This is an interesting question. Medical malpractice insurance (medical professional liability insurance) rates for physicians and surgeons have remained relatively stable over the past five years or so; however, for a variety of reasons, physician medical malpractice insurance rates are expected to rise over the next decade. These reasons include the consolidation of physician and surgeon medical practices; the rise in “super losses”; physicians and surgeons being employed by hospitals; increased demand for healthcare caused by aging population and requirements of the Affordable Care Act; and challenges to state tort reform laws.
- Fewer physicians in the work force. It is well known that physician practices are consolidating. Physicians and surgeons are gathering into larger groups to reduce costs, increase efficiencies, improve physician lifestyle, and comply with complex healthcare laws and regulations. This consolidation dilutes the physician/patient relationship.
- The rise of “super losses”: According to industry sources, large claims against physicians and surgeons are on the rise. And, what the company calls “super losses”, or those totaling more than $5 million, are increasing. These mega losses are now accounting for a larger percentage of claims submitted by physicians and surgeons. In the past decade, rates charged by defense counsel have increased significantly. According to one report, this is especially true for large firms where handling “bet the firm” litigation, defense costs can be $600 or more per hour.
- Hospitalists: In addition, as small, local hospitals and physician groups merge with faceless larger entities, patients have less hesitancy to sue than they had when they felt like they were suing their “friend”. The reduced supply of physicians in the marketplace will also put pressure on medical malpractice insurance rates.
- More patients: As baby boomers approach retirement, demand for medical care is expected to rise sharply, which will undoubtedly lead to an increase in medical malpractice insurance claims. The increase in the number of physicians in the next decade is likely to be much lower than the anticipated growth in the percentage of people over 65 over the same time frame. As a result, in some parts of the country, the physician population will struggle to meet demand. Patients, already irritated about office wait times, will have to wait even longer to see their physician, thereby potentially delaying diagnoses. Also, primary care physicians will be asked to perform more procedures and make more diagnoses in a day, thereby increasing the likelihood of being sued.
- Tort Reform: Another issue that could well lead to medical malpractice insurance rate increases for physicians and surgeons is the anticipated wave of legal challenges to established limitations on malpractice litigation, including caps on damages, shortened statutes of limitations for filing lawsuits, and caps on attorney fees—reforms which are largely credited for controlling the cost of medical malpractice insurance by reducing medical malpractice litigation.
Barbara Gracey Backer
Barbara Gracey Backer is the Vice-President of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Professional and Personal Insurance. She may be contacted at 800-272-6055 X118 or at firstname.lastname@example.org.