- The price providers pay to insure themselves and their practices against medical liability claims is on the rise, according to an analysis from the American Medical Association.
- After holding mostly steady over the past decade, more than 30% of premiums reported by a survey of liability insurers increased from 2019 to 2020, the highest jump since 2005, the AMA analysis found.
- Between 2010 and 2018, the share of medical liability insurance premiums rising ranged from 12% to 17% across states and specialties. In 2019, 26.5% of premiums went up, and in 2020, 31.1% of premiums went up, the report found.
Doctors have long complained about the cost of insuring themselves against lawsuits, arguing those at risk of facing such claims often feel obligated to practice defensive medicine. Still, other studies have found the threat of liability does not greatly impact a patient’s care or treatment.
In 2018, a report from the National Bureau of Economic Research compared active-duty patients who were barred from suing military facilities for treatment they received, to dependents who can sue such facilities for malpractice. It also looked at both groups when they received care at civilian facilities.
When doctors are immune from liability claims, they order fewer tests and procedures, reducing inpatient spending by 5%, with "no measurable negative effect on patient outcomes," NBER found.
The AMA's latest report notes it takes time for medical liability insurers to boost premiums based on determinants and external factors, so the findings likely don’t account for the pandemic's full impact.
The analysis looked at an annual survey of professional liability insurers from the Medical Liability Monitor, and found fourteen states had premium increases of 10% or more in 2020.
It also found some providers face liability premiums of over $100,000 or even $200,000 a year, depending on geography and specialty.
In Kentucky, 29.6% of reported medical liability premiums increased by 10% or more in 2020, and in South Carolina, 27.8% of premiums rose by 10% or more, according to the findings.
Physicians in certain specialties are at greater risk of facing claims, particularly those in general surgery or obstetrics and gynecology. Among those specialties, 75% of providers aged 55 and older have faced a claim at some point. More than half have been sued before they turn 55, according to AMA.
But geography results in a more striking difference in the premiums they pay.
In 2020, physicians in obstetrics and gynecology in Los Angeles County in California faced medical liability premiums near $49,804. In Miami-Dade County in Florida, they faced premiums around $205,380, the report found.
Some states have caps on noneconomic damages for personal injury or wrongful death related to medical liability claims, leading to those variations, according to AMA.
About half of all U.S. states had some variation of noneconomic damage caps as of Jan. 2018, and six states had a cap on total damages. But the caps vary greatly by amounts, and only a handful of states are as strong as those in California and Texas, according to the report.