Medical Malpractice Insurance

Two little known facts of medical malpractice insurance:*

Payments (inflation adjusted) have been stable since the mid-1980s.
Insurance premiums (inflation adjusted dollars) increase or decrease based on the weakness of the economy because of losses experienced by the insurance industry's investments

What is medical liability insurance?

Physicians and other medical professionals pay insurance premiums to cover payments for awards resulting from lawsuits. They need liability insurance to practice medicine; in most cases hospitals, physician groups, as well as many state laws require it. In states such as Florida, some physicians are practicing without liability insurance (known as "going bare.") When insurance policies are discontinued, physicians must purchase "tail coverage" to cover claims or suits made after the policy is discontinued.

How much does medical liability insurance cost?

Insurance premiums for emergency physicians grew on average by more than 50 percent from 2002 to 2003 to $53,500 (AMA 2003), with some paying more than $100,000 annually. Other medical specialists, such as neurosurgeons and OB-GYNs pay $200,000 to $300,000 annually.

The cost of medical liability coverage varies by specialty and location. Physician specialists practicing emergency medicine, neurosurgery, orthopedics, obstetrics and gynecology have the highest premiums, because they perform procedures that have more risks of complications or because their patients have more serious illnesses or injuries.

Physicians who practice in medical groups or are employees of hospitals or managed-care programs are usually covered by the group's liability policy or as an employee benefit. Nearly half of all physicians work in physician groups, which negotiate for lower rates and broader coverage.

The lack of affordable liability insurance is threatening the ability of many physicians to practice medicine, potentially leaving patients without access to medical care.
Medical liability insurance premiums are skyrocketing, particularly in states that have not enacted tort reform. Many high-risk specialists, including emergency physicians, cannot obtain coverage at all.
Physicians are being forced to retire early, move to states with lower premiums, or stop performing certain procedures.
The crisis has resulted in the closure or downgrading of trauma centers and emergency departments across the United States, which means patients must travel further for medical care, which can be life threatening for severely ill or injured patients.
Physicians in states including Connecticut, Florida, Illinois, New Jersey, Pennsylvania, and West Virginia have protested and held rallies to generate attention from state policymakers.
The average jury award in medical malpractice cases has tripled to $3.5 million since 1994. All health care consumers end up paying the cost of these awards.

*Americans for Insurance Reform. Stable Losses, Unstable Rates. October 10, 2002

MEDICAL MALPRACTICE INSURANCE

Medical Malpractice Insurance

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