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"The ob/gyn and legal liability: condition critical"

Contemporary Ob/Gyn sponsors a roundtable on the med-mal crisis. Yale Medicine professor Dr. Robert Auerbach comments:

The American Trial Lawyers Association (ATLA) has been very effective at perpetrating three myths on the American public. The first is that we're in this insurance crisis because the stock market tumbled. ATLA argues that insurance companies need to increase their premiums because they lost so much in the market. There's a fair amount of data to show that's not true. Insurance companies are regulated on a state-by-state basis, and in virtually every state, insurers can have no more than 10% of their assets in the stock market. In fact, when you look at investment income from insurance companies across the board, it only fell about 1.6%, from about 5.6% to 4%, during the stock market tumble.

The Government Accountability Office (GAO) says that at most, about 7% of our premiums may be attributable to stock market losses. With premiums escalating at 30% per year, that's really a very, very small proportion.

The second myth ATLA has been perpetrating is that insurance companies are price gouging. Quite to the contrary, since 1990, malpractice insurance has not been a profitable business. Even if investment income is considered, this line of insurance has been unprofitable since 2000.

The third myth is that a very small proportion of all physicians are responsible for the majority of claims. That is a sort of statistical magic, because unfortunately, a small proportion of the physicians in high-risk specialties, such as obstetrics and gynecology and neurosurgery, are responsible for a disproportionate number of the claims.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.