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Defending the Practice of Medicine



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COMMENTARY Defending the Practice of Medicine T HERE IS LITTLE DOUBT about the following facts Physicians across the United States have been confronted with alarming increases in the cost of malpractice insurance and access to critical medical services is imperiled in many states National media cover the closing of trauma centers and obstetrical suites and a number of state legislatures have met in special session to attempt to deal with the crisis The American Medical Association has declared 18 states to be in crisis and predicts many more will follow 1 Beyond the headlines however there are several questions that require answers 1 Why have rate increases varied so much by venue and specialty 2 Is the organized plaintiffs bar correct when it argues that these effects have been caused not by an increase in litigation but by insurance company mismanagement and greed 3 Are there effective actions that can be taken now to mitigate the problem 4 What is the price of the status quo This Commentary reviews the extent of the malpractice insurance dilemma as it exists today compares it with historical antecedents analyzes the root causes and suggests practical solutions that are available now THE CRISIS TODAY LOSS OF CAPACITY Capacity is the ability of an insurance company to accept risk in other words to maintain adequate capital to pay the claims that arise from the acceptance of premium More than 1 billion of capacity was withdrawn from the medical malpractice insurance market in 2002 Most notable was the voluntary decision of the St Paul Insurance Company St Paul Minn to cease offering medical malpractice coverage after posting nearly 1000000000 in medical malpractice claims losses in 2001 2 This decision is striking given that the company has been the nation s largest malpractice carrier over the past 2 decades In announcing its decision St Paul s chief executive officer questioned whether medicine was any longer an insurable risk 2 James Hurley a prominent medical



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