The risks and challenges physicians will face in 2026

Being a physician means facing risks. Whether it’s through a malpractice claim or the various challenges of running a practice, managing risks are a daily challenge. Medical Economics spoke with Peter Reilly, North American Healthcare Practice Leader, HUB International, about what risks doctors need to be thinking about as 2026 unfolds, and how they can better protect themselves and their practice.

(Editor’s note: Transcript has been edited for brevity and clarity.)

Medical Economics: Physicians are facing Medicare and Medicaid cuts, payment delays from insurers, rising labor costs, and higher supply expenses. What’s driving these pressures, and do you see them easing in 2026?

Peter Reilly: Unfortunately, the short answer is no—I don’t see these challenges getting dramatically better in 2026. If there’s a bit of a silver lining, and I’m not sure whether this is optimism or realism, it’s that many of the pressures physicians are facing are baked into the uncertainty around how the U.S. health care market reimburses providers.

CMS has tried to introduce solutions, but the lack of consistency creates significant uncertainty. That uncertainty alone is destabilizing. As we sit here today, there are real concerns around ACA subsidies. I have a good friend who likes to say, “Math is math.” Eventually, this has to work itself out. We need to pay providers adequately if we want to maintain quality health care.

If there is a silver lining, it’s that the economics will eventually have to catch up with reality. But in the near term, it’s going to remain incredibly challenging because of that uncertainty. The labor shortage continues, and I think it’s fair for people to ask why they would want to work in this environment, where trust in health care providers is constantly being questioned. I find that astonishing.

Whether it’s vaccine effectiveness or other issues, the list just goes on. For most U.S. industries, we’re past COVID. I’m not sure health care has ever fully emerged from that hangover.

Medical Economics: Rural hospitals continue to struggle, even with government assistance. As we head into 2026, should physicians working in or with these facilities be concerned about their future?

Reilly: Sadly, I think the answer is yes, to a certain degree. Critical access hospitals and federally qualified health clinics continue to bear an unfair share of these economic challenges. Physicians and medical professionals working with these facilities need to at least ask the question about long-term viability.

On the flip side, these providers often deliver some of the very best bedside medicine. Rural health care is still delivered on a very personal, one-to-one basis in many cases. Politically, where power resides in Washington matters, and the winds around rural health care will influence how these economic challenges are addressed.

If there is not a response, the situation becomes particularly dire. Practitioners should work in lockstep with their hospitals and clinics, engaging local, state, and federal representatives to demand action. But I’m sorry to say this is a question they should be asking.

There are potential partnership solutions, but there’s no point in pretending the headwinds don’t exist.

Medical Economics: Burnout and disengagement remain persistent problems. Is there anything physician practice owners can do to reduce mental strain and improve retention of staff members?

Reilly: Historically, wellness plans were often misnamed and limited to employee assistance programs or other soft benefits. Today, there are far more tools available, and many of them have matured only in recent years.

Financial wellness programs, scheduling flexibility, and the use of technology all matter. You and I are having this conversation virtually, which is something that simply wasn’t as accessible before. Physicians can be more entrepreneurial in how they support staff.

Health care workers—from the person at the front desk to PAs and nurses—sometimes face hostile environments. Burnout isn’t just about long hours. It affects financial stability, family life, and emotional resilience. Extra time off when family needs arise and flexibility around schedules can make a meaningful difference.

These solutions aren’t always off-the-shelf, but they are available. With some digging, they can be very effective in maintaining loyalty among staff, which many physician practices value deeply.

Medical Economics: Medical professional liability is always top of mind for physicians. What’s happening in that market, and how might it affect rates in 2026?

Reilly: As the joke goes, let me start with the good news. There is still plenty of market competition. We’ve seen some announced consolidation, which I actually think will be good for the industry. It should create stronger Medical Practice Liability carriers that can compete nationally and across state lines.

Technology has improved underwriters’ understanding of virtual care and telehealth, and coverage restrictions around state lines have eased. That’s positive.

The bad news is that combined ratios for most MPL underwriters remain north of 100—often closer to 105—which means they’re losing money on underwriting. While some of that has been offset by investment returns, a major driver is social inflation.

A defense attorney friend of mine refers to “angry jury pools,” which are awarding outsized verdicts. That’s a real headwind. I don’t see MPL getting significantly cheaper.

That said, practices that take advantage of carrier-provided tools—especially data and AI-driven insights—can begin to bend the curve. Faster access to claims data allows for quicker action. We are seeing rate increases soften somewhat, and some responsible underwriters are performing well.

I would expect more meaningful competition among top-tier carriers, possibly in the second half of 2026, particularly those committed to serving physicians and surgeons.

Medical Economics: You’ve talked before about “nuclear verdicts.” Now we’re hearing the term “thermonuclear verdicts.” Are these becoming more common?

Reilly: Sadly, yes. Verdicts exceeding $10 million used to define a nuclear verdict. Those numbers are increasing. Thermonuclear verdicts—sometimes defined as $20 million to $40 million—are happening more frequently and in more geographic areas than ever before.

Even five to ten years ago, we didn’t see jury pools behaving this way. There’s a growing distrust in health care, and a mindset that punishment is necessary. There’s also the perception that it’s not the doctor paying—it’s the insurance company with deep pockets. But we all know physicians ultimately pay for that.

There has been some positive movement in a handful of states around reasonable tort reform. I’m not always a fan of tort reform, as it can overcorrect, but thoughtful reform is necessary. Without it, we risk creating primary care and general care deserts.

New Mexico is a clear example. It’s a wonderful place to live, but jury awards have become unsustainable. Physicians need to engage with their state associations and push for reform through letters and advocacy. That’s how change happens.

Cyberattacks continue to target health care organizations. How can physician practices manage not just their own risk, but also vendor-related risk?

Reilly: The vendor risk piece is often ignored or misunderstood. Some physicians believe that if records are in the cloud, they’re no longer responsible. That is simply wrong.

Physicians must understand the regulations in their jurisdiction regarding record ownership and responsibility. Assuming a vendor relieves you of duty can lead to a rude awakening after a breach.

Second, practices need strong privacy counsel to review vendor contracts. The goal is to include language that protects the physician practice if the vendor is responsible for a breach. Even if it’s not the physician’s fault, the obligation to protect records remains.

Cyber liability insurance has improved dramatically, and the tools that come with these policies are excellent. Physicians should actively use them. Carriers don’t want to pay claims either, and they provide robust resources to prevent losses.

Doing something—even small steps—is far better than doing nothing. Practices that lack resources after a cyber loss are still out there, and that’s avoidable.

Medical Economics: Larger health care organizations often have formal risk management plans. Should smaller medical practices consider this?

Reilly: Absolutely. That’s the easiest question you’ve asked me. The answer is yes.

Enterprise-wide risk management protects larger organizations because they actively think about what could go wrong. Hope is not a strategy.

Today, physician practices can generate a basic risk management plan using AI in minutes. You input details like location and size, and you get a strong starting draft. That’s far less expensive than the old model of on-site inspections and manual creation.

Insurance brokers and carriers can then supplement that plan with specifics—ingress and egress, patient handling, workers’ compensation, and more. Eighty to 85% of this material is already standardized.

Underwriters reward proactive mitigation. Premiums are impacted when practices demonstrate thoughtful planning. There’s also growing evidence that quality of care improves when risk management improves, which directly affects liability exposure.

Medical Economics: Do practices sometimes have blind spots when it comes to risk?

Reilly: Yes, and not because they aren’t thoughtful. Physician offices are designed as clinical operations. Risk beyond the clinical perspective isn’t something most physicians are trained to think about.

Office managers often become focused on accounting, which is important, but risk management stops there. We still hear, “I’m just a small business. Nothing bad will happen.”

A simple example is parking lots. For storefront medical offices—urgent care centers, dental offices—the parking lot is one of the biggest risks. Cars crash into buildings far more often than people realize. There are hundreds of these incidents every month in the U.S.

It’s not something you see every day, but when viewed at scale, it’s a real risk. And unfortunately, those incidents rarely end well.

Medical Economics: And if a car takes out part of a building, patient care stops.

Reilly: Exactly. Even if it happens at night, you can’t see patients, you can’t bill, and the problem snowballs. It’s a perfect example of a risk people don’t think about until it happens.

Medical Economics: What else should physicians be thinking about as they look further into 2026?

Reilly: Two major areas stand out. First, natural disasters. Floods in Western North Carolina, Tennessee, and the Pacific Northwest show how vulnerable facilities can be. Physicians need to plan for scenarios where they can’t reach their office or are treating patients during an emergency.

Second, financial planning for the business needs to happen more frequently. Political changes can alter revenue streams and services almost overnight. These reviews don’t need to be long, but they need to be regular.

We joke that we’re paid to be paranoid. Thinking through “what if” scenarios and having even a basic plan makes a huge difference. It allows physicians to practice medicine rather than constantly reacting to crises.