“Rates today are similar to what they were 10 to 15 years ago,” Medical Liability Monitor’s Matray
By Bruce Japsen, Forbes, Contributor
Medical malpractice premiums are flat, and even falling in some cases, even as healthcare costs rise, particularly for Americans purchasing individual policies on exchanges under the Affordable Care Act.
Medical malpractice premiums remain flat as they have for years now, with rates “experiencing only a very slight (0.1%) cumulative decrease from last year across the industry,” according to the 2016 Medical Liability Monitor Annual Rate Survey.
“The stability of medical malpractice premium rates is a stark contrast to the tumult occurring in other segments of the U.S. healthcare delivery system as a result of the reforms spurred by the Affordable Care Act,” Michael Matray, editor of Medical Liability Monitor, said in a statement accompanying the survey. “A full three-quarters of the respondents to our survey reported no rate changes in the last year, and just under 80% of respondents said they believe the market is neither hardening nor softening.”
Still, it’s not cheap to insure a doctor against malpractice claims. For example, an obstetrician/gynecologist in Chicago paid a malpractice premium of $127,000 in 2016, which was the same as 2015 , according to rates the Doctors Company submitted to Medical Liability Monitor. Medical malpractice premiums for obstetricians aren’t as high in other parts of the country and can be as low as $30,000 to $60,000 but aren’t rising much, if at all. Elsewhere, internists in Georgia paid $10,000 to $14,000, and those rates were also largely flat from last year to this year.
Flat rates come as malpractice claims filed are at “historic lows and falling,” Matray said. He attributed some of this to tort reform efforts in various states as well as the “general shift in the attitudes of the jury pool” thanks in part to effective lobbying and advocacy of groups like the American Medical Association and PIAA, which represents professional liability insurers to change the public’s perspective on litigation.
Rates are also on a flat or downward trajectory due to consolidation of large health systems that own hospitals and, increasingly, doctor practices. As a larger entity, hospital systems have greater leverage and “self-insured retention,” authors of a report in the Medical Liability Monitor’s October rate survey issue say.
It’s unclear how Obamacare patients may impact future medical malpractice premiums. Since the patients tend to be sicker than the general population and have pent-up demand for medical care, there is a greater potential for a physician to misdiagnose, which could lead to an uptick in liability costs, Matray said.
But so far, that isn’t the case. The increasing use of electronic medical records should help reduce medical errors and improve healthcare delivery and the move to value-based care from fee-for-service medicine that has lead to more volume of care and unnecessary treatments could also improve the medical malpractice climate, analysts say.
“These things have a long tail,” Matray said. “I’d say it’s still way to early to know how the Affordable Care Act will effect medical malpractice.”