Medical malpractice costs continue to climb

The cost of defending a medical malpractice lawsuit continues to climb, as does the cost of liability insurance premiums for some specialties, according to two medical liability reform reports released in December by the American Medical Association (AMA).

The first report analyzes indemnity and expense payments, claim disposition, and policy limits based on a sample of medical liability claims that closed between 2001 and 2010 aggregated by the Physician Insurers Association of America. The report’s key findings:

The average expense of defending a physician against a medical liability claim in 2010 was $47,158-an increase of 62.7% since 2001.

In 2010, 63.7% of closed claims against physicians were dropped, withdrawn, or dismissed without any payment. Each of these claims costs an average of $26,851 to defend, accounting for more than one-third of the total annual defense expenses.

Of the claims that reached a jury verdict, 8% were in favor of the physician or other medical provider(s), and 0.6% were in favor of the plaintiff.

The average medical liability indemnity payment (money paid to a plaintiff) in 2010 was $331,947-an increase of 11.5% since 2001. The portion of medical liability insurance policies carried by physicians with limits exceeding $1 million has increased from 28% to 41% since 2001.

The second trend report analyzed medical liability insurance premiums from 2004 to 2011 gathered from the Annual Rate Survey issues of the Medical Liability Monitor. The report reviewed rates in eight states. Highlights:

Physicians continue to face high insurance costs to protect themselves against medical liability claims. Premiums in many states remain higher than they were during the height of the last medical liability crisis.

In some New York regions, premiums for obstetricians/gynecologists reached $206,913 in 2011-an increase of 4% since 2004, whereas premiums for general surgeons reached $128,542-an increase of 64% since 2004.

Premiums for internal medicine physicians have increased in New York since 2004, but premiums in the other seven states have either decreased or stabilized.

“Information in the new studies paints a bleak picture of the cost burden caused by excess litigation against physicians and bolsters the case for national and state level medical liability reforms,” AMA President Peter W. Carmel, MD, said in a statement. “We all pay the price for our broken medical liability system and the direct effect it has on the cost of medical care.”

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