For Florida Insurers Profits Up, Costs Down
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It is a great business model if you can achieve it. Keep your profits up and keep your costs down.
And that is apparently what Florida's largest medical malpractice insurance companies have been doing. They have been paying out less in claims. With a cap of $500,000 and medical malpractice lawsuits expensive to bring, many just aren't filed.
And many patients who are hurt by hospitals and doctors more frequently than not say, 'I'm not that kind of person." That means they don't want to file a lawsuit. It's estimated only one in eight incidents of medical malpractice ever moves forward. Its probably fewer than that.
But back to insurance.
With fewer claims, doctors had been told their insurance rates would drop. That was the promise when some of us voted in caps under the tort reform movement in 2003. Yet this story from the Tampa Bay Business Journal says local doctors there have seen little or no rate relief. Statistics show the average Florida doc cut three percent off his or her insurance bill last year.
Remember Florida doctors saw their rates jump by nearly 100 percent for some specialties between 1999 and 2002. A three percent reduction seems like barely worth mentioning.
Some doctors are beginning to understand the insurance industry first-hand. The Florida Office of Insurance Regulation reports that the seven largest insurance companies that cover Florida doctors saw their nationwide profits rise to $2.2 billion in 2006. It was just $700 million the year before.
Let's hope that the movement for insurers to lower their rates catches on. Four of seven insurers, including First Professionals Insurance Co., have asked the state for a decrease of 11.7 percent this year. It was 8.5 percent last year.
Three other companies have decided to leave their rates alone.