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Marc A. Rodwin et al., Malpractice Premiums In Massachusetts



A Suffolk University Law study on medical malpractice rates, written by Marc A. Rodwin, Hak J. Chang, Melissa M. Ozaeta, and Richard J. Omar, and published by Health Affairs by has been getting a lot of attention. (Rodwin is a professor; Ozaeta and Omar are students; Chang is a recent Suffolk graduate.) The study finds skyrocketing malpractice rates, especially for high-risk doctors. Yet the authors conclude that there is no crisis, and issue a press release to that effect. Let's compare confirmation bias, shall we?

Rodwin's study (via Robinette, also on SSRN), makes the following findings:

  • Mean 2005 malpractice insurance rates are up astronomically since 1975 and 1980 (all numbers adjusted for CPI inflation) and up substantially since 1995 and 2000. (They are up slightly since 1985, and less than 1% lower than in 1990.)
  • The mean paid by "Tier 5" doctors, who make the overwhelming majority of doctors in the state, is up almost 50% since 1995 and up about 12% since 1990.
  • In 1990, a majority of doctors paid less than $10,000 for a policy; that number was down substantially in 2005. The number of doctors who went from $1M/$3M to $2M/$6M coverage quadrupled.
  • Mean premiums for high-risk specialities—spinal, neuro, and ob/gyn—were up over 60% between 2000 and 2005 to over $117 thousand/year. That's also a substantial increase from 1990.

The authors' conclusion? "If individual states have premium crises, Massachusetts should. However, it does not." What?!?

There seems to be a new game in legal academia, which I will call the chutzpah approach to empirical research. Do a study, call it empirical, and then make wild conclusions that are not supported by the data, or, in this case, actively contradicted by the data.

Here, the authors have cherry-picked comparison points. Mean rates have gone down slightly since 1990 (except for the types of doctors reformers are complaining about the most); ergo, no crisis. Why is 1990 the appropriate reference point, and not the beginning of the data set in 1975? How can you conclude that Massachusetts is not in a crisis because rates haven't gone up since 1990 unless you have a basis to say that the 1990 rates were not also crisis rates by virtue of astronomically increasing since 1980? And aren't those wildly increasing rates for important subspecialities of concern?

Apparently not, and the disingenuous conclusion results in the press and a lot of bloggers parroting the conclusion while ignoring the fact that the underlying data contradicts the conclusion and supports the case of doctors and medical malpractice reformers: Boston Globe; InjuryBoard ("There is no medical malpractice crisis"); Turkewitz ("A study debunks the medical malpractice crisis"); Ambrogi ("Study Debunks Med-Mal Crisis").

(Separately, the study has several fundamental methodological errors: it measures premiums in inflation-adjusted dollars, but measures coverage in nominal dollars. Thus that 2005 premium isn't buying as much coverage as the 1990 premium, so one cannot even say that rates have gone down since 1990. The study does note that doctors have shifted from more expensive claims-made to occurrence coverage, but does not adjust its conclusions to account for the degradation of coverage in its apples-oranges comparisons. The study also fails to account for the bias that many doctors paying higher rates have been forced from the market—hence the term "crisis"—reducing the number of doctors paying the higher rates.)

Update, May 22: Much more detail.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.