More on Michigan malpractice "reform" and rate increases
In recent years, knowledgeable critics have criticized Michigan malpractice insurers for failing to reduce their liability rates in response to the draconian "reforms" of the late 80s which significantly eroded consumer rights and victims' rights. Apparently in response to these criticisms, one Michigan insurer attempted to achieve maximum public relations value out of its recent decision to drop 2008 rates by about six percent. American Physicians Insurance Corporation, the malpractice insurer with the largest share of the Michigan market (about 30 percent) announced a rate cut of 6.5 percent.
Fortunately, the editors of Lawyers Weekly explored a little deeper to present a more thoughtful explanation of this issue. The Editors noted that while malpractice filings are down 75 percent since 1986, premiums are actually up 51 percent since records were made available in 1993. Furthermore, not only are the number of claims down significantly, but the cost of defense (down 7 percent since 1991) and the indemnity payments made (down 60 percent since 1991), on average, are well down.
Thus, only one quarter the number of cases are being filed, they are cheaper to defend, on average, and the payout is sixty percent less----but malpractice premiums are 141 percent of what they were. The only logical conclusion from this analysis is that doctors, other health care providers, Michigan citizens and legislators, and victims of medical mistakes have all been hoodwinked into underwriting massive insurance profits for a handful of multi-million dollar corporations.