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Canadian Malpractice Insurance Takes Profit Out Of Coverage

Posted by Jane Akre
Tuesday, July 28, 2009 11:47 AM EST
Category: Major Medical
Tags: Insurance Industry, Medical Malpractice, Tort Reform


For Profit V. Nonprofit

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IMAGE SOURCE: iStockphoto / medical solutions / author: gmutlu

The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

Why the difference?

In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

Canadian Medical Protective Association

Here’s how it works.

Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

"We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

If a doctor is sued, the group pays the claim and provides legal counsel.

In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

"We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

But the importance of limiting jury awards may not play into the big picture on health care reform.

Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

Major Difference

In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

A bad outcome in itself is not the basis of a lawsuit.

The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #


2 Comments

Anonymous User
Posted by JMJ
Thursday, July 30, 2009 10:40 AM EST

You forget the major difference--non economic damages are very hard to win in canada. Tort reform never had to happen there, since it never got out of control.

Secondly, you fail to note many of biggest med mal insurers in the US are non-profit, because of their reciprocal nature.

Thirdly, even though you note that there are no contigency fees in canada, you fail to note that this means less lawsuits. After all, a huge chunk of med mal liability is defending frivolous lawsuits. Even if insurers win, they have to pay to defend. Plaintiffs don't. Hence, more lawsuits. In Canada, people only sue if there is provable medical negligence. In the U.S. often people sue if the negligence is debatable.

Fourthly, public citizen says frequency is at an all time low. Statistically, that means nothing. The severity of payments is at an all time high. Also, P.C. and other groups fail to defense costs (both legal and investigative) are out of control.

Fifthly, the 5% of all doctors statistic is misleading. Even if you take those 5% off the list, we can find another 5% who would take an abnormally high proportion of med mal costs. Another statistically meaningless statement.

Sincerely,

J.M.J.
Full disclosure: I grew up in Canada, now live in the U.S. and am working for a med mal insurer.

Posted by James Cool
Thursday, July 30, 2009 12:36 PM EST

JMJ:

Define frivolous please. I head this word used a lot by tort "reform" advocates but I never hear it defined. So we can have a fruitful discussion, please define "frivolous."

Comments for this article are closed.

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