Controlling rising health care costs

[C1ay]

This is a real cost, but it is not a major driver. I think in the US, malpractice is about 4% of the total health expenditures. Frankly, this is a HUGE dollar amount, but it is not a significant overall driver.

I must have worded my point poorly. For most health care providers, the cost of malpractice insurance is one of their largest costs. This certainly makes it a major driver in the picture. This cost is passed on to the consumer and in turn on to the healthcare insurance of the consumer. I say that if you can drive this one cost down you can effect a reduction from the top down. It is not all we would like to see and I'm sure there are other areas of cost that need to be addressed but malpractice insurance premiums are a cost that is putting some providers out of business and reducing available services at others. The only way I see to reduce this is to attack the cost/quantity of litigation malpractice insurers are facing and the payouts they are having to make.

[Biochemist]

....For most health care providers, the cost of malpractice insurance is one of their largest costs. This certainly makes it a major driver in the picture....

This is true for some physician specialties, but not for non-physician providers. The majority of providers are not physicians. Malpractice insurance per physician ranges from under $10,000 per annum for low-risk specialties (like internal medicine) to well over $100,000 per year for high risk specialites (like OB and anesthesia). Rates vary by state.

 

In the case of an internal medicine doc, the insurance adds perhaps 10% to his costs. For some obstectics physicians, it is about half of their total cost billed to the payor. The larger prolem in the latter cases is that some OBs choose not to stay in practice if their insurance rates are high and rising quickly. It also effectively rules out any opportunity for part-time practice.

 

Malpractice rates for other providers (pharmacies, home health, hospitals, therapies, dentists, etc) are relatively low as a fraction of billed services.

 

Overall the direct malpractice cost is about 4% of the US healthcare cost. It has been steadily rising for most of the last decade, tracking with the rising aggression and opportunism of tort leaches, er, attorneys.