Malpractice insurers are substantially raising rates, placing restrictions on coverage, dropping physicians, withdrawing from markets and planning more rate hikes for next year, according to the most comprehensive survey of the industry in the nation.
The survey by Chicago-based Medical Liability Monitor, released Thursday afternoon, finds that that most rate increases in 2003 were between 10% and 49%, and 83% of companies say more rate hikes will be necessary in 2004.
Surveying 40 companies covering 65% to 70% of the industry, the report looked at rates in three specialties--internal medicine, general surgery and OB/GYN--in major local markets in all 50 states.
Reporting a total of 641 separate rates, the survey finds that while most rates logged a substantial increase from the year before, 130 rates showed no change and 15 rates actually fell from 2002.
But the Monitor notes that in many cases where rates did not increase, companies had submitted requests with state authorities for rate increases that were still pending at the survey?s July 1 deadline.
Specifically, the report finds that, of the companies surveyed:
- Almost half say some physicians are dropping areas of coverage in order to lower their premiums. For example, OB/GYNs are giving up delivering babies and surgeons are giving up surgery for office-based nonsurgical practices.
- One-fifth have restricted coverage in 2003, most often by forcing physicians to buy their own tail coverage for ?prior acts? under a previous carrier.
- Almost three-quarters tightened underwriting in 2003.
- One-half dropped more physicians from coverage in 2003 than in 2002.
- The Miami area once again tops the list of highest premiums, with Miami obstetricians, for example, paying $249,196 in 2003, a 24% increase over 2002.
- Physicians in Charles City, Va., received the highest percentage increases in 2003: 144.2% for internists, 127.4% for general surgeons and 88.6% for OB/GYNs.
- Wisconsin showed the largest rate decrease for internists, a 14.2% cut in rates, to $5,147. West Virginia reported the biggest cut for general surgeons, a 16% drop to $67,256. And Wisconsin reported the largest decrease for OB/GYNs, a 13.7% cut to $23,677.
- California physicians still pay significantly less than physicians in other major states. For example, Miami internists pay 133.7% more than Los Angeles internists, while Miami general surgeons pay 285.1% more and Miami OB/GYNs pay 220.2% more than their Los Angeles counterparts.