By Frank A. Sloan
A complete research of clinical malpractice from criminal, scientific, fiscal, and assurance views that considers why previous efforts at reform have no longer labored and provides suggestions for life like, possible coverage adjustments.
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When an insurer computes a premium for a future period, it takes account of expected returns from investing money it collects as premiums that it will retain until payments on losses are made. The potential return is positively related to the length of the time period that elapses from the date the claim is filed until payment is actually made. When considering returns on investments, insurance companies look forward, not backward. As explained earlier, in a competitive insurance market, no one should be willing to pay a higher premium to a company just to allow the company to recover losses from errors in its past invest- Why the Crises in Medical Malpractice?
Then how does the large number of invalid claims affect the validity of myth 1? At least at first glance, there appears to be support for the allegation that there are too many lawsuits. The measurement error in estimating the number of negligent adverse events that result in claims is plausibly relevant here as well. Applying the same logic, the true ratio of invalid claims to valid claims could be much higher than three to one. 60 Thus, the system does weed out many invalid claims. 61 Would we want to say that the large number of negative test results provides conclusive evidence of overtesting, even when the tests are justifiable ex ante on a clinical basis?
S. General Accounting Office (June 2003), reinsurance premiums increased at the beginning of the hard market of 2001– 2005 for two reasons. First, there was a general increase in reinsurance premiums following the terrorist acts of September 11, 2001. This may 48 Chapter 2 have reflected a combination of reinsurers’ reassessment of their exposure to serially correlated losses following this event and the loss of surplus. Second, for medical malpractice insurance in particular, reinsurers had experienced increased loss payments since about 1998, and for this reason raised reinsurance premiums to customers in this line of insurance substantially, with increases ranging from 50 to 100 percent.