Medical malpractice insurers recorded profits for the fifth straight year in Missouri in 2008, according to the Missouri Department of Insurance. The department’s annual report indicates that the increased profits are a result of fewer claims filed by policyholders along with insurers paying far less for claims filed.
Medical negligence claims in 2008 represented a 10-year low of 1,245 new claims filed. The number of open claims totaled 3,160, which is the lowest number of open claims in the 30 years that the department has been collecting data on medical malpractice insurance carriers. The average claim payment was just $202,612, which was down considerably from the high of $253,888 recorded in 2005. Medical malpractice insurers reported a return on net worth of 24.6% in 2008. This profit margin is slightly down from last year, but considerably higher than earlier this decade.
The most common medical malpractice negligence alleged was:
Poor surgical outcomes (32%)
Non-surgical treatment (20%)
Diagnostic errors (18%)
Patient safety (11%)
Medication problems (9%)
Pregnancy & childbirth complications (7%)
The industry wrote more than $206 million in premiums in 2008. Two insurance carriers, Missouri Professionals Mutual and Missouri Hospital Plan hold roughly 33% of the medical malpractice insurance market. Market share has grown dramatically over the past 10 years for what are called “383 companies.” A 383 is a company that is governed by chapter 383 of the Missouri Revised Statutes. These are non-profit entities that are subject to less regulatory oversight and are not backed by the Missouri Property and Casualty Insurance Guarantee Association, like traditional insurers. These 383 companies are typically formed by a coalition of doctors and physicians and have the legal authority to increase their assessments to their existing members if additional money is needed to pay claims. Roughly half of all Missouri physicians and surgeons are covered this way, with one company controlling 95% of the hospital market.
It appears that, despite any claims to the contrary, the medical malpractice insurance industry is doing just fine here in the great state of Missouri.