A new study on medical malpractice insurance shows that patient payments resulting from malpractice claims grew 4 percent annually from 1991 and 2003 (and only 1.6 percent per year since 2000). However, malpractice insurance premiums for internists, general surgeons, and obstetricians increased 20 to 25 percent in 2002. For example:

In Massachusetts, ProMutual Group, which covers about one-third of the state's doctors, raised rates an average of 11 percent last year, 20 percent in 2003, and 12.5 percent in 2002.

According to the lead researcher, Amitabh Chandra, assistant professor of economics at Dartmouth College, the increase in premiums cannot be explained by the increase in patient payments, which mirrors the increase in health care costs. Instead, he believes premium increases are related to declining investment income.

''The simple explanation that comes to mind is the underwriting cycle. If they're making less money from the investment side of things, it's going to cause [insurance companies] to raise rates," he told the Boston Globe.

The Insurance Journal notes that "96 percent of malpractice cases never go to trial and are settled out of court" and "[n]ews reports about very large jury verdicts can be misleading ... because the final award is often reduced substantially."

Nevertheless, the American Medical Association, which represents doctors, and the Physician Insurers Association of America, which represents malpractice insurers, are jointly lobbying for a national cap of $250,000 on malpractice claims. President Bush advocates a cap on noneconomic damages.

Reuters notes that the study examined 184,500 malpractice payments over a 12 year period. The data came from "the National Practitioner Data Bank, where all malpractice payments made on behalf on a physician must be reported."

Reuters also reports that "the nonprofit Kaiser Family Foundation published a study this month finding that adjusting for medical care inflation, the average annual increase in medical malpractice payments has been just 1.7 percent from 1991 to 2003."

It stands to reason that there is a relationship between malpractice payments and the overall cost of health care -- as costs go up, payments must follow since they reflect those costs.

Another study reported in the same issue of the journal claims causality between malpractice caps and growth in number of physicians in a state:

We found that there was an 83 percent increase in the median number of physicians per 100,000 residents from 1970 to 2000 in the states that never had a cap on malpractice awards before 2000. For the states that enacted caps in the 1970s, physician supply grew 86 percent, compared with 102 percent in states that passed caps between 1985 and 1987... we found that state caps on noneconomic damages awards in malpractice suits between 1985 and 2000 increased the supply of physicians.

Caution: correlation and causality are not the same beast.

States with some form of malpractice award cap: Alaska, California, Colorado, Florida, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, Virginia, West Virginia, and Wisconsin.