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AMA reports show high cost of malpractice suits

The American Medical Association (AMA) last week released two new trend reports in its Policy Research Perspective series illustrating the high price doctors pay to protect themselves against malpractice suits.

“Information in the new studies paints a bleak picture of the cost burden caused by excess litigation against physicians and bolsters the case for national and state level medical liability reforms,” said AMA President Peter W. Carmel, MD, in a press release. “We all pay the price for our broken medical liability system and the direct effect it has on the cost of medical care.”

[See also: Defensive medicine adds billions to annual U.S. healthcare costs]

The first report analyzes indemnity and expense payments, claim disposition and policy limits based on a sample of medical liability claims that closed between 2001 and 2010 aggregated by the Physician Insurers Association of America.

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The report’s key findings include:

• The average expense of defending a physician against a medical liability claim in 2010 was $47,158 – an increase of 62.7 percent since 2001.
• In 2010, 63.7 percent of all closed claims against physicians were dropped, withdrawn or dismissed without any payment. Each of these claims costs an average of $26,851 to defend, accounting for more than one-third of the total annual defense expenses.
• The average medical liability indemnity payment to a claimant in 2010 was $331,947 – an increase of 11.5 percent since 2001.
• The share of medical liability insurance policies carried by physicians with limits exceeding $1 million have increased from 28 percent to 41 percent since 2001.

The second trend report analyzes medical liability insurance premiums from 2004-2011 gathered from the Annual Rate Survey Issues of the Medical Liability Monitor.

[See also: Malpractice payouts on parade]

Highlights in the report include:

• Physicians continue to face high costs of insuring themselves against medical liability claims. Premiums in many states remain higher than they were during the height of the last medical liability crisis.
• In some areas of New York, premiums for obstetricians/gynecologists reached $206,913 in 2011 – an increase of 41 percent since 2004, while premiums for general surgeons reached $128,542 – an increase of 64 percent since 2004.
• About 5 percent of premiums increased by 10 percent or more. This is the largest proportion of upward premium changes since 2007 when 8 percent of premiums increased by 10 percent or more.