How to Reduce Medical Malpractice Insurance Rates

After remaining steady for several years, insurance premiums for medical malpractice coverage began to increase rapidly in the late 1990s. As a result of these rapid hikes, numerous health care providers, including physicians, have moved out of states in which premiums are highest, eliminated high-risk procedures, and begun to practice "defensive" medicine, in which more tests or procedures are ordered, thus raising the cost of care. Yet, there remain several steps that doctors and hospitals can take to reduce their rates.

Instructions

• 1

  Find a different insurance provider. Most malpractice insurance is offered by private insurance companies, which compete with each other for business. You might find significantly better rates if you shop your coverage around to several companies.

• 2

  Form or join a non-profit insurance cooperative. Since the 1970s, many physicians and hospitals have formed non-profit insurance cooperatives in which members pool money that is used to pay settlements for malpractice. These organizations can save money by cutting out the middleman; rates no longer have to provide a profit margin for insurers. They also can allow greater flexibility in types and structure of coverage.

• 3

  Petition your medical organization or regulator to weed out bad doctors. Because insurance companies pool risk, doctors who are frequently involved in malpractice suits cause an increase not only in their rates, but in the rates of other physicians. Many states and specialties have their own regulatory bodies, and petitioning those bodies for stricter sanctions or getting rid of bad doctors in your practice can help lower premiums overall.

• 4

  Work for tort reform, both by petitioning legislators and by working for candidates who support tort reform.A study by the Government Accountability Office found that malpractice insurance rates were generally lower in states that placed a cap on damages from malpractice suits.