For the past two years the American Medical Association has led a remarkably successful campaign to convince politicians, the media, and the public that medical malpractice insurance is becoming unaffordable. The AMA's website claims that "skyrocketing medical liability premiums—$200,000 a year or more in some high-risk specialties—are forcing physicians to limit services, retire early, or move to a state with reforms where premiums are more stable. The crisis is threatening access to care for patients in states without liability reforms."
The answer, according to the AMA, is not regulating insurance rates, but passing "medical liability reform" laws that cap, ideally at $250,000, the amount that courts can award a patient for "noneconomic damages" (pain and suffering) due to malpractice. Liability reform has passed in Florida, Texas, and other states. At the federal level, liability reform has passed the U.S. House and is stalled in the Senate, as President Bush complained during one of his debates with John Kerry.
The AMA's website provides a great deal of ammunition regarding "the AMA's No. 1 legislative priority," including a 63-page "compendium of facts supporting medical liability reform and debunking arguments against reform."
Conspicuously absent from this compendium, however, is any reference to the AMA's own national survey. This survey asks self-employed doctors not only about their malpractice premiums, but also about their incomes. By comparing premiums to incomes, we can get some idea of how affordable malpractice insurance really is.
Doing just fine, thank you
The most recent results, published in Physician Socioeconomic Statistics 2003, are hard to square with the AMA's public claims. The median malpractice premium was $11,000, quite far from the $200,000 figure on the AMA's website. $200,000, as it turns out, was the median income.
Of course, the AMA's website isn't talking about doctors in general. It's talking about doctors "in some high-risk specialties." Fortunately, the AMA survey breaks income and premiums down across several medical specialties.
| Specialty | Median Premium | Median Income |
| General/Family Practice | $8,000 | $140,000 |
| Internal Medicine | $9,000 | $180,000 |
| Surgery | $20,000 | $250,000 |
| Pediatrics | $7,000 | $142,000 |
| Obstetrics/Gynecology | $35,000 | $225,000 |
| Radiology | $12,000 | $350,000 |
| Psychiatry | $4,000 | $120,000 |
| Anesthesiology | $12,000 | $270,000 |
| Pathology | $7,000 | $275,000 |
| Other | $7,000 | $200,000 |
Again, the figures don't fit the AMA's agenda. Although some specialties have higher premiums, those specialties also tend to be better paid. Among ob/gyns, for example, the median premium is $24,000 higher than it is for doctors as a group. But ob/gyns' median income is also higher than the median for all doctors—and by about the same amount ($25,000).
It is tempting to subtract premiums from incomes to see how much doctors have left after paying their malpractice premiums. But actually this is unnecessary, because malpractice insurance has already been taken out of the tabled incomes. Physician Socioeconomic Statistics describes the figures as "net incomes after expenses before taxes minus deferred compensation," and a call to the AMA confirmed that the "expenses" taken out include the cost of malpractice insurance. In other words, even after paying malpractice insurance, self-employed doctors have a median income (before taxes) of $200,000.
When doctors' incomes are on the table, it is hard to understand how a typical physician could have difficulty paying for malpractice insurance. It is also hard to understand why a typical American—with a median household income of about $43,000 (before taxes)—should spend any time at all worrying about doctors' financial condition.
To make doctors' finances a concern for the rest of us, the AMA suggests that malpractice premiums threaten patients' "access to care." But this threat appears to be a fiction. Two years ago, news stories reported that high malpractice premiums had made it nearly impossible to get an ob/gyn appointment in Las Vegas. Yet when the Government Accountability Office (GAO) made random calls in the Las Vegas area, they found that 28 of 30 ob/gyn practices "were accepting new patients with wait times for an appointment of 3 weeks or less." Across five states with supposed problems, the GAO "determined that many of the reported provider actions taken in response to malpractice pressures were not substantiated or did not widely affect access to health care. For example, some reports of physicians relocating to other states, retiring, or closing practices were not accurate or involved relatively few physicians."
Doctors are hardly a disadvantaged group, and their financial condition is hardly a threat to patient care. The real health problems in this country are familiar and not at all new. The United States has 45 million uninsured and one of the highest infant mortality rates in the developed world, despite spending a larger share of its income on medical care than any other country. In this context, the fact that protecting doctors' incomes has risen to the top of the legislative agenda represents a remarkable coup for the AMA. It is a tragedy, however, for public health.
Paul von Hippel is a Statistician in the Department of Sociology and the Center for Population Research at Ohio State University.