Insurance Trends and Information for Age Management Physicians: October 2018

For U.S. Doctors, Being Sued Is Common Ailment

Mar. 7, 2018 (Insurance Journal) — Getting sued is not an uncommon event for physicians. More than a third of physicians (34 percent) have had a claim filed against them at some point in their careers.

Also, according to research from the American Medical Association (AMA), older physicians who have been in practice for awhile and had more exposure are even more likely to be sued. Nearly half (49.2 percent) of physicians age 55 and over have been sued, compared to 8.2 percent of physicians under age 40.

The AMA recently released a series of trend reports on the medical liability system in its Policy Research Perspective.

“Information in this new research paints a bleak picture of physicians’ experiences with medical liability claims and the associated cost burdens on the health system,” said AMA President David O. Barbe, M.D., M.H.A. “The reports validate the fact that preserving quality and access in medicine, while reducing cost, requires fairness in the civil justice system.”

One report —Medical Liability Claim Frequency Among U.S. Physicians — analyzes medical liability claims frequency among patient care physicians in the U.S. and finds that getting sued is virtually a matter of when, not if, for physicians. In addition to finding that older physicians had a higher incidence of claims than younger ones, the report also found a wide variation in claim incidence by specialty. General surgeons and obstetricians/gynecologists (OB/GYN) were the physicians most likely to be sued, more than 3½ to 4 times greater than pediatricians and psychiatrists, who have the lowest risk. Before they reach the age of 55, more than 50 percent of general surgeons and obstetricians/gynecologists have already been sued.

“Even though the vast majority of claims are dropped, dismissed or withdrawn, the heavy cost associated with a litigious climate takes a significant financial toll on our health care system when the nation is working to reduce unnecessary health care costs,” Dr. Barbe said.

A second report —Medical Professional Liability Insurance Indemnity Payments, Expenses and Claim Disposition, 2006-2015 — analyzes indemnity payments, expenses, and claim disposition based on a sample of medical liability claims that closed between 2006 and 2015 aggregated by PIAA, the association representing the medical and health care professional liability insurance community. This report’s key findings include:

  • The average expense incurred on medical liability claims that closed in 2015 was $54,165 – a substantial increase of 64.5 percent since 2006.
  • In 2015, 68.2 percent of all closed claims were dropped, dismissed, or withdrawn; however, they are not cost-free. Each of these claims costs an average of $30,475 to defend, accounting for more than one-third (38.4 percent) of total expenses incurred.
  • Only 7 percent of claims are decided by a trial verdict, and the vast majority (87.5 percent) were won by the defendants.
  • In about 25 percent of claims, an indemnity payment was paid to the claimant. The average indemnity payment was $365,503 for claims that closed in 2015—a notable increase of 11.5 percent from two years prior.

Another report in the series — Medical Professional Liability Insurance Premiums: An Overview of the Market from 2008 to 2017— analyzes annual changes in medical liability insurance premiums for 2008-2017 from the Annual Rate Survey Issues of the Medical Liability Monitor.

Despite increasing stability in liability premiums, the prospects for this continuing into the near future are less than certain, according to this analysis. Since 2015, more premiums increased than decreased, reversing the trend of the earlier part of the study period. In 2017, 13.4 percent of premiums were higher than those for 2016. Since 2010, 12 to 17 percent of premiums have increased from the previous year.

According to the report, there is wide geographic variation in premiums for physicians. In some areas of New York, premiums for obstetricians/gynecologists reached $214,999 in 2017– while premiums for obstetricians/gynecologists in some areas of California were $49,804.

The AMA said it is pursuing medical liability reforms that try to meet the needs of patients who have been harmed and the need to keep medical care affordable.

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