Malpractice premiums continue to inch down but wide disparities in total cost still linger across states.
Internists, general surgeons, and obstetrician-gynecologists experienced a respective 1% drop in their medical liability premiums last year, according to the 2017 Medical Liability Monitor Annual Rate Survey. The rate drop follows an ongoing trend of decreasing premiums over the last decade.
“The takeaways for doctors are really all good ones in that the rates remain very stable,” said Paul A. Greve Jr. senior vice president/senior consultant for Willis Towers Watson Health Care Practice and coauthor of the 2017 MLM Survey report. “The market for physician coverage remains very competitive because there are so many players involved for what is really a shrinking number of buyers, so the groups and individual physicians that are buying are seeing favorable pricing.”
Paul A. Greve Jr.
Premiums differed vastly across geographic area, consistent with previous years. Southern Florida internists for example, paid $47,707 for malpractice insurance last year, while their Minnesota colleagues paid $3,375. For ob.gyns., premiums ranged from $214,999 in southern New York to $16,240 in central California. General surgeons in Southern Florida paid $190,829 in 2016, while those in Wisconsin paid $10,868.
Overall, no states experienced a premium rate change in the double digits, and physicians in only five states – Hawaii, Kansas, Michigan, Montana, and Ohio – saw premium decreases of more than 5%. No states experienced rate increases of more than 5%.
Fewer claims filed by plaintiffs’ attorneys is one factor contributing to the continued stability of malpractice premiums, according to analysts. However, there are signs that high verdicts are on the rise, said Michael Matray, editor of the Medical Liability Monitor and chief content officer for Cunningham Group. Survey data show claims closing at greater than $1 million are increasing.
Michael Matray
“There is data that indicates claim severity has experienced a slight uptick,” Mr. Matray said in an interview. “It obviously hasn’t affected rates, yet. This could be due to the positive effect state-level tort reforms have had – where plaintiff attorneys are only bringing cases that are a slam dunk and carry a larger dollar value.”
Continued practice consolidation and the increase in employed physicians also helped keep premiums steady, Mr. Greve said in an interview. Consolidation means fewer buyers and a more competitive market, which helps keep premiums low and stable.
The jury is still out on how the move to value-based care might impact medical malpractice insurance payments. There is concern that the methods required to determine health care value could unwittingly increase malpractice risk, Mr. Matray said.
“To support value-based reimbursement models, a health care system must manage a vast network of public and private data used by various entities in order to monitor quality and cost,” Mr. Matray said. “The collection of that data requires using electronic health record technology that many physicians find onerous. This leads to physician burnout and dangerous EHR workarounds, such as copy-and-paste practices where previous EHR entries are cloned and inserted into a new progress note, as well as disabling or overriding burdensome safety alerts, to save time and increase efficiency. You can see how this would increase medical liability claim risk.”
The MLM survey is published yearly based on July 1 premium data from the major malpractice insurers and examines premium rates for mature, claims-made policies with $1 million/$3 million limits for internists, general surgeons, and ob.gyns.