Med Mal Experience Rating

Michigan Medical Malpractice thinks Judge Posner made a mistake by stating that physicians are not subject to experience rating for medical malpractice.  I am not sure this is a real boo-boo.

My impression is that in many states there is not enough depth to the risk pools so that med mal carriers can really experience rate. While there are a number of lawsuits against physicians, there are not enough to differently rate physicians within specialties.  Think of the indicators needed to rate people for auto insurance.  Normally a previous accident is only one of 12-20 different potential rating characteristics.  Just because one has an accident does not necessarily mean that one is a bad driver. 

Frank Sloan (a health economist) wrote a paper in 1990 explaining why it might be a good idea to experience rate because historically it was not done.  It was still being discussed by academics as late as 2001. I found a press release for a Pennsylvania med mal carrier which was asking for legislation to implement an experience rating plan in 2003. Thus, I think that some companies might be trying to do it, it is (surprisingly!) not yet a universal practice.

via Walter Olson at Pointoflaw.com.