Impact of Healthcare Reform on Medical Malpractice Insurance

The impact of the Affordable Care Act (ACA) on the cost of medical malpractice insurance is still a puzzle. No hard data exists, and the facts that do exist are subject to political spin.

We do know that the Affordable Care Act (ACA) will lead to more people purchasing health insurance through government-run insurance exchanges. These people formerly did not carry health insurance. Within the next few years, it is estimated that more than 22 million people will have health insurance. The mere presence of more insured people will likely increase the number of medical malpractice claims.

Experts also predict the dilution of the doctor/patient relationship, as the model of one physician treating one patient through the various stages of care gives way to expanded-care teams and hospitalists with only surface relationships with patients. Under this new model, patients are not likely to be treated by a single family physician, with whom he has a relationship. Instead, he will move through a series of medical professionals as he goes from diagnosis, to treatment, to recovery. This model, of a team of professionals—doctors, nurses, physician assistants, hospitalists—makes up what is called Accountable Care Organization, or ACO. The ACO model is growing rapidly, as hospitals buy up small physician practices, making the doctors and nurses employees of the hospital, and blending them all into the ACO model.

The Accountable Care Organization model creates a new set of risks for the medical malpractice insurance companies. Patients gradually lose contact with the doctor because of the lack of continuity of care. As a result, he is more likely to sue because he is less emotionally and physically attached to his treating physician, thereby giving way to more medical malpractice claims.

As the number of private medical practices decreases, as hospitals buy up practices and take on their risk, medical malpractice insurance companies will compete heavily for the remaining private practice business. And malpractice companies that insure the deep-pocketed hospitals could face massive lawsuits similar to the ones faced in the asbestos lawsuits of the last couple of decades.

Other interesting trends are playing out concurrently, putting pressure on the already-strained medical malpractice system: Americans are aging and putting more pressure on the healthcare system, physicians are getting older and wanting to create a better work/life balance, and obesity is rising, leading to more cases of heart disease, diabetes, and joint ailments.

In addition, the Affordable Care Act does not address the issue of medical liability reform, which has proven to bring down the cost of medical malpractice insurance, not only in Florida, but nationwide. This is a glaring missed opportunity of the entire healthcare reform legislation, according to analysts.

Barbara Gracey Backer
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 (561) 404-5746 or at

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