Equity and accuracy in medical malpractice insurance pricing.
Abstract
This study examines alternative classification approaches for setting medical malpractice
insurance premiums. Insurers generally form risk classification categories on factors
other than the physician's own loss experience. Our analysis of such classification
approaches indicates different but no more categories than now used. An actuarially-fair
premium-setting scheme based on the frequency and severity of the individual physician's
losses would substantially penalize adverse experience. Alternatively, premiums could
be set for groups of physicians, such as hospital medical staffs. Our simulations
suggest that even staffs at rather small hospitals may be large enough to be experience-rated.
Type
Journal articleSubject
Actuarial AnalysisFees and Charges
Florida
Insurance, Liability
Malpractice
Medical Staff, Hospital
Medicine
Models, Statistical
Physicians
Rate Setting and Review
Risk
Specialization
United States
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https://hdl.handle.net/10161/1947Collections
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Show full item recordScholars@Duke
Frank A. Sloan
J. Alexander McMahon Distinguished Professor Emeritus of Health Policy and Management
Professor Sloan is interested in studying the subjects of health policy and the economics
of aging, hospitals, health, pharmaceuticals, and substance abuse. He has received
funding from numerous research grants that he earned for studies of which he was the
principal investigator. His most recent grants were awarded by the Robert Wood Johnson
Foundation, the Center for Disease Control, the Pew Charitable Trust, and the National
Institute on Aging. Titles of his projects include, “Why Mature S

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