 4. The final vote was 51.12% in favor of Proposition 12 and 48.88% against.
Since passage of Proposition 12 and HB 4, Texas Medical Liability Trust, the largest medical liability carrier in the state, cut premiums by 17%.71 The total rate reduction represents $34 million in savings to physicians and patients in Texas. Since then the next four largest insurers in the Texas medical liability market have also reduced premiums providing Texans with an additional $16 million in relief.72
70 A tribute to the effectiveness of Proposition 12 came soon after its passing when personal injury trial attorney and member of the Oklahoma legislature Stratton Taylor sent a letter to his ATLA colleagues in Texas to offer the services of his firm to any Texas attorney wishing to forum-shop and file suit in Oklahoma—where there are still no caps. Editorial, Oklahoma!, THE WALL ST. J., Dec. 19, 2003. 71 Terry Maxon, No cure-all, THE DALLAS MORNING NEWS, Sept. 26, 2004; Malpractice claims drop a year after reforms, THE ASSOC. PRESS ST. & LOCAL WIRE, Oct. 6, 2004; Joseph T. Hallinan & Rachel Zimmerman, Malpractice Insurer Sees Little Savings in Award Caps, THE WALL ST. J., Oct. 28, 2004. 72 Texas Alliance for Patient Access.
© 2005 American Medical Association. All rights reserved. 33 A-266 o. West Virginia i. Cap on non-economic damages. On March 11, 2003, West Virginia’s Governor Bob Wise signed into law H.B. 2122. As enacted, the bill contains a number of reforms including a $250,000 cap on non-economic damages applied per occurrence regardless of the number of defendants or plaintiffs. The cap increases to $500,000 per occurrence for cases involving a permanent and substantial physical deformity, loss of use of a limb or loss of a bodily organ system, or permanent physical or mental functional injury that permanently prevents the injured person from being able to independently care for himself or herself and perform life sustaining activities. The cap will be adjusted annually for inflation up to $375,000 per occurrence or $750,000 for injuries that fall within the exception.73 ii. Cap on trauma care. The bill also includes a $500,000 cap on civil damages for any injury to or death of a patient as a result of health care services rendered in good faith and necessitated by an emergency condition for which the patient enters a health care facility designated as a trauma center. This limit also applies in the following circumstances: (1) to health care services rendered by a licensed EMS agency or employee of a licensed EMS agency. (2) any act or omission of a health care provider in rendering continued care or assistance in the event that surgery is required as a result of the patient’s emergency condition.
This limit does not apply if the care is rendered in willful and wanton or reckless disregard of a risk of harm to the patient or in clear violation of established written protocols for triage and emergency health care procedures developed by the office of emergency medical services. Likewise, the limit does not apply to any act or omission in rendering care that occurs after the patient has been stabilized and is considered a non- emergency patient, or care that is unrelated to the original emergency condition.
If the physician who provided care to the patient when the patient was presented with an emergency condition provides follow-up care to the same patient and a medical condition arises during the course of this follow-up care that is directly related to the original emergency condition, there is a rebuttable presumption that the medical condition was the result of the original
73 W. VA. CODE § 55-7B-8 (2004).
© 2005 American Medical Association. All rights reserved. 34 A-267 emergency condition, and, therefore, the cap applies. There is also a rebuttable presumption that a medical condition that arises in the course of follow-up care provided by a health care provider in the trauma center is directly related to the original emergency condition, where the follow-up care is provided within a reasonable time after the patient’s admission to the trauma center.74
p. Wyoming During a special session in 2004, Wyoming’s legislature enacted a number of meaningful medical liability reforms, including a bill to amend the constitution to allow the legislature to place a cap on non-economic damages in medical liability cases. The issue went before the voters in November, 2004, and Wyoming voters approved one amendment allowing the legislature to pass laws creating medical screening panels or other alternative dispute resolution systems in medical liability cases.
4. Election 2004 Ballot Measures
a. Four states, Florida, Nevada, Oregon, and Wyoming had ballot initiatives related to medical liability reform that went before voters on November 2. The following is a summary of these initiatives and what voters decided.
i. Florida 1. Voters approved a constitutional Amendment 3, stating that an injured claimant who enters into a contingency fee agreement with an attorney for a medical liability claim is entitled to no less than 70% of the first $250,000 and 90% of any damage award over $250,000. Voters also approved two amendments sponsored by trial attorneys. One of these amendments, Amendment 7, gives the public access to any records made or received by a health care provider or facility related to an adverse medical incident. The other amendment, Amendment 8, denies licensure to a physician who has been “found to have committed” three or more incidents of medical liability. The language “found to have committed” means a finding of a physician’s medical liability by either: (1) a final judgment of a court; (2) a final
74 Id. at § 55-7B-9C (2004).
© 2005 American Medical Association. All rights reserved. 35 A-268 administrative agency decision; or (3) a decision resulting from binding arbitration. “Found to have committed” does not, therefore, include settlements of medical liability claims. Nor does it include a report to a medical liability insurance carrier that a claim has, or will be, filed.
Amendment 3 is self-executing, which means that it is intended to be effective without subsequent legislative activity. Amendments 7 and 8 will most likely require supplementary legislative activity and clarification before they can be implemented.
ii. Nevada 1. Voters approved the “Keep our Doctors in Nevada” initiative (Question 3) which amends Nevada’s current medical liability reform statute to include MICRA-style reforms. The approved initiative amends Nevada’s existing medical liability reform statute by: (1) deleting the current exceptions to Nevada’s $350,000 cap on non-economic damages in medical liability cases; (2) strengthening the existing joint and several liability reform law by applying it to both economic and non-economic damages; (3) requiring periodic payment of future damages over $50,000 at the request of either party; (4) placing limits on attorney contingency fees; and (5) strengthening Nevada’s existing statute of limitations.
Voters also defeated two ballot initiatives (Questions 4 and 5) sponsored by trial lawyers. Question 4 called for auto, homeowners, and medical liability insurers to roll back their rates to the amount charged on December 1, 2005, and reduce them an additional 20 percent. Question 5 focused on frivolous lawsuits. If approved, both measures would have invalidated any medical liability reforms enacted by the legislature or voters, including Question 3.
iii. Oregon Voters defeated Measure 35, which would have amended the state constitution to establish a $500,000 cap on non-economic
© 2005 American Medical Association. All rights reserved. 36 A-269 damages in medical liability cases. This $500,000 cap was passed by the legislature in 1987 and later overturned by the Oregon Supreme Court in 1999.
iv. Wyoming In Wyoming, voters approved one constitutional amendment, and defeated another. The approved amendment, Amendment C, allows the legislature to pass laws creating medical screening panels or other alternative dispute resolution systems in medical liability cases. The defeated amendment, Amendment D, would have allowed the legislature to enact a cap on non-economic damages in medical liability cases. Wyoming is currently one of four states where the state constitution explicitly prohibits the legislature from enacting limits on damages.
Both amendments were passed by the legislature during a special session in July 2004. For a constitutional amendment to pass in Wyoming, it requires a simple majority of votes cast in the general election. But voters who do not cast a vote either way for an amendment are counted as “no” votes. This means an amendment sometimes will fail even if it receives over half the votes cast on that ballot question.
5. Judicial Activity
a. The courts in the following states upheld legislation for caps on non-economic damages: Alaska, California, Colorado, Idaho, Kansas, Maryland, Michigan, Minnesota, Missouri, Nebraska, Virginia, West Virginia and Wisconsin. (Of them, Missouri, North Carolina, and West Virginia are considered crisis states.)75
75 See Evans v. State, 56 P.3d 1046 (Alaska 2002); Hoffman v. U.S., 767 F.2d 1431 (9th Cir. 1985); Fein v. Permanente, 695 P.2d 665 (Ca. 1985); Scholz v. Metro. Pathologists P.C., 851 P.2d 901 (Colo. 1993); Kirkland v. Blaine County Med. Ctr., 4 P.3d 1115 (Idaho 2002); Samsel v. Wheeler Transp. Serv., Inc. 246 Kan. 336 (Kan. 1990); Murphy v. Edmunds, 601 A.2d 102 (Md. 1992); Zdrojewski v. Murphy, 657 N.W.2d 721 (Mich. Ct. App. 2002); Adams v. Children’s Mercy Hosp., 848 S.W.2d 535 (Mo. Ct. App. 1993); Linder v. Smith, 629 P.2d 1187 (Mont. 1981); Prendergast v. Nelson, 256 N.W.2d 657 (Neb. 1977); Gourley ex. rel. Gourley v. Neb. Methodist Health Sys., 633 N.W.2d 43 (Neb. 2003); Etheridge, et. al. v. Med. Ctr. Hosp., 367 S.E.2d 525 (Va. 1989); Robinson v. Charleston Area Med. Ctr., 186 W.Va. 720 (W. Va. 1991); Verba v. Ghaphery, 552 S.E.2d (W. Va. 2001); Guzman v. St. Francis Hosp., 623 N.W.2d 776 (Wis. Ct. App. 2000).
© 2005 American Medical Association. All rights reserved. 37 A-270 b. Courts in Indiana, Louisiana and New Mexico upheld caps that encompass both economic and non-economic damages.76 Louisiana's cap, akin to New Mexico’s, does not include medical expenses, which are paid as incurred.77
c. Courts in the following states struck down caps on non- economic damages: Alabama, Illinois, Kansas, New Hampshire, North Dakota, Ohio, Oregon, South Dakota, Washington78
d. In Florida and Texas, caps were upheld, but with some restrictions.79
e. On June 29, 2004, in Indiana, an Indiana appeals court ruled that the statute of limitations applicable to a minor's medical liability cause of action was unconstitutional. The case arose from alleged medical liability committed during a minor plaintiff's birth, which ultimately resulted in the minor suffering serious and permanent physical and mental injuries. At the time the child was born, Indiana law stated that the minor had until she was 20 years old to file a medical liability action for the alleged negligence. The legislature subsequently changed the statute of limitations. Under the change, the minor was required to file her medical liability action by her eight birthday. Unaware of the change in the law, the child commenced suit before his 20th birthday. The trial court ruled that the minor's medical liability claim was barred by the new limitation's period. The appeals court reversed, holding that the change requiring the child's lawsuit to be filed no later than her eight birthday violated Indiana's Constitution. The court based its decision on a finding that the classification between minors injured by medical liability and minor victims of other torts was no longer reasonably related to the goal of maintaining sufficient medical treatment and controlling medical liability insurance costs. This case has not been appealed.
f. In Wisconsin, on July 2, the state Supreme Court ruled that Wisconsin's cap on noneconomic damages in medical liability wrongful death cases was constitutional. The case arose when a five-year old girl was taken to a hospital
76 Johnson v. St. Vincent Hosp., 404 N.E.2d 585 (Ind. 1980); Butler v. Flint Goodrich Hosp., 607 So.2d 517 (La. 1992), Fed. Express Corp. v. U.S., 228 F. Supp. 2d 1267 (N.M. 2002). 77 LA. REV. STAT. § 40:1299.42(B)(1) (2003). 78 See Moore v. Mobile Infirmary Ass’n, 592 So.2d 156 (Ala. 1991); Best v. Taylor Mach. Works, 689 N.E.2d 1057 (Ill. 1997); Kan. Malpractice Victims Coalition v. Bell, 757 P.2d 251 (Kan. 1988) (new law enacted in 1988); Carson v. Mauer, 424 A.2d 825 (N.H. 1980); Arneson v. Olson, 270 N.W.2d (N.D. 1978); State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 715 N.E. 2d 1062 (Oh. 1999); Lakin v. Senco Products, Inc., 987 P.2d 463 (Or. 1999); Sofie v. Fibreboard Corp., 771 P.2d 711 (Wash. 1989). 79 See Univ. of Miami v. Echarte, 618 So.2d 189 (Fla. 1993); Lucas v. U.S., 757 S.W.2d 687 (Tex. 1988); Rose v. Doctors Hosp., 801 S.W.2d 841 (Tex. 1990).
© 2005 American Medical Association. All rights reserved. 38 A-271 emergency room and the attending physician did not diagnose her acute diabetes. The child died a couple of days later. At trial, the Court ruled that Wisconsin's cap on noneconomic damages was unconstitutional and the child's estate was awarded $550,000 in non-economic damages. The Court also ruled that both the child's estate and the child's parents were entitled to noneconomic damages up to the respective limits for medical liability and wrongful death claims, thereby permitting an award of $2,500,000 to the child's parents in non-economic damages as part of the parents' wrongful death claim. On Appeal, the Wisconsin Supreme Court reversed, ruling that: (1) only one cap, ($500,000), applied in medical liability wrongful death cases, regardless of the number of claimants; and (2) that cap was constitutional.
g. In West Virginia, the West Virginia Supreme Court is currently considering a constitutional challenge to a $250,000 cap on noneconomic damages in medical liability cases and other medical liability reforms passed by the West Virginia Legislature in 2002 as part of HB 2122. HB 2122 not only put the cap in place, but HB 2122 also applies the cap retroactively, so that the $250,000 limitation covers medical liability cases filed before HB 2122's enactment.
6. Favorable State Case Law Establishes Rationale for Supporting Legislative Reforms - Failed Legal Challenges Brought Against Caps on Non-Economic Damages80
a. Equal Protection Clause
i. Under the “deferential rational relationship” test, a number of courts have upheld damages caps as a permissive and rational means of achieving the legitimate state goal of reducing insurance premiums paid by physicians.
ii. Other societal goals supporting the implementation of caps that have been upheld by the court include; (i) ensuring the availability of physicians in the state, (ii) the continued existence of state compensation funds, (iii) the continued existence of insurance for physicians in the state, and (iv) assurance of medical related payments to all claimants.
iii. Courts have held it constitutional for damage caps to differentiate between medical liability tort claimants who have suffered injuries valued at a level below the damages cap, and those who have suffered damages
80 See cases cited supra, note 76.
© 2005 American Medical Association. All rights reserved. 39 A-272 valued above the damages cap amount based upon the legitimate purpose of the legislature.
b. Due Process Clause
Court analysis of due process challenges also has proceeded under the rational relationship test, where damages caps have been found to be neither arbitrary nor irrational legislative goals.
c. Right to Trial by Jury
i. After a plaintiff is awarded damages up to the amount of the statutory cap, the determination of damages is removed from consideration by the jury and given to the court. This is not a denial of the right to trial by jury, since the jury already has completed its fact- finding mission, determining that the plaintiff is owed compensation. Deciding how much a patient will recover is a question of law for the court. The court implements the policy decision of the legislature.
ii. Reviewing courts also have held that it is within the legislature’s power to modify common law and statutory rights and remedies, as was done with the caps.
d. Open Court Challenge
The courts have struck down the argument that a damage cap impermissibly allows the legislature to intrude on the judicial process. Instead of being an impermissible barrier to the courts, the cap is merely a limit on recoveries.
e. Intrusion on the Rulemaking Power of the Judicial Branch
The courts did not find that caps allow the legislature to overstep its constitutional powers. Instead, the courts found that the legislature has full purview over questions of policy, as opposed to procedural questions. Damage caps are questions of policy, properly within the legislature’s scope of power.
7. California’s Solution: MICRA
a. California enacted the Medical Injury Compensation Reform Act of 1975 (MICRA) which largely eliminates the lottery aspect of medical liability litigation in that state.81
b. Now, in California, claims are settled in one-third less time than in states without caps on non-economic damages.82 This
81 CAL. CIV. CODE § 3333.2 (2004).
© 2005 American Medical Association. All rights reserved. 40 A-273 not only decreases the cost of litigation, it also means injured patients are indemnified much faster in California.
c. California’s experience with MICRA shows that tort reform works. MICRA has been held up as “the gold standard” of tort reform, and a model for repeated attempts at Federal reform legislation.
d. A recent study by the RAND Corporation showed that MICRA was successful at decreasing insurer payouts and redistributing money from trial lawyers to injured patients. MICRA’s contingency fee reform and limit on non- economic damages caused plaintiff attorney fees to be reduced 60%, while net recoveries to patients and their families were only reduced 15%.83
e. According to Phil Hinderberger of Norcal Mutual, before MICRA was passed, “California physicians paid almost 25% of all medical liability premiums paid in the [U.S.] at a time when they represented only about 10% of all practicing physicians in the [U.S.]. Today, California physicians pay about [10]% of all medical liability premiums paid in the [U.S.] which represents a fair share.”84
f. According to the National Association of Insurance Commissioners, while total premiums in the rest of the U.S. have risen 750% between 1976 and 2002, the increase in California premiums was only 245% over the same time period.85
g. Since 1975, The Doctors Company has lowered its medical liability premium rates in California by 40% in constant dollars.86
h. According to HHS, “the percentage of claims resolved through settlement and arbitration has increased in California, saving money for injured patients.”87 “Premiums for specialists in Los Angeles are substantially less than for specialists in metropolitan areas in states without reforms
82 Harming Patient Access to Care: The Impact of Excessive Litigation: Hearing Before the Subcomm. on Health of the Comm. on Energy and Commerce, 107th Cong. 88 (2002) [hereinafter Anderson statement] (statement of Richard E. Anderson, Chairman of the Doctors’ Co. for the Physician Ins. Ass’n of Am.). 83 NICHOLAS M. PACE, ET AL., RAND CORP., CAPPING NON-ECONOMIC AWARDS IN MEDICAL MALPRACTICE TRIALS xxiv (2004). 84 Posting of Phil Hinderberger, [email protected], to [email protected] (Jan. 20, 2003) (copy on file with author). 85 See e.g., NAT’L ASS’N OF INS. COMM’RS, supra note 55. Statistics presented in MLR – Now! have been derived from this and previous versions of the report dating back to 1975. 86 Anderson statement, supra note 83. 87 INSURANCE CYCLE, supra note 20, at 4.
© 2005 American Medical Association. All rights reserved. 41 A-274 such as Florida, Illinois, and Nevada.”88 For example, an Ob-Gyn in Los Angeles can expect to pay approximately $60,000 per year for liability insurance whereas the same Ob-Gyn would pay nearly $250,000 in South Florida, and $140,000 in Chicago or Las Vegas.89 C. Federal Legislation
1. Although some states are attempting to address the medical liability crisis at the state level, a federal solution also is needed. Many state liability reform laws have been nullified by activist state courts or stripped of their most effective provisions under state constitutions that limit reform.
2. The existing crisis is not confined within state lines. Many patients are losing access to their physicians, forcing them to travel to neighboring states for their critical health care services.
3. All patients pay the escalating costs generated by our nation's dysfunctional medical liability system. These costs are especially high for the federal government, given that one-third of the total health care spending in our country is paid by the Medicare and Medicaid Programs.
4. Activities in the U.S. House of Representatives (108th Congress)
a. On February 5, 2003, Representative James C. Greenwood (R-PA), introduced H.R. 5, the HEALTH Act (Help Efficient, Accessible, Low-cost, Timely Healthcare Act of 2003), which is modeled after the successful MICRA statute.
b. H.R. 5 includes provisions that would –
i. Ensure that patients receive 100% compensation for their economic losses (including past and future medical expenses, rehabilitation costs, child care costs, loss of past and future earnings, and other quantifiable costs) if harmed by a physician’s negligence;
ii. Place reasonable limits on non-economic damages of up to $250,000 and allow states the flexibility to establish or maintain their own laws on damages, whether higher or lower;
iii. Establish a sliding-scale for attorney’s fees, thereby maximizing the recovery of the award for patients; and
88 Id. 89 Med. Liability Monitor, 28 (2003).
© 2005 American Medical Association. All rights reserved. 42 A-275 iv. Establish periodic payments of future damages and a “fair share” rule that allocates damage awards fairly and in proportion to fault.
c. On March 13, 2003, the House of Representatives passed H.R. 5, the HEALTH Act, by a vote of 229-196. The vote was largely along party lines: 213 Republicans and 16 Democrats supported the bill; 9 Republicans, 186 Democrats and 1 Independent opposed the bill; 1 Republican voted “present”; and 8 members did not vote.
d. H.R. 5 would safeguard patients' access to care by enacting common sense reforms that provide a $250,000 cap on non- economic damages, thus reasonably limiting damages without preempting existing state law.
e. The Supremacy Clause, principles of preemption, and the language of H.R. 5 would protect states with existing caps and provide a federal standard for a non-economic cap, even if such caps are barred by a state constitution.
f. A 2003 Congressional Budget Office (CBO) study on H.R. 5 (108th Congress) indicates that certain tort limitations, primarily caps on awards and rules governing offsets from collateral-source benefits, effectively reduce average premiums for medical liability insurance. Consequently, CBO estimates that, in states that currently do not have controls on medical liability torts, H.R. 5 would significantly lower premiums for medical liability insurance from what they would otherwise be under current law.90
g. As part of its “Careers for the 21st Century America” initiative, the House Republican Leadership held another vote on medical liability reform on May 12, 2004. The legislation, H.R. 4280 (the HEALTH Act of 2004), was virtually identical to H.R. 5 and contained only minor technical changes. The AMA strongly supported H.R. 4280, and it passed the House by a vote of 229-197.
5. Activities in the U.S. Senate (108th Congress)
a. On June 26, 2003, Senator John Ensign (R-NV), Senate Majority Leader Bill Frist (R-TN), and Senate Majority Whip Mitch McConnell (R-KY) introduced S. 11, the “Patients First Act of 2003.” Similar to H.R. 5, as introduced in the U.S. House of Representatives, S. 11 also
90 CONG. BUDGET OFFICE, H. R. 5 HELP EFFICIENT, ACCESSIBLE, LOW-COST, TIMELY HEALTHCARE (HEALTH) ACT OF 2003 (2003), available at http://www.cbo.gov/showdoc.cfm?index=4091&sequence=0 (last visited Feb. 10, 2004).
© 2005 American Medical Association. All rights reserved. 43 A-276 included a provision to reform expert witness requirements. Like H.R. 5, the AMA strongly supported this bill.
b. Despite the strong backing by the Senate Republican Leadership, on July 9, 2003, S. 11 failed to acquire the sixty votes needed to overcome a Democratic filibuster, thereby preventing the Senate from proceeding to a full debate. Forty-nine Senators voted in favor of breaking the filibuster, while forty-eight voted against – despite support from President Bush, the House of Representatives, and 72% of the American public.
c. Shortly after the July 2003 vote, the Senate Republican Leadership again expressed its strong commitment to federal medical liability reform by announcing their intent to bring numerous medical liability reform bills to the floor of the Senate throughout 2004.
d. On February 24, 2004, the Senate had a procedural vote on S. 2061, the “Healthy Mothers and Healthy Babies Access to Care Act of 2003,” which was introduced by Senate HELP Committee Chairman Judd Gregg (R-NH) and Senator John Ensign (R-NV). If enacted, the legislation would have applied certain MICRA-type reforms to physicians who provide obstetrical and gynecological services related to childbirth. The AMA expressed concerns that language in S. 2061 relating to collateral source/subrogation and ERISA scope of preemption (as included in previously introduced legislation, S. 607) could disadvantage patients and physicians. However, the AMA urged a “yes” vote on the procedural vote as a step to advance Senate legislation on medical liability reform. S. 2061 failed to acquire the sixty votes needed to overcome a Democratic filibuster. Forty- eight Senators voted in favor of breaking the filibuster, while forty-five Senators voted against.
© 2005 American Medical Association. All rights reserved. 44 A-277 e. On April 7, 2004, the Senate again attempted to advance medical liability reform legislation. This time, the Senate had a procedural vote on S. 2207, the “Pregnancy and Trauma Care Access Protection Act of 2004.” If enacted, S. 2207 would apply certain MICRA-like reforms to physicians who provide trauma/emergency services and services related to childbirth. Like S. 2061, this legislation was introduced by Senators Gregg and Ensign and contained the same language regarding collateral source/subrogation and ERISA scope of preemption. The AMA again expressed concerns, but urged a “yes” vote on the procedural motion. S. 2207 failed to acquire the sixty votes needed to overcome a Democratic filibuster. Forty-nine Senators voted in favor of breaking the filibuster, while forty-eight Senators voted against.
f. The AMA remains strongly committed to enacting federal legislation in the 109th Congress that will provide comprehensive medical liability reform for all physicians.
6. Public Support for Federal Legislation
a. The American public continues to support medical liability reform.
b. Seventy-six percent (76%) of those surveyed in a Wirthlin Worldwide poll favor a law that would guarantee an injured patient full payment for lost wages and medical costs and place reasonable limits on awards for “pain and suffering” in medical liability cases.91 A recent Gallup poll confirms this public opinion. The poll results, released February 4, 2003, show that 72% of Americans support limiting the amount patients can be awarded for “pain and suffering.”
c. A March 2004 HCLA poll also concluded that Americans overall (72%) favor a law that guarantees full payment of lost wages and medical expenses but reasonably limits the amount that can be awarded for ‘pain and suffering’ in medical liability cases.92
III. Responding to Other Arguments
A. Public Citizen and Other Anti-Tort Reform Groups’ Concerns
1. Claim: Physicians are victims of insurance companies that made bad business decisions and are now trying to make up their losses.
91 WIRTHLIN WORLDWIDE, AMERICAN’S BELIEVE ACCESS TO HEALTH CARE THREATENED BY MED. LIABILITY CRISIS (2003), available at http://www.hcla.org (last visited Feb. 12, 2004). 92 Health Coalition on Liability and Access, supra note 11.
© 2005 American Medical Association. All rights reserved. 45 A-278 Fact: A recent report of the U.S. General Accounting Office (GAO 03- 702) shed light on the cause of recent escalation in medical PLI premiums. No matter how opponents attempt to spin the report’s conclusions, the basic findings are these: a) “ Increased losses on claims are the primary contributor to higher medical malpractice premium rates.”; b) “…None of the (insurance) companies experienced a net loss on investments.”; and c) “…Insurers are not charging and profiting from excessively high premium rates.”93
2. Claim: Insurance companies raise rates when they are seeking ways to make up for declining interest rates and market-based investment losses.94
Fact: Annual Statement data summarized in Best’s Aggregates & Averages, Property-Casualty, 2004 edition, showed that the Investment Yields of medical liability insurers have been stable and positive since 1999. Those returns have ranged from 3.8% to 5.4%, and include income from interest, dividends, and real estate income. The facts simply do not justify placing blame on the insurance industry for an out-of-control legal system. 95
According to the Ohio Department of Insurance, the vast majority of invested assets are fixed-income instruments such as treasury, municipal, and corporate bonds whose losses have been minimal.96
The Ohio Department of Insurance also refutes this misconception by stating that there is no provision in its regulations that allows insurance companies to increase their rates in order to recoup past costs resulting from pricing mistakes, larger than expected claims, adverse court decisions, or other unexpected costs.97
Brown Brothers Harriman & Co. (BBH) completed a study ("Did Investments Affect Medical Malpractice Premiums?") that analyzed the impact of insurers’ asset allocation and investment income on the premiums they charge. BBH concluded that there is no correlation between the premiums charged by the medical liability insurance industry, on the one hand, and the industry's investment yield, the performance of the U.S. economy, or interest rates, on the other hand.98
93 U.S. GEN. ACCOUNTING OFFICE, MED. MALPRACTICE INS.: MULTIPLE FACTORS HAVE CONTRIBUTED TO INCREASED PREMIUM RATES 15, 25, 32 (2003), available at http://www.gao.gov/new.items/d03702.pdf (last visited Feb. 3, 2004). 94 See e.g., AMERICANS FOR INS. REFORM, MED. MALPRACTICE INS.: STABLE LOSSES/UNSTABLE RATES 7 (2002), available at http://www.insurance-reform.org/StableLosses.pdf (last visited Feb. 12, 2004). 95 AM BEST, BEST’S AGGREGATES & AVERAGES - PROPERTY/CASUALTY, QUANTITATIVE ANALYSIS REPORT, MED. MALPRACTICE PREDOMINATING: 2004 ed. (2004), 126. 96 Holly Saelens of OH Dep’t of Ins., Remarks entitled “Med. Malpractice Ins.”, at 19. 97 Id. at 18. 98 Raghu Ramachandran, Did Investments Affect Medical Malpractice Premiums?, Jan. 21, 2003, available at http://salsa.bbh.com/news/Articles/MedMal.html (last visited Feb. 3, 2004).
© 2005 American Medical Association. All rights reserved. 46 A-279
In addition, BBH conducted a follow-up study that analyzed National Association of Insurance Commissioners (NAIC) data to answer the question: "Did medical malpractice companies raise premiums because they had come to expect a certain percentage gain that was not achieved due to market conditions?" BBH determined that the decline in equities (which are a small percentage of insurance company investments) was more than offset by the capital gains by bonds (which make up a substantial part of insurance company investments) due to a decline in interest rates. BBH concluded that "investments did not precipitate the current crisis."99
3. Claim: The crisis is nothing more than the natural “insurance cycle.”
Fact: It is not the underwriting cycle that drives the problem, but the growing size of jury awards. The U.S. Department of Health and Human Services argues that if the insurance cycle were the cause of the current crisis, “then all states would be equally experiencing a crisis.”100 Insurers are not leaving other lines of insurance markets. They are leaving the medical liability insurance market because of the risk of unbounded payouts in that sector, particularly in non-reform states.101 As a case in point, “St. Paul Companies, which was the largest medical liability carrier in the U.S. (covering 9% of physicians), announced in December of 2001 that it would no longer offer coverage to any doctor in the country.”102
4. Claim: The crisis is due to lack of insurance regulation by the states.
Fact: The American Association of Health Plans (AAHP) finds that “all state insurance departments and other state governmental agencies heavily regulate and monitor the solvency of medical malpractice carriers…and require extensive reporting.”103 These regulators place strict limits on the types and riskiness of investments insurers can purchase. Also, the insurers are required to report annually on the status of their investments. The fact remains that in states without medical liability reforms, insurers are choosing to no longer write policies or to leave the state altogether. A state’s level of insurance regulation does nothing to regulate the main driver of increasing medical liability premiums – increasing severity of jury awards and settlements. 104
99 Raghu Ramachandran, A Note on Investment Income of Medical Malpractice Companies, Feb. 4, 2003, available at http://salsa.bbh.com/news/Articles/medmal2.html (last visited Feb. 3, 2004). 100 INSURANCE CYCLE, supra note 20, at 1. 101 Id. at 3. 102 Id. 103 AM. ASS’N OF HEALTH PLANS, “LAWSUIT LOTTERY” CAUSES MED. MALPRACTICE CRISIS—SUGGESTIONS THAT POOR INVESTMENTS LED TO CRISIS DON’T PASS SMELL TEST 1, available at http://www.americanbenefitscouncil.org/documents/refutingstockmarketargument.pdf (last visited Feb. 12, 2004). 104 Id.
© 2005 American Medical Association. All rights reserved. 47 A-280 5. Claim: The crisis is a result of bad insurer investment practices, including putting too much money in the stock market.
Fact: The AAHP also reasoned that if the stock market were to blame, the crisis would resonate across the country to all medical liability insurers. This is not the case, as evidenced by the fact that it is mostly physicians that practice in states without meaningful medical liability reform who are significantly affected.105 Furthermore, as noted elsewhere in this document, insurers do not heavily invest in the stock market. Rather, insurers’ investments are mostly in bonds and other positive-yield markets.106
B. Proposition 103 Myth: “Proposition 103, not MICRA, is responsible for lowering medical liability premiums in California.”
(The information in this section is derived in part from the American Medical Association’s Proposition 103 Myth document).
1. Fact: Proposition 103 is not responsible for keeping California’s medical liability premiums down. Rather, MICRA has been the force behind California’s success.
a. In 1975, California’s legislature enacted MICRA, the “Medical Injury Compensation Reform Act”―thirteen years before the passage of Proposition 103 in 1988.
b. MICRA reformed the state’s medical liability system and included a $250,000 cap on non-economic damages. A recent report by the U.S. General Accounting Office (GAO) and other studies have shown that states with caps on non- economic damages have experienced slower premium growth than states with more limited reforms.
c. MICRA has been the driving force that has kept premiums one-half to one-third below premiums in states without caps on non-economic damages and similar reforms.
d. According to National Association of Insurance Commissioners data, California’s medical liability premiums have increased 245% between 1975, when MICRA was enacted, and 2002, while the rest of the nation’s premiums have increased 750%.
2. Fact: Proposition 103 does not cover all entities that offer insurance.
105 Id. 106 See e.g., Health Care Litigation Reform: Does Limitless Litigation Restrict Access to Health Care?: Hearing Before the Subcomm. on Commercial and Admin. Law of the Comm. on the Judiciary, 107th Cong. 64 (2002) (statement of Lawrence E. Smarr, Pres. of Physician Ins. Ass’n of Am.) citing to Tillinghast - Towers Perrin, Medical Malpractice - Market Review and Update, (Mar. 2002), AM BEST, supra note 96.
© 2005 American Medical Association. All rights reserved. 48 A-281
a. Only about one-half of medical providers in California are insured by entities that are subject to Proposition 103.
b. The remaining half of medical providers are covered by a combination of risk retention groups and self-insured institutions, both public and private, that are not subject to Proposition 103.
3. Fact: Proposition 103 did not have any substantial effect on liability premiums.
At the time of Proposition 103’s passage in 1988, MICRA had been declared constitutional, and liability premiums in California already had begun to stabilize due to insurers’ confidence that the courts were beginning to uniformly apply MICRA.
4. Fact: Proposition 103 does not prohibit increases in premiums, it only requires that the increases are justified and are not “excessive, inadequate, or unfairly discriminatory.”
a. Under Proposition 103, the California Department of Insurance must grant a hearing for a challenge to any increase above 15 percent for commercial lines of insurance.
b. Since passage of Proposition 103, few public hearings have been held challenging rate increases for medical liability insurers. The bottom line is that medical liability insurers writing policies for California physicians do not need to increase rates dramatically because the market is under control.
C. Myths Raised by Opponents of Medical Liability Reform in Relation to H.R. 5, the “HEALTH Act,” introduced in the 108th Congress
(The information in this section is derived in part from the American Medical Association’s H.R. 5 Myth document).
1. Myth: Capping non-economic damages prevents patients from adequately recovering for their injuries.
Fact: The HEALTH Act does not limit the amount a patient can receive for economic injuries. An injured patient can recover all of her medical costs, lost wages, future lost wages, rehabilitation costs, and any other economic out–of-pocket loss suffered as a result of a health injury.
2. Myth: Caps on non-economic damages will not address the problem of affordability and availability of coverage.
Fact: The HEALTH Act is modeled after California’s 1975 Medical Injury Compensation Reform Act, which has enabled health care professionals to
© 2005 American Medical Association. All rights reserved. 49 A-282 focus on providing high-quality care. Research has demonstrated that direct medical care litigation reforms—like the HEALTH Act which includes limitations on non-economic damage awards—reduce medical liability claims rates and insurance premiums. California now has some of the lowest liability premiums in the country.
3. Myth: Adjusting the statute of limitations means patients will not have enough time to seek redress.
Fact: The HEALTH Act limits the number of years a plaintiff has to file a health care liability action, ensuring that claims are brought before evidence is destroyed, while witnesses are available and memories are fresh. It guarantees that health care lawsuits will be filed no later than 3 years after the date of injury. In some circumstances, however, it is important to guarantee patients additional time to file a claim. Accordingly, the Act extends the statute of limitations for minors injured before age 6.
4. Myth: MICRA-style reforms, including a $250,000 hard cap on non-economic damages unfairly target children, who would not be able to collect any economic damages.
Fact: Children in California, a state which has had the benefits of MICRA since 1975, have been able to receive multi-million dollar verdicts and settlements precisely because economic damages include measurement of future wages. If an injury prevents a child from pursuing a livelihood, the wages and benefits of unrealized work can be calculated.
In states without MICRA-style reforms, physicians are growing more reluctant to perform complex procedures, such as pediatric neurosurgery, for fear of being sued. This has resulted in children being forced to travel long distances for care—putting their lives at potential risk.
5. Myth: MICRA-style reforms, including a $250,000 hard cap on non-economic damages, unfairly target non-working spouses— especially women—who would not be able to collect any economic damages.
Fact: States without proven reforms are losing physicians willing to read mammograms—putting women at increased risk for delaying detection of preventable breast cancers. Furthermore, women in underserved and rural areas will be particularly hard hit by any further loss of obstetric providers. With the economic viability of practicing obstetrics already marginal due to sparse population and low insurance reimbursement for pregnancy services, an increase in medical liability insurance costs will force many rural physicians to stop delivering babies, providing prenatal care and preventive care services.
In California, MICRA has enabled the critical "safety net" of community clinics to maintain services for California’s rapidly growing uninsured and
© 2005 American Medical Association. All rights reserved. 50 A-283 underinsured population. Should the current cap be raised, serious public health consequences for women are inevitable.
MICRA-style reforms also enable non-working spouses to collect money for child care costs or any other economic cost needed to provide care if an injury has taken place. In addition, juries often set a “salary” for non- working spouses for purposes of determining economic damages.
6. Myth: MICRA-style reforms, including a $250,000 hard cap on non-economic damages, unfairly target the elderly, who would not be able to collect any economic damages.
Fact: MICRA-style reforms would enable the elderly to collect any/all money needed to continue providing care. Without reforms, the elderly will likely see their access to care diminish when they can least afford it.
MICRA-style reforms preserve the elderly’s access to specialists, such as orthopedic surgeons. In states without proven reforms, reports of physicians who say they no longer provide home-health care visits to the elderly are increasing. These visits are stopping due to rising liability insurance premiums and other factors, and it forces the elderly to potentially delay receiving preventive care, as well as incurring increased costs and difficulty associated with travel.
7. Myth: It is unfair to restrict attorneys’ fees. Contingency fees are a built-in incentive which encourage plaintiffs’ attorneys to take only meritorious cases.
Fact: The HEALTH Act empowers courts to maximize patients' awards by ensuring that an unjust portion of the patient’s recovery is not misdirected to her attorney. Trial lawyers that link their payment to awards have an inherent incentive to generate as much litigation as possible and drag out proceedings as long as possible. Legislation like this will help expedite medical liability claims and discourage baseless lawsuits by limiting the incentive to pursue meritless claims. Without this limitation, attorneys could continue to routinely pocket large percentages of an injured patient’s award, leaving patients without the money they need for their medical care.
8. Myth: Plaintiffs are required to prove an impossibly heightened standard of clear and convincing evidence for punitive damages.
Fact: The HEALTH Act places reasonable guidelines on punitive damages to make the punishment fit the offense. It appropriately raises the burden of proof for the award of quasi-criminal penalties to clear and convincing evidence to show either malicious intent to injure or deliberate failure to act to avoid injury. The bill does not cap punitive damages. Rather, it delineates a guideline, allowing for punitive damages to be as much as $250,000 or two times the amount of economic damages awarded, whichever is greater.
© 2005 American Medical Association. All rights reserved. 51 A-284 9. Myth: Periodic payments of all future damages punish meritorious plaintiffs.
Fact: The HEALTH Act allows the money for future medical expenses to be paid periodically rather than in one lump sum. The bill does not reduce the amount a patient will receive. In fact, it protects the delivery of future health care because past and current expenses will continue to be paid at the time of judgment or settlement while future damages can be funded over time. This ensures that a plaintiff will receive all of the damages to which she is entitled in a timely fashion without risking the bankruptcy of the defendant.
10. Myth: It is the insurance companies’ fault that liability insurance rates have skyrocketed. Insurers lost a lot of money in the stock market – and now they are making it up in premiums.
Fact: Insurance companies are required by law to make very conservative investments. They typically place about 80% of their investments in the bond market – not the stock market. In addition, insurers can not raise premiums to recover past losses. Medical liability premiums are strictly tied to estimates of future paid losses.
11. Myth: Insurance reform in California – specifically Proposition 103 – stabilized medical liability premiums in California, not MICRA.
Fact: The truth is, Proposition 103 had little or nothing to do with medical liability insurance. Since 1975, California’s medical liability reforms have been responsible for protecting California’s patients and keeping the insurance market stable. Proposition 103 does not prohibit insurers from raising rates. It merely states that if an insurer wants to raise rates by more than 15%, there must be public hearings.
12. Myth: Repealing McCarran-Ferguson — the federal law which provides a limited federal antitrust exemption for the business of insurance, subject to state regulation and oversight — would be more effective in lowering medical liability premiums.
Fact: The McCarran-Ferguson Act is the federal law authorizing state regulation of insurance. State regulators are required by law to reject rates that are excessive, inadequate or unfairly discriminatory. The exemption does not insulate insurers from the enforcement of state or federal antitrust laws in the context of anti-competitive business practices such as boycott, coercion or other intimidation in the marketplace. Repealing McCarran- Ferguson would do absolutely nothing to change the underlying reason for the rise in medical liability premiums – namely the explosion of meritless litigation and skyrocketing jury awards.
D. Additional Myths
© 2005 American Medical Association. All rights reserved. 52 A-285 1. Myth: Tort reforms unfairly penalize patients and are ineffective in holding down premiums for physicians and hospitals.107
Fact: Awards of non-economic damages that are out of scale with equity or need are not fair to anyone, given that economic damages are unlimited. Thus, legislators must consider the needs of the greater public welfare to ensure access to care for all. Tort reforms reduce unfair penalties to patients by improving the fairness of awards and ensuring that more of it goes to patients than lawyers. Consider that the U.S. tort system returns less than fifty cents on the dollar to compensate injured parties.108
Tort reforms hold down premiums. Compare California’s premiums with those of the other large states. For example, 2003 manual rates for general surgeons in Los Angeles ranged from $26,600 to $58,830 while rates in Miami ranged from $108,473 to $226,542.109
Furthermore, Prof. Kenneth E. Thorpe of Emory University concluded that, “[t]he empirical results indicate that the caps on awards adopted by several states were associated with lower loss ratios and lower premiums. … Loss ratios in states capping awards were 11.7 % lower than in states without caps….Premiums in states with a cap on awards were 17.1% lower than in states without such caps.”110 He concluded, “Stopgap reforms (caps on rewards) of our current liability system would ultimately result in lower premiums (relative to their levels without the caps).”111
2. Myth: Rather than tort reform, more efforts should be directed at removing incompetent physicians and improving quality of care.
Fact: Removing “incompetent” physicians based on how many times they have been sued or have been found liable for negligence would be an extreme and ineffective method of trying to resolve the crisis because of the randomness of the litigation system. The vast majority of claims— almost 70 percent—have no merit.
Also, according to HHS, researchers have found that most errors are system failures, rather than failures of individual physicians. That is to say, most errors occur even though physicians perform their jobs correctly.
107 See e.g., ASS’N OF TRIAL LAWYERS OF AM., MED. MALPRACTICE FIBS & FACTS, available at http://www.atla.org/ConsumerMediaResources/Tier3/press_room/FACTS/medmal/medmalfibsfacts.aspx (last visited Feb. 12, 2004). 108 TILLINGHAST-TOWERS PERRIN, supra note 24 at 1-2. 109 Med. Liability Monitor, supra note 90, at 28. 110 See, CONG. BUDGET OFFICE, LIMITING TORT LIABILITY FOR MED. MALPRACTICE, (2004) (Reporting that, “[o]n average, premiums for all physicians nationwide rose by 15 percent between 2000 and 2002” (Id. at 1)), available at ftp://ftp.cbo.gov/49xx/doc4968/01-08-MedicalMalpractice.pdf (last visited Feb. 3, 2004). 111 Kenneth E. Thorpe, The Medical Malpractice ‘Crisis’: Recent Trends and the Impact of State Tort Reforms, HEALTH AFFAIRS, Jan. 21, 2004, at 28, available at http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.20v1.pdf (last visited Feb. 3, 2004).
© 2005 American Medical Association. All rights reserved. 53 A-286 According to Brennan et al., since medical liability payments correlate with disability and not negligence112 a better approach to reducing errors and improving patient safety would be to create a confidential, voluntary reporting system in which physicians and other health care providers could report information on errors to entities to be known as Patient Safety Organizations (PSOs). The AMA supports efforts that would establish the statutory framework to create a “culture of safety” whereby information on health care errors could be reported in a confidential and legally protected manner. Such an approach was recommended by the Institute of Medicine in their seminal report, “To Err is Human.” A federal statute that allows confidential reporting of errors along with analysis and an expedited systems of correction including dissemination of de-identified information, is a model that works for the Aviation Safety Reporting System and should be replicated for health care.
In the 108th Congress, the AMA supported bipartisan efforts in the House and Senate to advance legislation (H.R. 663/S. 720) that would establish the statutory framework to create a “culture of safety” whereby information on health care errors could be reported in a confidential and legally protected manner.
3. Myth: Tort reform will only benefit insurance companies and physicians.
Fact: Tort reform, including placing a reasonable cap on unquantifiable non-economic damages, would lower insurance premiums as well as costs borne by the entire health care system. If physicians’ liability exposure is reduced, they are less likely to practice defensive medicine or limit the procedures they perform. The true beneficiaries of tort reform will be tax payers and patients who need access to critical medical care.113
4. Myth: Insurers can somehow remain financially viable without increasing revenue, or, in other words, raising rates.
Fact: Insurance is not magic. Large underwriting losses are not sustainable over the long term, and will merely result in less competition as insurers exit the market. Over the past decade, the profitability of medical liability insurers has been on the decline and was lower than that of other property casualty insurers. Underwriting profitability is measured by the combined ratio after policyholders’ dividends. A ratio less than 100 indicates that an insurer is earning an underwriting profit. The lower the ratio, the higher the profit rate. Between 1996 and 2003 the combined ratio of medical liability insurers increased from 106.6 to 136.9. This means that for every $1 insurers received in premiums in 2003 they paid out
112 Troyen A. Brennan, Colin M. Sox & Helen R. Burstin, Relation between Negligent Adverse Events and the Outcomes of Medical-Malpractice Litigation, 335 N. ENG. J. MED. 1963 (1996). 113 BLUE CROSS BLUE SHIELD ASS’N, supra note 10, at 2.
© 2005 American Medical Association. All rights reserved. 54 A-287 $1.37. The 2003 combined ratio of all property casualty insurers was 100.1.114
E. GAO Reports
1. A report released July 28, 2003, by the U.S. General Accounting Office confirmed that medical liability premiums have skyrocketed in some states and specialties -- and increased losses on claims are the primary contributor. The report also put to rest two main opponent smokescreens: that insurance company gouging and/or stock market losses have caused the medical liability crisis. This report made clear that bonds make up 80 percent of insurers’ investments and that ‘no medical malpractice insurers experienced a net loss on their investment portfolios.’ The GAO report also stated that insurer ‘profits are not increasing, indicating that insurers are not charging and profiting from excessively high premium rates.’ It also noted that insurance regulators in most states have the authority to deny excessive premium rates. 115
2. While verifying that the liability crisis has affected access to health care services, the GAO made several determinations in its August 2003116 report that the AMA believes do not accurately reflect the severity of the current crisis in real time. Numerous changes to the GAO methodology would strengthen the basic findings of this report. Among the data sources, measures, or analytical methods that could be improved are the following:
a. Appropriate measurement of physician mobility. The number of physicians actively practicing in a state cannot be measured by the number of licenses issued by a state medical board. The Federation of State Medical Boards explain that 60 percent of physicians have a license in more than one state. Furthermore, a physician may maintain his or her license in a former state of residence, but not practice there. Or for instance, an Ob-Gyn may maintain a license to practice both gynecology and obstetrics in more than one state, but may just see gynecological patients and not deliver babies in either state. Retired physicians also may choose to maintain their licenses though they no longer practice. These facts are not reflected in state licensure data. Actual physician practice location information must be used instead.
b. More accurate counts of physicians by specialties and local markets. Physician/population ratios that aggregate
114 AM Best, Best’s Aggregates & Averages - Property/Casualty, United States and Canada: 2004 ed. (2004), 346, 352. 115 U.S. GEN. ACCOUNTING OFFICE, MED. MALPRACTICE INS.: MULTIPLE FACTORS HAVE CONTRIBUTED TO INCREASED PREMIUM RATES supra note 94, at 15. 116 U.S. GEN. ACCOUNTING OFFICE, MED. MALPRACTICE: IMPLICATIONS OF RISING PREMIUMS ON ACCESS TO HEALTH CARE (2003), available at http://www.gao.gov/new.items/d03836.pdf (last visited Feb. 3, 2004).
© 2005 American Medical Association. All rights reserved. 55 A-288 physicians across local markets and specialties obscure the significant market-specific or specialty-specific changes in the supply of physicians and availability of critically important medical services.
c. Use of multi-payor data to accurately measure access to health care services that Medicare data alone do not capture. Utilization statistics based exclusively on data from a single payor (Medicare) exclude data for obstetric and emergency care, and fail to capture the impairment of access among other vulnerable populations, such as Medicaid patients.
d. Use of current source of data to capture the magnitude of the access problem in real time. The GAO accorded no weight to current sources of data which reflect the magnitude of impairment of patient access today.117
F. Health Affairs article118
1. Background: The authors acknowledge that while their research is focused on Pennsylvania physicians, they also state: “[our findings] do provide a lens into the environment in states in severe malpractice crisis—a point at which several states have already arrived, and toward which many others appear to be headed.119 The AMA believes the authors’ findings would be largely similar if the scope of the research were expanded to the other 19 states in a full-blown medical liability crisis.
2. The survey concluded:
a. Among physicians in high-risk PA counties, 81 percent agreed that “because of concerns about malpractice liability, I view every patient as a potential malpractice lawsuit.”
b. 62 percent said that “the malpractice system limits doctors’ ability to provide the highest quality medical care a great deal.”120
c. The authors make the suggestion that “the malpractice crisis in Pennsylvania is decreasing specialist physicians’ satisfaction with medical practice in ways that may affect the quality of care. They also accurately note that while
117 HEALTH SERVICES RESEARCH INST., PENN. MED. SOC’Y, PENNSYLVANIA’S MED. LIABILITY CRISIS & MED. MARKETPLACE ISSUES (2003)(Concluding that the GAO’s misleading and inadequate evidentiary survey contributed to the report’s failure to identify an ongoing and worsening access problem). 118 David Studdert, Michelle Mello, et al., Caring for Patients In A Malpractice Crisis: Physician Satisfaction And Quality of Care, 23 HEALTH AFFAIRS 42, 42-53 (July/Aug. 2004). 119 Id. at 43. 120 Id. at 48.
© 2005 American Medical Association. All rights reserved. 56 A-289 “Pennsylvania is among the three or four states hit hardest by rising liability costs . . . all indicators point toward a deepening of the malpractice crisis in other states.”121
d. The authors are right to be concerned with the increasing dissatisfaction among the physician community. Physicians, like all individuals, adapt to their situation and those adaptations are not always positive. For example, if a person with a degenerative hip does not seek treatment, the person may compensate and wind up hurting his or her knee. For Pennsylvania health care, the adaptations include more physicians giving up high-risk procedures and more patients losing access to care.
e. The authors found that while 70 percent of specialists surveyed would be very or somewhat likely to recommend their specialty to a recent medical school graduate, only 15 percent would recommend practicing in Pennsylvania, thus confirming the lasting impact of this crisis on the future of medicine in Pennsylvania.
IV. Patient Safety Efforts (108th Congress)
A. Quality of care declines when patients are denied access to physicians.
B. A culture of safety requires a legal environment that encourages professionals and organizations to work together to identify problems in providing care, evaluate the causes, and use that information to improve care for all patients.
C. A recent New England Journal of Medicine report declares that, “… in spite of the mission of malpractice law to improve the quality of care through deterrence—indeed, perhaps because of it—the fear of litigation obstructs progress in ensuring patient safety.”122
D. The current litigation system does not encourage a culture of safety because it:
1. Encourages defensive medicine.
2. Creates a lottery mentality throughout the nation’s court system.
3. Enriches certain trial lawyers at the expense of patients and physicians.
E. The Harvard Medical Practice Study used New York State hospital and medical professional liability claim data to estimate the incidence of
121 Id. at 51-2. 122 David Studdert, Michelle Mello & Troyen Brennan, Medical Malpractice, 350 NEW ENG. J. MED., 283, 287 (2004).
© 2005 American Medical Association. All rights reserved. 57 A-290 adverse events among hospitalized patients and to characterize the relationship between adverse events and medical liability claims. The study found that “… a substantial majority of malpractice claims filed are not based on actual provider carelessness.”123 In fact, the authors found that negligence had occurred in only one-sixth of the filed claims.124 Finally, they concluded that “in its initial filing stage the tort system is even more error-prone than the medical care system.”125
One of the authors of the Harvard Study, Troyen A. Brennan and two colleagues, conducted a follow-up in 1996.126 They found that the only significant predictor of payment to medical liability plaintiffs in the form of a jury verdict or a settlement was the severity of a patient’s disability, and not the presence of an adverse event due to negligence.127
The Institute of Medicine report “To Err is Human” (the “IOM Report”) used information from the Harvard Study to speculate that up to 98,000 deaths per year are due to preventable medical errors. While there are many reasons to take issue with the way that particular estimate was derived128, the principal finding of the report was that the vast majority of patient injuries are due to defects in the systems of medical care delivery, and not due to negligence on the part of providers. True advocates of patient safety -- such as the AMA and the IOM -- are fighting to replace the fault-based, adversarial medical liability system (which gives all parties strong incentives to conceal errors and system defects) with a system that encourages all parties to promote patient safety by reporting errors and system defects. However, trial lawyers stand in firm opposition to changing our broken liability system, because today’s injured patients are tomorrow’s multimillion dollar clients.
F. AMA policy is to be part of the solution, not the problem. The AMA believes that one preventable error is one error too many. In fact, the AMA helped launch the National Patient Safety Foundation in 1996, well before publication of the IOM report, and has contributed $7.3 million to the Foundation’s efforts. The Foundation’s approach is to create a culture of cooperative learning and mutual improvement, as opposed to a culture of shame and blame.
123 PAUL C. WIELER ET AL., A MEASURE OF MALPRACTICE: MEDICAL INJURY, MALPRACTICE LITIGATION & PATIENT COMPENSATION 140 (Harvard University Press 1993). 124 Id. at 139. 125 Id. at 140. 126 Troyen A. Brennan, Colin M. Sox & Helen R. Burstin, supra note 113. 127 Id. at 1965. 128 For example, McDonald et al. find that the underlying studies of the IOM report were “observational,” not intended “to describe causal relationships.” The authors state "The Harvard study includes no information about the baseline risk of death in these patients or information about deaths in any comparison group. Therefore, it cannot be determined whether adverse events are correlated with, let alone whether they cause, death." The authors comment that “reliance on studies without controls to make headline claims about huge numbers of preventable deaths was one error it did not catch.” See Clement J. McDonald et al., Deaths Due to Medical Errors Are Exaggerated in Institute of Medicine Report, 284 JAMA 93, 93 (2000).
© 2005 American Medical Association. All rights reserved. 58 A-291 G. The AMA supports bipartisan efforts in the House and Senate to advance legislation that would establish the statutory framework to create a “culture of safety” whereby information on health care errors could be reported in a confidential and legally protected manner.
H. On March 12, 2003, the U.S. House of Representatives passed H.R. 663, the “Patient Safety and Quality Improvement Act,” by a vote of 418-6.
I. H.R. 663 would create a confidential, voluntary reporting system in which physicians and other health care providers could report information on errors to entities known as Patient Safety Organizations (PSOs). The PSOs would collect and analyze unique “patient safety data” that would be confidential and legally protected.
J. Similar legislation, S. 720, was introduced in the U.S. Senate by Senators Jeffords (I-VT), Breaux (D-LA), Frist, MD (R-TN), and Gregg (R-NH). On July 23, 2003, the Senate Committee on Health, Education, Labor, and Pensions (HELP) approved S. 720 by a unanimous vote.
K. On July 22, 2004, the Senate substituted the language of S. 720 for the text of H.R. 663 and passed the amended bill by unanimous consent. Shortly after the vote, the Senate requested a conference committee with the House and appointed conferees. The House did not appoint conferees.
L. Congress tried to informally resolve the differences between the House and Senate versions of the bill. However, no further legislative action is expected on this issue in the 108th Congress.
M. In the 109th Congress, the AMA will continue to work with the House and Senate to pass effective patient safety legislation.
Note: The most current version of this document can be accessed electronically by visiting the AMA Web site: http://www.ama-assn.org/go/mlrnow
Additional background and data can be found on the AMA Web site at http://www.ama- assn.org/go/liabilityreform
© 2005 American Medical Association. All rights reserved. 59 A-292 Index - All references are to outline numerals.
A Access to medical care accurate measurement of, III.E2c, III.E2d caps on non-economic damages as effective as improving, II.A4b quality of care related to patient, IV.A Access to medical care, crisis in creation of, I.A2 for elderly patients, III.C6 medical liability reform confirmed as improving, I.D1–I.D5d physicians’ responses to, I.F3 statistical surveys of current, I.D1–I.D5d Access to medical care in crisis states, examples of loss of in Arkansas, I.G4a–I.G4aiv in Connecticut, I.G4b–I.G4biii in Florida, I.G4c–I.G4cv in Georgia, I.G4d–I.G4diii in Illinois, I.G4e–I.G4eiii in Kentucky, I.G4f–I.G4fiii in Massachusetts, I.G4g-I.G4giii in Mississippi, I.G4h–I.G4hiv in Missouri, I.G4i–I.G4iii in Nevada, I.G4k–I.G4kiii in New Jersey, I.G4l–I.G4liii in New York, I.G4m–I.Gmliii in North Carolina, I.G4j–I.G4jiii in Ohio, I.G4n–I.G4niii in Oregon, I.G4o–I.G4oiii in Pennsylvania, I.G4p–I.G4piii in Texas, I.G4q–I.G4qiii in Washington, I.G4r–I.G4riii in West Virginia, I.G4s–I.Gsriii in Wyoming, I.G4t–I.G4ti Adverse events, Harvard Medical Practice Study of incidence of, IV.E Affordability crisis for liability premiums in 1980s, I.B1–I.B3 Agency for Healthcare Research and Quality (AHRQ) study on caps for non-economic damages, II.A4 Alabama, caps on non-economic damages struck down by courts in, II.B5c Alaska cap on non-economic damages in, II.B1a court rulings upholding cap on non-economic damages in, II.B5a AM Best, Best’s Aggregates & Averages, footnotes 96, 107, 115 American Association of Health Plans (AAHP), insurance regulation studied by, III.A4–III.A5 footnotes 104, 105, 106 Americans for Insurance Reform, footnote 95 American Hospital Association, footnote 12, 13 American Medical Association (AMA) culture of safety supported by, III.D2, IV.G footnotes 18, 40, 43, 44, 55 H.R. 5 Myth document of, III.C–III.C12 identification of crisis states by, I.G2
© 2005 American Medical Association. All rights reserved. 60 A-293 legislation to create “culture of safety” supported by, III.D2 National Patient Safety Foundation involving, IV.F Proposition 103 Myth document of, III.B–III.B4b support of HEALTH Act of 2004 (H.R. 4280) by, II.C4g support of Senate medical liability reform measures by, II.C5a, II.C5d–II.C5e, II.C5f Anderson, Richard E., footnotes 1, 30, 83, 87 Anti-tort reform groups, studies contradicting claims of, III.A–III.A5 Arguments and claims opposing medical liability reform, responses to, III.A–III.F2e Arkansas examples of loss of access to medical care in, I.G4a–I.G4aiv as medical liability crisis state, I.G2a Associated Press, The and State and Local Wire Service, footnote 73 Association of Trial Lawyers of America, footnote 108 Attorney’s fees myth about restricting, III.C7 sliding scale for, II.C4biii Awards maximized for patients under HEALTH Act, II.C4biii, III.C7 for “pain and suffering,” public support of reasonable limits on, II.C6b statistics for medical liability, I.C–I.C6
B Berenson, Robert, footnote 39 Blue Cross/Blue Shield Association footnotes 10, 14, 33, 41, 45, 46, 47, 48, 49, 114 medical liability insurance crisis seen as threatening healthcare affordability by, I.G3 projections of fee increases due to liability premiums, I.E7 recognition of AMA crisis state designation by, I.G3a reduced access to care due to medical liability crisis noted by, I.G3b–I.G3biii Bovbjerg, Randall R., footnote 51 Brennan, Troyen A., footnotes 113, 123, 127, 128 Burstin, Helen R., footnotes 113, 127, 128
C California cap on non-economic damages in, II.B1a, II.B2a, II.B2b claims in behalf of children under MICRA in, III.C4 court rulings upholding cap on non-economic damages in, II.B5a as currently stable for medical liability crisis, I.G2c medical liability premiums in, III.D1 MICRA cap on non-economic damages in, II.A5b, II.B2, II.B7–II.B7g, III.B–III.B1d slow growth in medical liability premiums in, II.A5b Caps on economic damages caps case law, footnotes 76-82 court rulings in states upholding, II.B5b not part of HEALTH Act, III.C1 Caps on medical liability awards, liability insurance premiums reduced by, II.A2 Caps on non-economic damages effectiveness of, II.B2–II.B2b establishing federal standard for, II.C4e failed legal challenges to, II.B6–II.B6e
© 2005 American Medical Association. All rights reserved. 61 A-294 GAO study of lower premiums in states having, III.B1b judicial activity and decisions affecting, II.B–II.B5d liability insurance premiums reduced by, II.A1, III.C2 as limits on recoveries rather than impermissible barrier to courts, II.B6d medical liability claims rates reduced by, III.C2 MICRA system as example of state, II.A5b, II.B2, II.B7–II.B7h, III.C6. See also Medical Injury Compensation Reform Act of 1975 (MICRA) (California) patients’ access to care protected by, II.A4 as question of policy properly within legislature’s authority, II.B6e recent state legislation enacting, II.B3–II.B3k societal goals supporting implementation of, II.B6a–II.B6aii state efforts to enact, II.B–II.B7h as successful at producing savings, II.A5 tort reform for, III.D3 Center for Studying Health System Change, footnote 36 Claims and arguments opposing medical liability reform, responses to, III.A–III.F2e Claims costs, attempts to ease explosion of, I.A3 Claims, explosion in number of medical, I.A3–I.A4 Class action lawsuits, I.E9 Colorado caps on total and non-economic damages in, II.B1–II.B1b court rulings upholding cap on non-economic damages in, II.B5a as currently stable for medical liability crisis, I.G2c Congressional Budget Office (CBO) study on H.R. 5, the HEALTH Act, II.C4f footnotes 91, 111 Connecticut examples of loss of access to medical care in, I.G4b–I.G4biii as medical liability crisis state, I.G2a Crisis states access and cost problems in, I.D3 AMA identification and listing of 20, I.G2 defensive medicine as problem in, I.F5 examples of patients losing access to care in, I.G4–I.G4ti high-risk procedures being refused in, IG3bi residents’ avoidance of practicing in, I.D4 studies of, III.E2a “Culture of safety” current litigation system as not encouraging, IV.D–IV.D3 legal environment conducive to, IV.B supported by AMA, III.D2, IV.G
D Defense costs for physicians in medical liability cases, I.C5 Defensive medicine cost estimates for, I.F2 discussed by professors with medical students, I.D5c, I.F3 effects of, I.E9 forms assumed by, I.F3 practices indicative of, I.F1 as problem in crisis states, I.F4 Deferential rational relationship test
© 2005 American Medical Association. All rights reserved. 62 A-295 in challenges under Due Process Clause, II.B6b in challenges under Equal Protection Clause, II.B6ai Direct reform states, decline in liability insurance premiums in, II.A1 The Doctors’ Company, footnotes 83 Due Process Clause of U.S. Constitution, failed legal challenges to caps under, II.B6b
E Elderly patients, myth about hard cap reforms targeting, III.C6 Emergency departments loss of physicians and/or reduced coverage in, I.D2 specialists declining elective referrals from, I.F3 Encinosa, William, footnote 53 Equal Protection Clause of U.S. Constitution, failed legal challenges to caps under, II.B6a–II.B6aiii Evidence-based medical (EBM), liability system working against practice of, I.D4b Excessive care, medical liability crisis discussed as increasing, I.F3
F Florida cap on non-economic damages in, II.B1a examples of loss of access to medical care in, I.G4c–I.G4cv as medical liability crisis state, I.G2a state legislation enacting caps on non-economic damages by, II.B3a–II.B3aii
G General Accounting Office (GAO) data source improvements needed by, III.E2–III.E2d report on escalating PLI premiums by, III.A1, III.E1 General practitioners’ liability insurance premiums impacted by reforms, II.A2 Georgia caps on non-economic damages struck down by courts in, II.B5c examples of loss of access to medical care in, I.G4d–I.G4diii as medical liability crisis state, I.G2a
H Hallinan, Joseph T., footnote 72 Harris Interactive Inc., footnotes 36, 37 Hawaii, cap on non-economic damages in, II.B1a HEALTH Act of 2004 (H.R. 4280), II.C4g Health Affairs, III.CF footnotes 112, 119, 120, 121, 122 Health Coalition on Liability and Access, footnotes 11, 93 Health insurance premiums, medical liability as adding to, I.E1, I.E9 Healthcare costs. See Medical costs for Americans Health Services Research Institute, footnote 118 Healthy Mothers and Healthy Babies Access to Care Act of 2003 (S. 2061), scope and defeat of, II. C5d Hellinger, Fred, footnote 53 Help Efficient, Accessible, Low-cost, Timely Health Act of 2003 (HEALTH Act, H.R. 5) economic losses compensated under, II.C4bi “fair share” rule allocating damages under, II.C4biv guidelines for punitive damages under, III.C8 House passage of, II.C4c
© 2005 American Medical Association. All rights reserved. 63 A-296 introduction of, II.C4a limits on non-economic damages under, II.C4bii, II.C4d maintenance of state laws on damages under, II.C4bii myths raised by trial bar in relation to, III.C–III.C12 periodic payments of future damages under, II.C4biv, III.C9 sliding scale for attorney’s fees to maximize jury award for patients under, II.C4biii statute of limitations limited by, III.C3 High-risk patients, cutbacks in accepting, I.B2 High-risk procedures, cutbacks in performing, I.B2, IG3bi Hinderberger, Phil, footnote 85 House of Representatives, U.S. H.R. 5, the HEALTH Act, passed by, II.C4a–II.C4g legislation for confidential and voluntary reporting system on errors passed by, IV.J H.R. 5. See Help Efficient, Accessible, Low-cost, Timely Health Act of 2003 (HEALTH Act, H.R. 5)
I Idaho cap on non-economic damages in, II.B1a court rulings upholding cap on non-economic damages in, II.B5a state legislation enacting caps on non-economic damages by, II.B3b–II.B3bi Illinois caps on non-economic damages struck down by courts in, II.B5c examples of loss of access to medical care in, I.G4e–I.G4eiii as medical liability crisis state, I.G2a Indiana cap on total damages in, II.B1b courts upholding both economic and non-economic damages in, II.B4b as currently stable for medical liability crisis, I.G2c Institute of Medicine (IOM) report on medical errors, IV.E “Insurance cycle,” claims about, III.A3 Insurance regulation, III.A4 Insurers, medical liability asset allocation and investment income of, III.A2 challenges to rate increases by, III.B4–III.B4b exodus from medical insurance market of, I.A1, III.A3–III.A4 investment yields of, III.A2, III.C10, III.E1 myth about profitability of, III.D4 myths about premiums charged by, III.C10, III.E1 types of investments by, III.A5 Iowa, state legislation enacting caps on non-economic damages by, II.B3c–II.B3ci
J Joint Economic Committee (U.S. Congress) study supporting caps on non-economic damages, II.A5– II.A5d footnotes 54, 55, 56 Judicial activity regarding caps on non-economic damages by courts in states striking down caps, II.B5c by courts in states upholding caps, II.B5a, II.B5b, II.B5d Jury awards disability as predictor of payment for, IV.E as driving medical liability crisis, III.A3, III.C12
© 2005 American Medical Association. All rights reserved. 64 A-297 maximized for patients under HEALTH Act, II.C4biii trends in, I.C–I.C6 Jury, removing determination of damages from consideration by, II.B6ci Jury Verdict Research data, I.C7
K Kansas cap on non-economic damages in, II.B1a caps on non-economic damages struck down by courts in, II.B5c court rulings upholding cap on non-economic damages in, II.B5a Kentucky examples of loss of access to medical care in, I.G4f–I.G4fiii as medical liability crisis state, I.G2a Kessler, Daniel P., footnotes 50, 52
L Lawsuits, medical. See Medical liability cases Litigation system broken, I.E5 as not encouraging culture of safety, IV.D–IV.D3 randomness of, III.D2 Loss ratio of medical liability insurers, III.D4 Lost wages public support for full payment for, II.C6b–II.C6c recoverable under HEALTH Act, III.C1 Louisiana cap on total damages in, II.B1b courts upholding both economic and non-economic damages in, II.B5b as currently stable for medical liability crisis, I.G2c
M McCarran-Ferguson Act, myth about effect of repealing, III.C12 McClellan, Mark B., footnotes 50, 52 McDonald, Clement J., footnote 129 Malpractice cases. See Medical liability cases Maryland cap on non-economic damages in, II.B1a court rulings upholding cap on non-economic damages in, II.B5a Massachusetts cap on non-economic damages in, II.B1a as medical liability crisis state, I.G2a examples of loss of access to medical care in, I.G4g-I.G4giii Maxon, Terry, footnote 73 Median medical liability award, increases in, I.C2 Medicaid program, health care spending for, II.C3 Medical costs for Americans litigation seen by patients as driving up, I.E8–I.E9 medical liability as adding to, I.E1 medical liability insurance as threatening affordable, I.G3 public support for full payment of injured patients for, II.C6b–II.C6c recoverable under HEALTH Act, III.C1
© 2005 American Medical Association. All rights reserved. 65 A-298 Medical errors Institute of Medicine report on, IV.E system failures as majority of, III.D2 Medical expenditures, reforms as lowering general, II.A3 Medical Injury Compensation Reform Act of 1975 (MICRA) (California) cap on non-economic damages in, II.A5b, II.B2, III.B1b claims on behalf of children under, III.C4 as driving force behind California’s success in medical liability premium reductions, III.B1a enactment of, II.B7a, III.B1a as “gold standard” of tort reform, II.B7c HEALTH Act modeled on, III.C2 medical liability premiums paid as fairly proportioned under, II.B7d, III.C11 money saved by injured patients under, II.B7g myths about reforms modeled on, III.C–III.C11 reduced claims processing time under, II.B7b safety net of community clinics under, III.C5 Medical liability cases. See also Class action lawsuits Americans as favoring limits to awards in, I.D1 HEALTH Act as expediting, III.C7 meritless, as underlying reason for medical liability premium increases, III.C12, III.D2 statistics for, I.C–I.C6, I.E6 study of relationship of adverse events and, IV.E Medical liability costs, average annual increases since 1975 in, I.E5a Medical liability crisis access to medical care in. See Access to medical care, crisis in costs increased by, I.E1 defensive medicine to avoid lawsuits caused by, I.F1–I.F5 federal government program costs escalated by, I.E3, II.C3 federal legislation addressing, II.C–II.C6c HHS update in 2002 on, I.E2 history of, I.A–I.B3 identifying problem of, I.A–I.G5ti2 states affected by. See Crisis states trends in injury awards in current, I.C–I.C6 Medical Liability Monitor (MLM), trends and issues tracked by, I.E2 footnotes 90, 110 Medical liability premiums access and cost problems caused by rising, I.D2 fair share paid under California state caps for, II.B7d myth about charges for, III.C10 Ob-Gyn fee increases due to, I.E7 practices closed in states having highest, I.B3 price increase statistics for, II.B7e reduction under MICRA caps of California’s, II.B7f solutions for reducing, II.A–II.C6c surgical fee increases due to, I.E7 tort reforms as holding down, III.D1 Medical students. See also Residents, medical quality of care issues for, I.D5d specialty choices of, effects of crisis on, I.D5a, I.D5d state selected for residency of, I.D5b
© 2005 American Medical Association. All rights reserved. 66 A-299 surveys of, regarding medical liability issues, I.D5a–I.D5d Medicare program, health care spending for, II.C3 Mello, Michelle, footnote 119, 120, 121, 122, 123 Merinstein, Daniel, footnote 16 Meritt, Hawkins & Associates, footnote 15 Michigan cap on non-economic damages in, II.B1a court rulings upholding cap on non-economic damages in, II.B5a Minnesota, court rulings upholding cap on non-economic damages in, II.B5a Mississippi cap on non-economic damages in, II.B1a examples of loss of access to medical care in, I.G4h–I.G4hiv as medical liability crisis state, I.G2a state legislation enacting caps on non-economic damages by, II.B3d–II.B3di Missouri cap on non-economic damages in, II.B1a, II.B2aiii court rulings upholding cap on non-economic damages in, II.B5a examples of loss of access to medical care in, I.G4i–I.G4iiii as medical liability crisis state, I.G2a, II.B5a state legislation enacting caps on non-economic damages by, II.B3e–II.B3eii Montana, cap on non-economic damages in, II.B1a
N National Association of Insurance. Commissioners, footnotes 55, 86 National Bureau of Economic Analysis, footnote 52 Nebraska cap on total damages in, II.B1b court rulings upholding cap on non-economic damages in, II.B5a Nevada cap on non-economic damages in, II.B1a examples of loss of access to medical care in, I.G4kj–I.G4kiii as medical liability crisis state, I.G2a state legislation enacting caps on non-economic damages by, II.B3f–II.B3fii New Hampshire, caps on non-economic damages struck down by courts in, II.B5c New Jersey examples of loss of access to medical care in, I.G4l–I.G4liii as medical liability crisis state, I.G2a New Mexico cap on total damages in, II.B1b courts upholding both economic and non-economic damages in, II.B5b as currently stable for medical liability crisis, I.G2c New York examples of loss of access to medical care in, I.Gm–I.G4miii as medical liability crisis state, I.G2a Non-working spouses, myth about MICRA-style reforms for, III.C5 North Carolina examples of loss of access to medical care in, I.G4j–I.G4jii as medical liability crisis state, I.G2a, II.B5a North Dakota cap on non-economic damages in, II.B1a caps on non-economic damages struck down by courts in, II.B5c
© 2005 American Medical Association. All rights reserved. 67 A-300 Nunnally, Derrick, footnote 17
O Ob-Gyn fee increases due to liability premiums, I.E7 Ob-Gyn liability insurance premiums impacted by reforms, II.A3 Ohio cap on non-economic damages in, II.B1a caps on non-economic damages struck down by courts in, II.B5c department of insurance, footnotes 97, 98 examples of loss of access to medical care in, I.G4n–I.G4niii as medical liability crisis state, I.G2a state legislation enacting caps on non-economic damages by, II.B3g–II.B3gi Oklahoma cap on non-economic damages in, II.B1a state legislation enacting caps on non-economic damages by, II.B3h–II.B3hi Oregon caps on non-economic damages struck down by courts in, II.B5c examples of loss of access to medical care in, I.G4o–I.G4oiii as medical liability crisis state, I.G2a
P Pace, Nicholas, footnotes 84 “Pain and suffering,” public support for reasonable limits on awards for, II.C6b Patient Safety and Quality Improvement Act of 2003 (S. 720) AMA support of, IV.E – IV.I introduction in Senate of, IV.G voluntary reporting system of, IV.I Patient safety efforts for medical liability reform, III.D2, IV.A–IV.M congressional, IV.G–IV.M culture of safety needed for, IV.B, IV.D fear of litigation as obstructing, IV.C replacement of adversarial system with promotion of, IV.E Patient Safety Organizations (PSOs), III.D3, IV.I Patients First Act of 2003 (S. 11), introduction and defeat of, II.C5a–II.C5b Payments, caps as helping to ensure medical-related (economic), II.B6aii, III.C5 Peer review statutes protecting confidentiality of adverse event discussions, III.D2 Pennsylvania examples of loss of access to medical care in, I.G4p–I.G4piii as medical liability crisis state, I.G2a medical society of, footnote 118 state legislation enacting caps on non-economic damages by, II.B3i–II.B3ii Periodic payments of future damages under HEALTH Act, II.C4biv, III.C10 Physician Insurers Association of America, footnotes 2, 9, 31, 32, 83, 107 Physician mobility, measuring, III.E2b Physicians caps on non-economic damages as effective in improving supply of, II.A4b counts of, accuracy improvements needed for, III.E2b defensive medicine practices by, I.F1–I.F3 ensuring availability of, II.B6aii ensuring continued existence of insurance for, II.B6aii loss of, I.D2, I.G3bii, III.C5
© 2005 American Medical Association. All rights reserved. 68 A-301 myth about replacing tort reform with replacing incompetent, III.D2 reluctance to perform complex procedures by, III.C4 responses to breakdown of access to care by, I.F3 retiring, increase in, I.G3bii Plaintiffs of medical liability claims, loss statistics for, I.C4, I.E6 Practices closed in states with highest lawsuit and insurance premium rates, I.B3 Pregnancy and Trauma Care Access Protection Act of 2004 (S. 2207), introduction and defeat of, II.C6e PricewaterhouseCoopers study of litigation causing health insurance cost increases, I.E9 footnote 35 Principles of preemption protecting states with existing non-economic damages cap, II.C4e Private insurers leaving system during 1970s, I.A1 Proposition 103 (California) claim of responsibility for lowering liability insurance premiums as myth of, III.B–III.B4b coverage of insurers by, incomplete, III.B2–III.B2b hearing for challenges to premium increases under, III.B4 lacking substantial effect on liability premiums, III.B3, III.C11 Public Citizen, studies contradicting claims of, III.A–III.A5 Public support for federal medical liability reform legislation, II.C7–II.C7c Punitive damages, myth about standards for, III.C9
Q Quality of medical care medical students’ concerns about, I.D5c as related to access to medical care, IV.A seen as affected by medical liability crisis, I.D5c
R Ramachandran, Raghu, footnotes 99, 100 Rand Institute for Civil Justice, footnote 27 Rational relationship test. See Deferential rational relationship test Reform public support of, II.C7–II.C7c as solution to medical liability and patient care access crises, II.A–II.C7b. See also individual reform types Rehabilitation costs as recoverable under HEALTH Act, III.C1 Reinsurance, effects of, I.E9 Residents, medical. See also Medical students liability concern statistics for, I.D4a liability suits against, I.D4b Right to trial by jury, court decision of damages not seen as violating, II.B6ci Risk management, effects of, I.E9
S Saelens, Holly, footnotes 97, 98 Safety net hospitals and clinics, specialists as declining referrals by, I.F3 Senate, U.S., medical reform activities in, II.C5–II.C5f Sloan, Frank, footnote 51 Smarr, Lawrence E., footnote 107 South Dakota, cap on non-economic damages in, II.B1a Sox, Colin M., footnotes 113, 127, 128 Specialties, medical
© 2005 American Medical Association. All rights reserved. 69 A-302 medical liability crisis as factor in choice of, I.D5d residents’ avoidance of high-risk, I.D4a Specialists, physician changes in accepting emergency department referrals by, I.F3 elderly patients’ access to, III.C6 Stable states not experiencing liability crisis, I.G2c State compensation funds, caps as helping to ensure existence of, II.B5aii State efforts to enact caps on non-economic damages, II.B–II.B7h State laws campaigns to reform, I.A3 footnotes 57-70, 74, 75 on damages, HEALTH Act allowing states flexibility in maintaining, II.C4bii, II.C4e regulating insurance industry, III.C12 stripped of effective provisions under state constitutions, II.C1 State legislation enacting caps on non-economic damages, recent in Florida, II.B3a–II.B3aii in Idaho, II.B3b–II.B3bi in Iowa, II.B3c–II.B3ci in Mississippi, II.B3d–II.B3dii in Missouri, II.B3e–II.B3eii in Nevada, II.B3f–II.B3fii in Ohio, II.B3g–II.B3gi in Oklahoma, II.B3h–II.B3hii in Pennsylvania, II.B3i–II.B3ii in Texas, II.B3j–II.B3jiv in West Virginia, II.B3k–II.B3kii in Wyoming, II.B3l. Statute of limitations, myth about adjusting length of, III.C3 Studdart, David, footnote 119, 120, 121, 122, 123 Students. See Medical students Supremacy Clause protecting states with existing non-economic damages cap, II.C4e Surgical fee increases due to liability premiums, I.E7
T Taylor, Stuart, footnote 34 Texas cap on non-economic damages in, II.B1a examples of loss of access to medical care in, I.G4q–I.G4qiii as medical liability crisis state, I.G2a state legislation enacting caps on non-economic damages by, II.B3i–II.B3iiv Thorpe, Kenneth E., footnote 112 Tillinghast-Towers Perrin footnotes 23, 24, 25, 26, 27, 28, 29, 107, 109 study on litigation system and costs by, I.E5–I.E5b Tort claimants, differentiating injury values above and below cap for, II.B6aiii Tort reform California’s MICRA system as “gold standard” for, II.B7c myth of beneficiaries of, III.D3 myth about penalties and ineffectiveness of, III.D1 Tort system costs and compensation in U.S., I.E5a–I.E5e
© 2005 American Medical Association. All rights reserved. 70 A-303 indictment of, congressional, II.A5c Trial bar myths about H.R. 5, III.C–III.C12 about tort reform, III.D1
U Underserved and rural areas, loss of physicians as severe for, III.C5 Uninsured patients, specialists as declining referrals for, I.F3 U.S. Department of Health and Human Services footnotes 19, 23, 21, 22, 23, 38, 42, 53, 88, 89, 101, 102, 103 medical liability crisis reports by, I.E2–I.E4, I.G1 report in 2003 on new health care crisis by, I.E1 U.S. General Accounting Office, footnotes 94, 116, 117 Unnecessary care, medical liability crisis discussed as increasing, I.F3 Utah, cap on non-economic damages in, II.B1a Utilization statistics, need for multi-payor sources of, III.E2d
V Virginia cap on total damages in, II.B1b court rulings upholding cap on non-economic damages in, II.B5a
W Wall Street Journal, The, footnotes 71, 72 Washington (state) caps on non-economic damages struck down by courts in, II.B5c examples of loss of access to medical care in, I.G4r–I.G4riii as medical liability crisis state, I.G2a West Virginia cap on non-economic damages in, II.B1a court rulings upholding cap on non-economic damages in, II.B5a examples of loss of access to medical care in, I.G4s–I.Gsriii as medical liability crisis state, I.G2a, II.B5a state legislation enacting caps on non-economic damages by, II.B3k–II.B3kii Wieler, Paul C., footnotes 124, 125, 126 Wirthlin Worldwide, footnotes 34, 92 Wisconsin cap on non-economic damages in, II.B1a court rulings upholding cap on non-economic damages in, II.B5a as currently stable for medical liability crisis, I.G2c Wyoming examples of loss of access to medical care in, I.G4t–I.G4ti2 as medical liability crisis state, I.G2a
Z Zimmerman, Rachel, footnote 72 Zuckerman, Stephen, footnote 51
© 2005 American Medical Association. All rights reserved. 71 A-304