Malpractice premiums: Soaring again

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Average rates for internists are up nearly 25 percent, with more increases likely for next year.


Malpractice premiums: Soaring again

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Average rates for internists are up nearly 25 percent, with more increases likely for next year.

By Berkeley Rice
Senior Editor


The malpractice mess just keeps getting worse. Some internists in Miami are paying $56,000 in professional liability premiums this year. And more rate hikes are on the way.

Average rates for internists nationwide jumped nearly 25 percent in the 12 months ending in July 2002, according to a recent comprehensive survey conducted by Medical Liability Monitor, a newsletter that covers the malpractice insurance industry. (The year before, rates rose an average 10 percent.) In some areas, rates are up nearly 100 percent.

Although the average premium for internists nationwide is just over $12,000, in big cities, rates run much higher: close to $46,000 in Detroit, $32,000 in Chicago, and in the low-20s in Cleveland, Las Vegas, and Los Angeles. Some suburban physicians are feeling the sting as well. Internists on Long Island, NY, pay more than $21,000—a higher tab than their peers in New York City.

But if the dollar amounts are staggering in big cities, the rate hikes may be most dramatic in some rural states: 99 percent in Mississippi, 90 percent in Arkansas, 50 percent in New Hampshire, and 36 percent in Tennessee. Internists in Texas' rural Rio Grande Valley are paying more than $26,000—more than some colleagues in Dallas and Houston.

What's causing the rise in premiums? Liability carriers have been hit by an increasing number of huge jury awards, rising reinsurance rates since 9/11, and declining returns on investment due to the stock market slump. As a result, a number of companies have left the malpractice market; others have scaled back their operations and are no longer writing out-of-state coverage. Many carriers have also become more selective, and are imposing stricter underwriting standards.

"Physicians who lost their insurers have had to scramble for replacement coverage," says Carol Brierly Golin, MLM editor. "And when they do find it, the prices are often much higher than their previous premiums." Insurers told MLM they believe prices will continue to climb into 2003.


Where internists pay the highest and lowest rates1

StateHighest rate reportedArea where rates are highest% increase from 2001Lowest rate reported% increase from 2001
Alabama$6,806Entire stateNo change$6,043No change
Alaska10,619Entire stateNo change6,948No change
Arizona12,782Entire state13%12,78213%
Arkansas7,189Entire state904,03140
California21,157Los Angeles area74,9198
Colorado9,845Entire state68,87615
Connecticut13,820Entire state407,40520
Delaware8,607Wilmington areaNo change4,204N.A.
Dist. of Columbia13,186Entire District1111,26026
Florida56,153Miami area4615,46051
Georgia10,392South Georgia184,712No change
Hawaii7,156Entire state57,1565
Idaho7,389Entire state183,4288
Illinois31,722Chicago139,038No change
Indiana5,598Chicago area513,15125
Iowa9,169Entire state294,374No change
Kansas6,082Entire state63,522No change
Kentucky8,320Louisville area47,235(–7)
Louisiana7,344New Orleans area156,38615
Maine6,672Entire state84,9819
Maryland11,083Baltimore area15,7401
Massachusetts9,356Entire state119,35611
Michigan45,761Detroit area1413,7088
Minnesota5,897Entire stateNo change3,8038
Mississippi8,264Entire state994,78610
Missouri11,572St. Louis & Kansas City areas177,655No change
Montana7,905Entire state37,016No change
Nebraska3,469Entire state92,78623
Nevada23,628Las Vegas area5010,600(–14)
New Hampshire8,316Entire state505,589N.A.
New Jersey13,620Entire state99,803No change
New Mexico7,802Entire state427,80242
New York21,648Long IslandNo change6,102No change
North Carolina8,454Entire state375,37850
North Dakota6,712Entire state15,42715
Ohio22,592Cleveland area609,3579
Oklahoma3,317Entire state43,3174
Oregon8,483Entire stateNo change3,8122
Pennsylvania10,993Philadelphia area406,04740
Rhode Island7,845Entire state97,243No change
South Carolina5,745Entire state405,74540
South Dakota5,395Entire state202,90615
Tennessee8,802Entire state365,04120
Texas26,334Rio Grande Valley310,18340
Utah10,569Entire state257,92035
Vermont5,472Entire state134,0877
Virginia10,228Washington, DC, area772,920No change
Washington9,779Entire state96,6664
West Virginia18,477Entire stateN.A.8,52710
Wisconsin5,993Entire stateNo change4,465N.A.
Wyoming14,832Entire state3814,83238

N.A.: not available.

1Except when otherwise noted, rates are for mature claims-made policies offered by various carriers for $1 million/$3 million coverage as of July 1, 2002. 2For $1 million/$4 million. 3Indiana rates are for $250,000/$750,000. Doctors pay a surcharge for $750,000/$1.25 million in coverage from the state's excess liability fund.4Kansas rates are for $200,000/$600,000. Doctors pay an 18 to 20% surcharge to a state fund for excess coverage. 5Louisiana rates are for $100,000/$400,000. Doctors pay a 57 to 65% surcharge to a state fund for excess coverage. 6Nebraska rates are for $200,000/$600,000. Doctors pay a 35% surcharge to a state fund for excess coverage. 7New Mexico rates are for $200,000/$600,000. Doctors pay an 87% surcharge to a state fund for excess coverage. 8Pennsylvania rates are for $500,000/$1.5 million. Doctors pay a 51 to 68% surcharge for $400,000/$1.2 million in excess coverage from a state fund. 9South Carolina rates are for $200,000/$600,000 in primary coverage, and include a $3,207 surcharge for unlimited occurrence coverage provided by the state. 10Wisconsin doctors pay a $1,500 to $9,000 surcharge to a state fund for excess coverage.

All figures are based on the 2002 Rate Survey published by Medical Liability Monitor. Rates do not reflect discounts, dividends, or other factors that may reduce or offset increases, nor do they include surcharges imposed due to recent claims or other underwriting factors. This chart lists rates only for companies that responded to MLM's survey. Copies of the full report are available from MLM by phone at 312-944-7900, by fax at 312-944-8845, or by e-mail at


Berkeley Rice. Malpractice premiums: Soaring again. Medical Economics Dec. 9, 2002;79:51.