[Congressional Record Volume 149, Number 101 (Thursday, July 10, 2003)]
[Senate]
[Pages S9236-S9239]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE WEISS REPORT

  Mr. McCONNELL. Madam President, during consideration of the motion to 
proceed to S. 11, I took exception with several findings included in 
the Weiss Report on Medical Malpractice Caps that I believed 
misinterpreted the data of the Medical Liability Monitor and the 
National Practicioner Data Bank. Following the vote on the motion to 
invoke cloture, I received a report supporting my conclusions from the 
Physicians Insurance Association of America as well as a statement from 
the Division of Practicioner Data Banks. I ask unanimous consent that 
these documents be printed in the Record.

[[Page S9237]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 The Weiss Ratings Report on Medical Malpractice Caps--Propagating the 
             Myth That Non-Economic Damage Caps Don't Work

       On June 3, 2003, Weiss Ratings, Inc. published a report 
     regarding the performance of the medical malpractice 
     insurance industry entitled Medical Malpractice Caps The 
     Impact of Non-Economic Damage Caps on Physician Premiums, 
     Claims Payout Levels, and Availability of Coverage. The major 
     recommendation of the report is that ``Legislators should put 
     proposals involving non-economic damage caps on hold until 
     convincing evidence can be produced to demonstrate a true 
     benefit to doctors in the form of reduced med mal costs.'' 
     Unfortunately, the Weiss report is ill conceived, and 
     misleads the reader by falsely demonstrating that non-
     economic damage caps have not worked. Both of the data 
     sources used by Weiss have gone on record disagreeing with 
     the report's methodology, as described herein.
       The conclusions drawn by Weiss are opposite of those 
     previously published by reputable entities, such as the 
     Congressional Budget Office, US Department of Health and 
     Human Services, Joint Economic Committee of the United States 
     Congress, Standard & Poors, American Academy of Actuaries, 
     Tillinghast, and Milliman, USA, to name a few (see Appendix 
     A). Unlike Weiss, all of these highly respected organizations 
     have considerable experience and acceptance by government and 
     industry for their knowledge and analytical product.
       The purpose of this document is to evaluate Weiss' use of 
     the data and analytical process. In short, Weiss misuses 
     published industry data in an effort to demonstrate that non-
     economic damage caps enacted by several states have not been 
     effective in reducing medical malpractice premiums in those 
     states as compared to states without caps. Weiss 
     underestimates the ``average'' claim costs for the two groups 
     of states by employing inappropriate analytical technique to 
     represent the burden on insurers. This is an error that is 
     readily obvious to those who work with medical malpractice 
     claims data, and it misleads the reader to an inappropriate 
     conclusion.


                        WHAT DID WEISS DO WRONG?

     Grouping the States
       Weiss has grouped 19 states as having caps on non-economic 
     damages, and 32 others (including the District of Columbia) 
     as not having caps. Unfortunately, states with effective 
     caps, such as California with a $250 thousand cap, are 
     considered the same as states having various levels of caps 
     up to and including $1 million. In fact, only 5 of the 19 
     states have a $250 thousand dollar cap similar to that being 
     proposed under current legislation. Eleven of the states have 
     caps of $500 thousand or greater. No attempt has been made to 
     evaluate the effectiveness of caps at various levels, they 
     have simply been lumped together. The American Academy of 
     Actuaries has testified that caps are a key element of tort 
     reform, and must be set at a level low enough, such as 
     $250,000, to have an effect. Any comparison chosen to 
     demonstrate the effectiveness of non-economic damage caps 
     should be sensitive to the level of caps in the various 
     states and to their individual effectiveness.
       In addition, as clearly shown on Appendix 1 of the Weiss 
     report, more than half of the states enacting non-economic 
     damage caps had not done so prior to the baseline date of 
     1991. Weiss compares premiums and claims costs for only two 
     years, 1991 and 2002. The caps enacted in 10 states were not 
     in place in 1991, and thus, these states should not be 
     included in the ``cap states'' category for this analysis. 
     Two other states had only adopted their caps in 1990, and the 
     beneficial effects of these laws may not have been recognized 
     in the data by 1991 due to constitutional challenge and 
     uncertainty about the ultimate effects of the caps.
     Measuring the Premiums
       Weiss uses the annual insurance rate surveys published by 
     Medical Liability Monitor (MLM) for three medical specialties 
     as the source of insurance premium data. He calculates median 
     average premiums by state and then calculates a median 
     premium for 1991 and 2002 for the two groups of states.
       For example, Alabama had two insurers listed in the 2002 
     study, each with a premium for the three specialties. Weiss 
     simply ranks the premiums from least to most, and then 
     selects the middle value (or mean average of the two middle 
     values when there is an even number of rates) as the median 
     average value, as shown below.

           MEDICAL LIABILITY MONITOR RATE SURVEY DATA ALABAMA
------------------------------------------------------------------------
            Insurer                  Specialty      1991 rate  2002 rate
------------------------------------------------------------------------
FPIC...........................  Internal Med.....        N/A     $6,043
ProAssurance...................  Internal Med.....     $5,008      6,806
FPIC...........................  Gen Surgery......        N/A     19,286
ProAssurance...................  Gen Surgery......     25,629     27,694
FPIC...........................  OB/GYN...........        N/A     36,506
ProAssurance...................  OB/GYN...........     45,368     38,873
Median.........................  .................     25,629  \1\ 23,49
                                                                      0
------------------------------------------------------------------------
\1\ Calculated as the mean average of $19,286 and $27,694.

       Alabama was selected for this discussion simply because it 
     is alphabetically the first state. However, these data 
     demonstrates many reasons why the use of the median is 
     improper:
       Data for different insurers are used for the two comparison 
     years.
       The median value is representative of only general surgery 
     rates because general surgery rates are always higher than 
     internal medicine and lower than OB/GYN.
       Because two carriers are represented in 2002 and only one 
     in 1991, the median value chosen by Weiss (the average of the 
     two general surgery rates) is actually lower than the 1991 
     rate. However, the actual general surgery rates for the only 
     carrier shown for both years increased--the opposite of 
     Weiss' result.
       The premiums shown are not adjusted for various discounts 
     or surcharges, and do not reflect any dividends which may 
     have been paid back to policyholders, thus reducing their 
     total outlay. Medical malpractice insurers paid substantial 
     dividends in the 1991 era, which had been largely reduced by 
     2002 due to industry losses.
       Using the product of this calculation to represent 
     insurance industry revenues is flawed for many additional 
     reasons. First, there is no certainty that any of the table 
     rates listed in MLM are actually charged. Carriers may have a 
     premium filed in a given state (or in multiple territories in 
     states), but may not write much business there. Weiss' 
     analysis gives no weight to the actual amount of insurance 
     sold by the various companies in any state, nor does it 
     reflect discounts or surcharges which are routinely applied 
     to standard premiums. In addition, many insurers pay 
     policyholder dividends, which in effect reduce the annual 
     premiums paid.
       MLM has objected to Weiss' misuse of its data. In a July 7, 
     2003 email to Senate Majority Leader Frist, MLM Editor 
     Barbara Dillard states ``We believe it is misleading to use 
     median annual premiums compiled with data from Medical 
     Liability Monitor to demonstrate the effect of non-economic 
     damage limits on liability rates.''
       The Weiss analysis only includes premium data for three 
     medical specialties, thus ignoring the experience for all of 
     the rest. Even more glaring is the fact that the MLM data 
     does not exist for seven of the capped states and five of the 
     non-capped states for 1991. But, this did not stop Weiss from 
     irresponsibly including these states in the analysis (see 
     Weiss's Appendix 1 and 2).
       An analysis using actual premiums as reported to the 
     National Association of Insurance Commissioners (not medians) 
     is helpful in evaluating differences between states having 
     effective damage caps throughout the period of Weiss' 
     analysis and those without. Such premiums include surcharges 
     and discounts which may have been applied to standard rates.
       The four states having a $250,000 cap prior to 1991 (CA, 
     CO, IN, KS) saw their total premiums increase by 28.0 percent 
     between 1991 and 2001 (2002 data not available yet). States 
     not having the $250,000 non-economic damage cap experienced a 
     collective 47.7 percent increase in premiums, over 70 percent 
     greater. See Appendix B for details. This wide gap in 
     premiums actually collected compares inversely to Weiss' 
     faulty conclusion that annual premiums in states with caps 
     increased by 48.2 percent as compared to 35.9 percent in 
     states without caps.
     Measuring Claim Costs
       In order to evaluate the difference in claim costs between 
     the two groups of states, Weiss analyzes median claim 
     payments by state for 1991 and 2002 as reported to the 
     National Practitioner Data Bank (NPDB). The NPDB provides the 
     only readily available source of medical malpractice 
     insurance indemnity payments by state. However, in order to 
     use these data effectively, one must understand the nature of 
     the claim payment values reported, and the shortcomings from 
     that which might be normally expected (see Appendix C for 
     a discussion of the NPDB claim payment data).
       The use of the median claim payment value greatly 
     compromises the accuracy of Weiss' analysis. While the median 
     (or middle value of the claim payment distribution) might be 
     an effective descriptor of what a plaintiff might receive as 
     payment (before paying almost half to his/her lawyer), it 
     cannot be used to measure the claim payment burden on 
     insurers. The use of total claim payments reported by state 
     shows a much larger differential result than Weiss' reported 
     payout increase of 83.3 percent for capped states as compared 
     to 127.9 percent for non-capped states.
       The increase in total claim payments for the four states 
     having a $250,000 non-economic damage cap during the period 
     of the Weiss analysis is 52.8 percent, compared to 100.1 
     percent for all other states--an 89.6 percent difference (See 
     Appendix D). Thus the experience in the capped states is 
     almost twice as good as that for states without effective 
     non-economic damage caps prior to 1991. Using his faulty 
     median calculation, Weiss would have us believe that the 
     difference is only 53.5 percent (127.9/83.3).
       The NPDB has gone on record opposing Mr. Weiss' 
     methodology, saying that ``Although the statistical median is 
     usually the best measure of the `average' malpractice payment 
     received by claimants, it does not show the `burden on 
     insurers.' The `burden on insurers' is the total amount of 
     dollars paid, not the `average' or median payment.'' (see 
     Appendix E for NPDB statement).
     Investment Performance
       In addition to inappropriate analysis of premium and claims 
     data, the Weiss report comments on the investment performance 
     of

[[Page S9238]]

     medical malpractice insurers. Being a long tail line of 
     insurance, medical malpractice insurers routinely utilize the 
     investment income generated by the premiums they collect and 
     hold for the payment of claims in the future. It is no secret 
     that bond yields have declined over the past decade, and are 
     now at historically low levels.
       In spite of the fact that medical malpractice insurers are 
     80 percent invested in bonds and have less than 10% invested 
     in the stock market, Weiss still concludes that stock market 
     losses are responsible for insurers' poor performance. While 
     the fall in interest rates has reduced the interest income 
     available to offset premiums, Weiss fails to mention that 
     when rates go down, bond values go up, and insurers have been 
     able to book capital gains to bolster their investment 
     income.
       The total return on investments for the industry has 
     remained fairly stable, and does not explain why rates are 
     rising. Rates are rising because of increasing claim costs.


                               CONCLUSION

       The Weiss report recommends that ``. . . legislators must 
     immediately put on hold all proposals involving non-economic 
     damage caps until convincing evidence can be produced to 
     demonstrate a true benefit to doctors in the form of reduced 
     med mal cost.'' This information exists, as reported herein 
     and by many other reputable sources, and now is the time for 
     the enactment of effective federal health care liability 
     reform.

 Appendix A--Reputable Sources Know That MICRA's Cap Reins in Premiums

       Congressional Budget Office--``CBO's analysis indicated 
     that certain tort limitations, primarily caps on awards and 
     rules governing offsets from collateral-source benefits, 
     effectively reduce average premiums for medical malpractice 
     insurance. Consequently, CBO estimates that, in states that 
     currently do not have controls on malpractice torts, H.R. 5 
     would significantly lower premiums for medical malpractice 
     insurance from what they would otherwise be under current 
     law. . . . premiums for medical malpractice insurance 
     ultimately would be an average of 25 percent to 30 percent 
     below what they would be under current law.''
       [CBO Cost Estimate of H.R. 5, the HEALTH Act, March 10, 
     2003.]
       U.S. Department of Health and Human Services--``States with 
     limits of $250,000 or $350,000 on non-economic damages have 
     average combined highest premium increases of 12-15 percent, 
     compared to 44 percent in states without caps on non-economic 
     damages.''
       [Confronting the New Health Care Crisis: Improving Health 
     Care Quality and Lowering Costs by Fixing Our Medical 
     Liability System, U.S. Department of Health and Human 
     Services, July 24, 2002]
       Joint Economic Committee of the United States Congress--
     ``Tort reforms would reduce overall spending on healthcare, 
     saving between $67 and $106 Billion over ten years.''
       [Florida] Governor's Select Task Force on Healthcare 
     Professional Liability Insurance (Report and recommendations 
     submitted January 29, 2003)--``The Task Force believes that a 
     cap on non-economic damages will bring relief to this current 
     crisis. Without the inclusion of a cap on potential awards of 
     non-economic damages in a legislative package, no legislative 
     reform plan can be successful in achieving the goal of 
     controlling increases in healthcare costs, and thereby 
     promoting improved access to healthcare. Although the Task 
     Force was offered other solutions, there is no other 
     alternative remedy that will immediately alleviate Florida's 
     crisis of availability and affordability of healthcare. The 
     evidence before the Task Force indicates that a cap of 
     $250,000 per incident will lead to significantly lower 
     malpractice premiums.''
       American Academy of Actuaries--``Before MICRA's adoption in 
     1975, California's percentage of loss payments was 
     significantly higher than its proportion of physicians. By 
     1981, California's loss payments had dropped and were about 
     even with its percentage of physicians. Since that date, 
     California has continued to benefit from MICRA: Costs 
     continue to drop as a percentage of the U.S. total, even as 
     the percentage of physicians remains stable. Although other 
     factors affect these . . . However, the California data show 
     that premiums declined as losses declined . . . Although 
     year-to-year fluctuations do occur, premiums have fallen in 
     proportion to the decline in losses.''
       [Federal Budget Savings Through Medical Liability Reform, 
     Physician Insurers Association of America)
       Tillinghast-Towers Perrin--``We would expect that a 
     $250,000 cap on non-economic damages will produce some 
     savings, perhaps in the 5 percent to 7 percent range for 
     physicians. If the number of large malpractice claims is 
     trending upward rapidly, a $250,000 non-economic cap may also 
     help to flatten out the rate of increase in the number of 
     claims.''
       [Letter to Mr. Ray Cantor from James Hurley Tillinghast-
     Towers Perrin, January 7, 2003]
       Milliman, USA--``California law prescribes a $250,00 cap on 
     non-economic damages and malpractice losses per physician are 
     much lower than the countrywide average (i.e., about 50 
     percent of the countrywide average from 1991 to 2000). Thus, 
     there appears to be clear evidence that a cap would be 
     effective in reducing the cost of medical malpractice 
     claims.''
       [Milliman USA, Florida Hospital Association, Medial 
     Malpractice Analysis, November 7, 2002]
       Standard & Poor's--``The U.S. medical malpractice industry 
     in 2003 is likely to face a continued rise in loss severity, 
     stemming from litigation, as it waits for meaningful tort 
     reform . . . If tort reform is unsuccessful, ultimately this 
     would affect the ability of doctors to continue practicing, 
     said Standard & Poor's credit analyst Alan Koerber. If 
     severity trends continue to escalate in the absence of 
     effective tort reform, we could arrive at a point where the 
     whole industry structure is in peril . . . In California--
     where the state has placed a cap on non-economic damages 
     (punitive damages, or awards for pain and suffering) at 
     $250,000--insurance rates have not shown the sharp increases 
     experienced in other states.''
       [Waiting for Tort Reform, U.S. Medical Malpractice Industry 
     Battles Loss Severity Strain, Standard & Poor's Ratings 
     Direct, June 6, 2003]

                               Appendix B

           STATES WITH CAPS OF $250,000 IN PLACE PRIOR TO 1991
------------------------------------------------------------------------
                                          91 Total   01 Total
                 State                    premium    premium    % change
------------------------------------------------------------------------
CA.....................................   $529,056   $644,598       21.8
CO.....................................     65,543     97,668       49.0
IN.....................................     34,174     58,693       71.7
KS.....................................     32,544     45,804       40.7
                                        ----------------------
    Total..............................    661,317    846,763       28.0
------------------------------------------------------------------------


         STATES WITHOUT CAPS OF $250,000 IN PLACE PRIOR TO 1991
------------------------------------------------------------------------
                                       91 Total     01 Total
               State                   premium      premium     % change
------------------------------------------------------------------------
AK.................................      $13,731      $13,226       -3.7
AL.................................       84,979      123,351       45.2
AZ.................................      107,812      135,597       25.8
AR.................................       23,135       39,727       71.7
CT.................................      103,224      120,543       16.8
DE.................................       20,068       17,215      -14.2
DC.................................       37,612       30,893      -17.9
FL.................................      241,421      604,014      150.2
GA.................................      134,604      200,600       49.0
HI.................................       16,066       30,092       87.3
ID.................................       14,837       21,840       47.2
IL.................................      289,811      399,142       37.7
IA.................................       44,120       58,831       33.3
KY.................................       58,212       81,826       40.6
LA.................................       50,850       82,000       61.3
MD.................................      107,893      155,433       44.1
MA.................................       31,127      182,898      487.6
MI.................................      169,347      177,045        4.5
MO.................................      112,915      119,300        5.7
MT.................................       16,613       17,348        4.4
ME.................................       28,883       27,055       -6.3
MN.................................       62,903       56,147      -10.7
MS.................................       22,132       44,522      101.2
NE.................................       17,972       22,359       24.4
NV.................................       25,250       57,293      126.9
NH.................................       10,253       19,296       88.2
NJ.................................      241,892      290,103       19.9
NM.................................       15,161       29,940       97.5
NY.................................      699,493      888,290       27.0
NC.................................       91,687      158,764       73.2
ND.................................       12,764       12,887        1.0
OH.................................      246,063      300,057       21.9
OK.................................       59,666       63,526        6.5
OR.................................       48,144       56,534       17.4
PA.................................      228,266      335,491       47.0
RI.................................        7,927       21,681      173.5
SC.................................        8,542       23,587      176.1
SD.................................        9,862       10,543        6.9
TN.................................      118,135      250,361      111.9
TX.................................      214,757      422,003       96.5
UT.................................       24,858       37,152       49.5
VA.................................       76,537      141,345       84.7
VT.................................       12,593        6,891      -45.3
WA.................................      104,323      134,009       28.5
WI.................................       74,812       64,060      -14.4
WV.................................       34,595       76,937      122.4
WY.................................        8,118       10,594       30.5
                                    --------------------------
    Total..........................    4,170,234    6,159,122       47.7
                                    --------------------------
    Total..........................    8,340,468   12,318,244       47.7
------------------------------------------------------------------------
Total premiums earned 1991-2001 PIAA.
NAIC 2002 data not yet available.

         Appendix C--General Comments About NPDB Payment Values

       The National Practitioner Data Bank (NPDB) was designed to 
     collect information on health care providers which would 
     allow credentialling entities to identify individuals who had 
     accumulated a ``bad track record'' and who may move to a new 
     geographic location to start anew. While some of the data 
     fields in the data base are useful, it was not designed as a 
     medical malpractice research data base. The data are not well 
     suited for measuring the actual payment values of verdicts or 
     settlements in a malpractice case, as described below.
       The Health Care Quality Improvement Act requires insurers 
     to report the first indemnity payment (check written) made on 
     behalf of any provider within 30 days of the date of payment. 
     It is this value which appears in the numeric field in the 
     NPDB data base, and which appears in the NPDB public use 
     file. This payment value must be analyzed in light of the 
     following:
       A. The data reported to the NPDB is on a provider (doctor) 
     basis, and represents payments made on behalf of only one 
     provider. The Data Bank has no way of linking payments made 
     on behalf of multiple individual providers to aggregate the 
     total amount of the settlement or jury award. Thus, the total 
     value of settlements or jury awards made for the plaintiff 
     against multiple providers cannot be determined.
       B. Insurers may make more than one indemnity payment on 
     behalf of a provider. Only the first payment is required to 
     be reported, and reporting entities are directed to explain 
     any anticipated future payments in a non-machinable paragraph 
     of description.
       C. In cases involving continuing care (such as long term 
     medication), the provider may

[[Page S9239]]

     have been insured by more than one primary insurance carrier, 
     each of which may have made a payment for any individual 
     claim.
       D. In cases where excess carriers or state-run compensation 
     funds make an excess payment (usually amounts over $1mil) in 
     addition to the primary insurer payment, two reports are sent 
     to the Data Bank, which then look like two smaller payments 
     for two separate claims instead of one larger payment.
       E. In many cases, insurers do not apportion payments made 
     on behalf of multiple defendants, such as in a case where 
     $300,000 is paid on behalf of three doctors. In this 
     instance, the Data Bank instructs the reporting entity to 
     file a report for each doctor, each of which will have 
     $300,000 in the payment field. There is a separate field 
     which should indicate that a payment was made on behalf of 
     three practitioners. For these data records, the $300,000 
     must be divided by 3 to get an accurate average payment 
     amount for each of the three data records.
       F. The Data Bank estimates that they are only getting 50% 
     compliance with reporting entities. They have done quite a 
     bit of work looking at insurers reports, and have uncovered 
     little non-compliance. Thus, the problem may lie in self-
     insured plans, etc., if the non-compliance does in fact 
     exist. In any event, the total amounts reported may not be 
     complete.

                               Appendix D

           STATES WITH CAPS OF $250,000 IN PLACE PRIOR TO 1991
------------------------------------------------------------------------
                                  91 Total        02 Total
            State                  payment         payment      % change
------------------------------------------------------------------------
CA...........................    $167,057,855    $245,695,565       47.1
CO...........................      12,766,034      47,346,789      270.9
IN...........................       9,403,230      12,381,153       31.7
KS...........................      24,557,394      21,153,550      -13.9
                              --------------------------------
    Total....................     213,784,513     326,577,057       52.8
------------------------------------------------------------------------


         STATES WITHOUT CAPS OF $250,000 IN PLACE PRIOR TO 1991
------------------------------------------------------------------------
                                  91 Total        02 Total
            State                  payment         payment      % change
------------------------------------------------------------------------
AK...........................      $2,976,192       5,036,632       69.2
AL...........................       9,662,216      32,632,538      237.7
AZ...........................      28,873,130      84,213,842      191.7
AR...........................       7,567,795      24,988,884      230.2
HI...........................       1,434,373      13,089,167      812.5
ID...........................       3,300,506       6,903,966      109.2
CT...........................      26,348,067      90,520,944      243.6
DE...........................       6,658,001      29,206,312      338.7
DC...........................      22,199,687      15,437,950      -30.5
FL...........................     129,236,245     311,539,387      141.1
GA...........................      40,712,086     116,301,797      185.7
IL...........................     179,429,302     266,647,177       48.6
IA...........................      15,868,786      28,037,027       76.7
KY...........................      12,752,049      49,043,250      284.6
LA...........................      23,507,975      46,669,001       98.5
MA...........................      59,139,301     104,680,958       77.0
MD...........................      30,065,789      85,903,788      185.7
ME...........................       6,090,688      15,946,958      161.8
MI...........................      85,142,892      92,333,909        8.4
MN...........................      18,600,625      24,181,892       30.0
MO...........................      65,472,456      61,868,283       -5.5
MS...........................       7,400,134      39,598,854      435.1
MT...........................       4,712,949      13,164,568      179.3
NE...........................       7,440,991      17,447,940      134.5
ND...........................       2,715,134       5,338,875       96.6
NM...........................      11,594,337      10,997,782       -5.1
NV...........................      11,616,548      38,994,264      235.7
NH...........................       6,284,067      16,745,000      166.5
NJ...........................     100,284,888     242,389,131      141.7
NY...........................     328,102,491     640,812,015       95.3
NC...........................      31,731,491      85,032,981      168.0
OH...........................      80,370,391     150,743,405       87.6
OK...........................      20,210,459      34,392,805       70.2
OR...........................      18,050,981      34,278,386       89.9
PA...........................     182,563,738     402,757,919      120.6
RI...........................      12,274,927      13,684,082       11.5
SC...........................       8,143,410      40,855,294      401.7
SD...........................       1,207,251       3,406,750      182.2
TN...........................      29,032,250      48,950,050       68.6
TX...........................     167,034,605     252,306,549       51.1
UT...........................       8,413,623      22,920,619      172.4
VA...........................      21,037,767      66,040,922      213.9
VT...........................       1,651,109       2,077,715       25.8
WA...........................      21,775,473      77,739,921      257.0
WI...........................      45,242,041      54,299,009       20.0
WV...........................      26,823,084      40,899,280       52.5
WY...........................       2,958,895       7,293,550      146.5
                              --------------------------------
    Total....................   1,930,735,003   3,863,314,696      100.1
------------------------------------------------------------------------
NPDB total payouts by PIAA state 1991-2002.

   Appendix E--Statement of the Division of Practitioner Data Banks, 
Health Resources and Services Administration, U.S. Department of Health 
 and Human Services, Concerning Use of Medians of Malpractice Payments 
  Reported to the National Practitioner Data Bank for Analysis of the 
          Impact of Caps on Malpractice Payments, July 2, 2003

       The Weiss Ratings, Inc. report ``Medical Malpractice Caps: 
     The Impact of Non-Economic Damage Caps on Physician Premiums, 
     Claims Payout Levels, and Availability of Coverage'' mentions 
     data from the National Practitioner Data Bank in its 
     discussion of the relationship between caps on medical 
     malpractice payments and medical malpractice insurance 
     premiums. The report states on page 7:
       Caps do reduce the burden on insurers--Using data provided 
     by the National Practitioner Data Bank, we compared the 
     median payouts in the 19 states with caps to those in the 32 
     states without caps for the period between 1991 and 2002, 
     with the following results:
       Payments reduced. In states without caps, the median payout 
     for the entire 12-year period was $116,297, ranging from 
     $75,000 on the low end to $220,000 on the high end. In states 
     with caps, the median was 15.7 percent lower, or $98,079, 
     ranging from $50,000 to $190,000. Since caps in many states 
     were not imposed until late in the 12-year period, this 
     represents a significant reduction.
       Growth in payouts slowed substantially. The median payout 
     in the 32 states without caps increased by 127.9 percent, 
     from $65,831 in 1991 to $150,000 in 2002. In contrast, 
     payouts in the 19 states with caps increased at a far slower 
     pace--by 83.3 percent, from $60,000 in 1991 to $110,000 in 
     2002.
       In short, it's clear that caps do accomplish their intended 
     purpose of lowering the average amount insurance companies 
     must pay out to satisfy med mal claims.
       Although the statistical median is usually the best measure 
     of the ``average'' malpractice payment received by claimants, 
     it does not show the ``burden on insurers.'' The ``burden on 
     insurers'' is the total amount of dollars paid, not the 
     ``average'' or median payment.
       Statistically, the median is the payment amount in the 
     middle of a rank-ordered list of all payments. Thus in a set 
     of 101 payments, 50 of which were for $1,000, 1 of which was 
     for $25,000, 49 of which were for $100,000, and 1 of which 
     was for $1,000,000, the median payment would be $25,000. 
     Arguing that the burden of payments on insurers is low 
     because the median payment is $25,000 is misleading. The 
     total amount paid cannot be determined through use of the 
     median. The burden on insurers would be better measured by 
     examining the total of all payments by insurers.

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