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But CBO continued to study the question. Five years of additional research have produced new evidence that has prompted CBO to reach a somewhat different conclusion. In an Oct. 9 letter to Republican Sen. Orrin Hatch of Utah, CBO Director Douglas Elmendorf said that a package of changes including limits on malpractice awards "would reduce total national health care spending by about 0.5 percent (about $11 billion in 2009)."
(BTW, you left out the cost of malpractice insurance.)
It is subsumed within the figure I gave:
Malpractice-insurance premiums and liability awards account for less than 2 percent of overall health-care spending, according to a 2004 study by the Congressional Budget Office. Defensive medicine, the practice of ordering extra tests or procedures to protect against lawsuits, might add another few percentage points, according to some estimates.
Lawsuits account for something like 1% of all healthcare spending (including lawyer fees, defense, settlements and verdicts).
Clearly, that is not where the problem lies.
When was the last time you heard of a health insurer having a bad year for profits? When was the last time you heard of a malpractice insurer having a bad year for profits?
ALSO: Unlike lawyers (who also must carry and can get sued for malpractice), the AMA doesn't always support "self policing" of doctors, to weed out the small percentage in their ranks that account for a disproportionate amount of the suits filed!
You certainly need to consider the cost of malpractice insurance when looking at physicians incomes. If they could cut back on the enormous costs of this insurance, they could cut costs and live on less.
Physicians are having to pay many thousands of dollars annually to this kind of insurance companies.
Malpractice insurance ends up costing the patients in many ways. Not only does the doctor have to charge much more, the hospitals also have to pass these costs onto the paying and insured patients.
It's also a cost that is driving many qualified people away from careers in the medical field. High risk medical fields can end up with a shortage of qualified doctors which adds to the real costs of health care.
"The high cost of malpractice premiums is beginning to lead providers to drop or reduce obstetrical services. Our study presented evidence that high malpractice premiums affect where new obstetricians are locating and it may affect the supply in the future," says Scott B. Ransom, D.O., M.B.A., M.P.H., associate professor of obstetrics and gynecology at the U-M Medical School and of health management and policy at the U-M School of Public Health, and the senior author of the paper.
Malpractice insurance premiums vary widely from state to state. Florida is the highest-premium state, with an average 2004 premium of more than $195,000, followed by Nevada, Michigan, the District of Columbia, Ohio, Massachusetts, West Virginia, Connecticut, Illinois and New York.
The 10 lowest-premium states are Oklahoma, at about $17,000 on average, and Nebraska, South Dakota, Minnesota, Indiana, Idaho, North Dakota, Wisconsin, Arkansas and South Carolina.
Many areas of the country, especially around major metropolitan areas, are experiencing large increases in the average costs of premiums. Between 2003 and 2004, Dade County in Florida, which includes the city of Miami, went from $249,000 to $277,000, an increase of about 11 percent.
Suddenly that average income of $300,000 a year isn't so great.
Any discussion of a physicians yearly income needs to subtract the extreme costs of malpractice insurance right from the start -- all that money is going to greedy malpractice executives and lawyers.
You certainly need to consider the cost of malpractice insurance when looking at physicians incomes. If they could cut back on the enormous costs of this insurance, they could cut costs and live on less.
Physicians are having to pay many thousands of dollars annually to this kind of insurance companies.
Malpractice insurers are reaping profits well above the rest of the "property casualty industry, which has been remarkably profitable over the last five years."
The Americans for Insurance Reform also found that in states with laws limiting malpractice suits, the doctors pay pretty much the same level of premiums as states that don't have such laws.
"In fact, medical malpractice claims constitute one-fifth of 1 percent of annual health care costs in the country," the report stated.
Rising doctors' premiums not due to lawsuit awards
Study suggests insurers raise rates to make up for investment declines
By Liz Kowalczyk, Globe Staff | June 1, 2005
Re-igniting the medical malpractice overhaul debate, a new study by Dartmouth College researchers suggests that huge jury awards and financial settlements for injured patients have not caused the explosive increase in doctors' insurance premiums.
The researchers said a more likely explanation for the escalation is that malpractice insurance companies have raised doctors' premiums to compensate for falling investment returns.
The Dartmouth economists studied actual payments made to patients between 1991 and 2003, the results of which were published yesterday in the journal Health Affairs. Some previous studies have examined jury awards, which often are reduced after trial to comply with doctors' insurance coverage maximums or because the plaintiff settles for less money to avoid an appeal. Researchers found that payments grew an average of 4 percent annually during the years covered by the study, or 52 percent overall since 1991, but only 1.6 percent a year since 2000. The increases are roughly equivalent to the overall rise in healthcare costs, said Amitabh Chandra, lead author and an assistant professor of economics at the New Hampshire college…
Meanwhile, malpractice insurance premiums for internists, general surgeons, and obstetricians have skyrocketed since 2000, jumping 20 to 25 percent in 2002 alone…
''It's not payments that's causing this," Chandra said. ''The simple explanation that comes to mind is the underwriting cycle. If they're making less money from the investment side of things, it's going to cause [insurance companies] to raise rates."
[i]Malpractice insurance premiums vary widely from state to state. Florida is the highest-premium state, with an average 2004 premium of more than $195,000, followed by Nevada, Michigan, the District of Columbia, Ohio, Massachusetts, West Virginia, Connecticut, Illinois and New York.
[...]
Any discussion of a physicians yearly income needs to subtract the extreme costs of malpractice insurance right from the start -- all that money is going to greedy malpractice executives and lawyers.
Interestingly, Florida HAS medical malpractice reform and caps on damages that gutted and reduced a LOT of medical malpractices suits after passage.
Then again, Florida is also the state where we haven't had a major hurricane since 2005, and property insurance premiums keep going up year after year as well!!
BTW: Average income would most likely include NET income, which would already take med mal premium costs into account, like all other (tax write off) business expenses as well. So, 300k is not too shabby.
Hmmm...there is a lot of misinformation out there. I am married to a doctor and 300,000 k is not the norm. My husband works loooooong hours. We hardly see him. Luckily he is a psychiatrist, and the cuts wont affect him as much, however I do have a story where one of his colleagues ended up with $5 for a half hour of work. My 14 year old son makes more than that babysitting. So cuts will effect decisions. I personally would never work for so little with that much education and stress, I don't know why we expect physicians to. I think it needs to be evaluated and do fair cost adjustments for everyone. The family doctors are needed the most and are reimbursed the least. Cardiovascular doctors do get reimbursed at a higher rate so their number probably should have been adjusted a little bit, but not without raising the rates for the family doctors. And also, no my husband does not play golf, we do not have a 800 k home and we finally just bought a new smart t.v. at walmart on clearance after eight years of a free one we got. Its so annoying when people are shocked to find out I don't own any designer clothing or expensive jewlery.
those of us that were against obamacare, made that argument three years ago. in fact that same argument was made in the early 90s when clintoncare was being debated, fortunately that program never passed congress.
What provision in "Obamacare" is causing this?
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