President Bush loves to blame skyrocketing medical costs on what he deems “junk lawsuits.” Last month, he declared, “Many of the [health care] costs that we’re talking about don’t start in an examining room or an operating room. They start in a courtroom.”
Today’s New York Times blows that argument out of the water. As the paper writes, “The recent jump in premiums shows little correlation to the rise in claims.”
The proof? The price of malpractice premiums for doctors last year rose anywhere between 6.9 and 24.9 percent. But according to the Health and Human Services Department, payments for malpractice last year actually fell by 8.9 percent.
So what’s to blame? Try the stock market. The Des Moines Register pointed out in 2003: “There’s simply no correlation between lawsuits and insurance rates. Rather, insurance rates are tied to the climate of the stock and bond market, where insurance companies invest much of their money.” Over the past decade, during the market boom, premiums rose at a steady 3 percent for doctors. Once the market soured in recent years, though, the insurance industry made up its losses on the backs of doctors, doubling and tripling the price of premiums.