The New York Times reported a 150% rise in the cost of malpractice insurance for physicians generally. Although malpractice lawsuits against complementary and alternative medicince providers generally have been several multiples lower than those against primary care physicians (according to a 1998 article in JAMA by colleague David Studdert and others), such lawsuits (the article noted) are bound to increase as does “claims consciousness” among patients and clients.

The cost of medical malpractice insurance in New York City, Westchester County and on Long Island has risen by nearly 150 percent since 1999, creating severe financial strains that have limited patients’ access to such specialties as obstetrics and gynecology and made New York a “crisis state” for doctors, according to a report released yesterday by a hospital trade group.
The trade group, the Greater New York Hospital Association, which represents medical institutions in New York, New Jersey, Connecticut and Rhode Island, said its analysis had focused on 34 hospitals in and around New York City. On average, it said, the hospitals have been billed for malpractice premium increases of 27 percent a year for five years.
“The increasing cost of malpractice insurance has become a pressing burden for New York’s financially fragile hospitals,” said Kenneth E. Raske, the association’s president.
The association said it would use its analysis to lobby in Albany and try to bring about changes. While it did not offer specific proposals, it pointed to measures taken by other states, including limits on money damages for pain and suffering in malpractice lawsuits and on lawyers’ fees.
The report appeared to contain few surprises for economists and insurance industry executives, who said malpractice insurance had been a losing business for years.
“To be fair, the medical profession has to pay closer attention to some of its own,” said Robert P. Hartwig, chief economist for the Insurance Information Institute, a trade group in New York. “There are good doctors and there are bad doctors.”
But Mr. Hartwig added that the spiraling costs were unlikely to be contained without government-imposed limits on jury awards.
The study found that the increases in the New York area far exceeded those across the nation. The association said its hospitals’ premiums were up 51 percent in 2004 after rising 23 percent in 2003. Premiums rose 16 percent in 2004 and 8 percent in 2003 for hospitals across the nation, according to estimates by Medicare.
The reasons for the steep rise in New York are complex, the study said, including structural changes in the insurance industry and the impact of “mega awards” on what plaintiffs and their lawyers have learned to expect in malpractice suits.
Since 2000, the number of insurers providing malpractice insurance to New York area hospitals has fallen to four from six, the association said. It said the New York insurers, compared with those in other states, had had some of the worst financial results, paying out $1.44 in claims for each dollar collected in premiums.
And it said many of the nation’s largest malpractice awards, some exceeding $90 million, had occurred in New York City. Although such awards are routinely reduced before the cases are settled, the study listed huge settlements reached in recent years, including one for $50.1 million in Manhattan in 2002 and another for $10.6 million in Brooklyn in 2000.
Both those cases involved children who suffered brain damage while under hospital care.
From: The New York Times
Malpractice Costs Up 150% Since 1999, Hospitals Say
By THOMAS J. LUECK (Published: January 6, 2005).