A Descriptive Analysis of Medical Malpractice Insurance Premiums, 1974-1977

The rapid increase in medical malpractice insurance claims and concomitant increases in premiums in the early 1970's concerned the medical and government communities. In 1974 alone, there was a 195 percent increase in malpractice suits filed in State courts (Federal Medical Malpractice Insurance Act, 1975). Major efforts to understand the nature of the "crisis" and its potential solutions included a lengthy report issued in 1975 by the Department of Health, Education and Welfare Secretary's Commission on Medical Malpractice (1975) and Congressional hearings held in 1973 (Federal Malpractice Insurance Act, 1975). By 1977, premium rates and the number of malpractice claims filed seemed to have stabilized. Robert Helms of the American Enterprise Institute for Public Policy Analysis asserts that one source of the "cooling down" stems from malpractice cases being more often decided by a jury rather than a judge as was previously done. It appears that in close cases, juries are now more often deciding in favor of the defendant, thus providing fewer incentives for plaintiffs to sue (Rottenberg, 1978).