Fifteen of the nation's biggest malpractice insurers have "price-gouged" physicians over the past several years, increasing net premiums by 120% between 2000 and 2004 while their net payments for claims from doctors rose just 5.7%, according to a new study released today.
The study by the New York-based Center for Justice and Democracy found that some insurers increased premiums while the costs of both claims payments and projected future payments were decreasing.
Jay Angoff, former Missouri insurance commissioner and the author of the study, said the data from annual statements by the insurance companies "prove that doctors have been overcharged during the last several years."
Lawrence Smarr, president of the Physician Insurers Association of America, a trade group that represents more than 60 professional liability insurance companies, criticized the study, saying it fails to take into account the fact that insurers set premiums to help build reserves to cover future claims as far as a decade or more in the future.
"Because of the long lag time between premiums collected and (claims) paid, it's really an apples and oranges comparison," Smarr said. He added that "credible entities" have demonstrated that the liability insurance industry has lost money "for the last five years."
Three of the insurers surveyed for the report are publicly traded companies whose business primarily involves physician insurance. Those three, the report said, have all seen their stock prices double over the past three years, a time when the Dow Jones industrial average has remained essentially unchanged.