Report Indicates U.S. Medical Malpractice Insurance Premiums Remain Stable

A recent report by Medical Liability Monitor (MLM) showed that medical liability insurance coverage premiums remain stable across most parts of the country, as costs dropped by an average of 1.1% for three specialties of medical practice that are traditionally strong indicators. The survey is conducted annually to interpret the true cost of medical malpractice premiums for providers. 

These findings are somewhat contrary to the state of the U.S. healthcare liability environment as described by many members of Congress who deem it to be in “crisis” mode. Legislators continue their efforts to enact tort reform such as seeking to impose federal limits (caps) on awards for noneconomic damages. Many lawmakers feel that such limits will reduce the number of medical providers believed to be practicing “defensive medicine” that drives up costs. 

Some of the current legislative initiatives under consideration include:

• Providing “safe harbor” defenses for physician who adhere to established standards
• Make any personal apologies or statements of regret by physicians inadmissible in court
• Maintain a 3-year statute of limitations in bringing malpractice suits
• Allow for payment (installment) plans for large awards of damages
• Allow courts discretion in the percentage received by attorneys

Many physicians have had their malpractice coverage premiums remain about the same, which may not be surprising with our current low levels of inflation. The medical specialties assessed in the study were general surgery, internal medicine, and OB-GYN. 

Paul Greve, a medical liability specialist who was involved in the MLM study, said that although exceptions exist, malpractice claims have remained flat. He attributes much of this to new patient-centric safety initiatives and widespread reforms by the states. The large hospital systems are more likely now to self-insure, which tends to reduce premiums. Large entities are employing more physicians who may have traditionally operated independently; therefore, the insurers are competing for a dwindling volume of independent physician practices.

Greve explained to Medscape News that insurance providers seem to have sufficient cash on-hand and may be more willing to offer policies are reduced rates. Many states have established what may be considered as patient “compensation funds”, designed to lower overall malpractice costs. These funds allow doctors to purchase an affordable liability policy and at the same time continuously pay into the state-managed fund, which allows them to maintain coverage at higher levels, such as between $1 and $3 million.

For the three types of practices (specialties) analyzed, the decreases in premiums were at or near 1%, which is not significant, yet still encouraging compared to prior years. The marketplace in the Midwest was the region that showed the highest increases, although they were just slightly over 2%. Greve forecasts that rates will remain stable, in part due to the decreasing volume of independently employed doctors. The key area of concern right now seemed to be the number of high-end awards and massive settlements. 14% of malpractice providers revealed that they are experiencing an increase in claims that are over $1 million.