Medical malpractice and insurance rates

The Washington Monthly:
These kinds of volcanic eruptions in insurance premiums have occurred three times in the last 30 years — in the mid 1970s, again in the mid-1980s, and then again following the year 2001. The cause is always the same: a severe drop in investment income for insurers compounded by underpricing in prior years. Each time, insurers and the health care industry have tried to cover up their mismanaged underwriting by blaming lawyers and the legal system. To buy this position, one would have to accept the notion that juries engineered large jury verdicts in the mid-1970s, then stopped for a decade, then engineered large verdicts again in the mid-1980s, stopped for 17 years and then did it again beginning in 2001 — only to stop once again. Of course, this is ludicrous and untrue.

This has been known for a long time, but I guess that insurance companies are more powerful than people who need insurance. I am puzzled about why doctors always side with the insurance companies, though. Why did doctors (in general) get upset over malpractice lawsuits and not get upset about insurance companies raising rates in a manner uncorrelated with medical malpractice lawsuits?


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