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Study Finds Link To High Medical Malpractice Premiums In New York
High medical malpractice premiums in New York can be linked directly to the state's large malpractice litigation awards, according to a new study by the Manhattan Institute's Center for Legal Progress.
Based on a statistical analysis of malpractice premiums and lawsuit awards throughout the nation, the study debunks the argument that high malpractice costs are a result of cyclical insurance-industry trends and price gouging. The findings provide added evidence for the need of malpractice-lawsuit reforms, such as a proposed $250,000 cap on non-economic damages that has been introduced in both houses of the Legislature (A.5674/S.3035, S.4191).
"For the price-gouging hypothesis to make sense, insurance industries must be exercising monopoly power," the study says. "We find that states with more concentrated insurance industries actually have lower premiums."
The study was written by Alexander Tabarrok, associate professor of economics at George Mason University and director of research for The Independent Institute, and Amanda Agan, an economics researcher at George Mason University.
Between 1999 and 2001, New York had the nation's second highest average medical malpractice premium at $42,916 per doctor, according to data compiled by Tabarrok and Agan. The New York premium was more than three times the Vermont average and twice the average in New Jersey, Connecticut, or Massachusetts.
During the same period, New York's average malpractice award per doctor was third highest in the nation at $8,353. Between 2002-2004, that amount jumped 16 percent to the nation's second highest average, at $9,667.
The average payout for all liability awards increased almost 30 percent in 2004 to $459,000, according to the Medical Society of the State of New York.
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