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New Task Force Confronts Medical Malpractice Reform
New York, New York - After years of artificially low rate increases, State Insurance
Superintendent Eric R. Dinallo today announced that the Insurance
Department is approving a 14 percent increase to medical malpractice
insurance rates. While lower than what insurance companies had
requested, this increase is necessary to avoid further financial
deterioration of the companies and perhaps an irreversible crisis in an
already severely distressed market.
The rate
increase comes after years of setting rates below what was needed; the
State’s appropriation for general state expenses of $691 million of
medical malpractice insurance reserve funds, which could have served to
enhance insurer solvency and temper rate spikes; and the prior failure
to successfully address the underlying causes of high medical
malpractice costs.
On the same day as the
rate increase, Governor Eliot Spitzer charged Superintendent Dinallo
with heading a new task force to confront the fundamental drivers of
high medical malpractice costs. The task force, which will report back
to the Governor by the end of the year, will include New York State
Commissioner of Health Richard F. Daines, M.D., and a broad range of
representatives from physician and hospital associations, the insurance
industry, consumer groups, health plans, trial lawyers and the
Legislature.
Without this rate approval
paired with a new, comprehensive effort to address the underlying
causes of high insurance costs, the medical malpractice insurance
industry will continue to deteriorate into crisis – a spiraling effect
that could drive insurance companies out of business and fail to
attract new ones into the marketplace, forcing doctors out of New York
and decreasing access to health care for all New Yorkers.
“After
years of failing to confront the fundamental problems that have led to
this current environment, we have inherited the worst of both worlds –
physicians who cannot afford to practice medicine, and insurers whose
financial condition is rapidly eroding. The cause is high medical
liability costs, and this administration is going to address it,” said
Dinallo. “I understand many health professionals already feel rates are
too high, which is why we are asking these and other stakeholders to
join us in developing a lasting, practical solution. But the fact
remains, this rate increase is less than what carriers sought and is
what our experts believe is necessary to stave off an industry-wide
crisis unless the underlying problem of high medical malpractice costs
is addressed.”
As a physician and former CEO
of a major New York hospital, Commissioner Daines agreed with Dinallo’s
assessment: “I am concerned that the increasing cost of medical
liability insurance will drive some physicians out of the field and
will discourage young people from entering the medical profession in
the first place,” said Dr. Daines. “Resolving this problem is necessary
to ensure New Yorkers maintain access to a full range of health care
services.”
The new task force will
recommend short- and long-term reform options for addressing the causes
of high medical liability costs. The group will consider all potential
solutions to controlling medical malpractice costs, including risk
management, legal reform and regulatory changes to foster a stable,
competitive environment with financially sound companies – including
new entrants into the marketplace – that offer competitive rates to New
York’s health care providers.
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