Malpractice premiums relatively stable--for now

Most U.S. physicians--67 percent--paid the same amount for malpractice insurance in 2010 as they did in 2009, according to the annual Medical Liability Monitor survey. While the American Medical Association (AMA) asserts that this represents the largest percentage of flat premiums in recent years, American Medical News also notes that a whopping 14.1 percent of premiums rose in 2010 compared with 6 percent in 2009.

Part of the dramatic swing can be attributed to medical liability reform, or lack thereof, in certain states. For example, in Texas, which implemented tort reforms in 2003, internists paid about $15,000 for malpractice insurance in 2010. Meanwhile, the Illinois Supreme Court's ruling against the state's noneconomic damage cap of $500,000 for physicians and $1 million for hospitals cost internists roughly $30,000 in malpractice premiums, while general surgeons in Illinois paid close to $90,000 and most ob-gyns spent more than $100,000.

Regionally, the Northeast saw an average rise of 1.06 percent in premiums, while the West dropped by 1.45 percent. The Midwest saw a 0.12 percent average increase, and rates in the South fell by 1.38 percent.

Despite the overall stabilization of premiums, legal costs related to malpractice continued to surge.

According to an AMA analysis of claims data from the Physician Insurers Association of America (PIAA), physicians in 2009 paid a median $200,000 in awards and settlements to resolve medical liability lawsuits--a rise of 7.4 percent since 2000, after adjusting for inflation. The average bill for defense costs was $47,937 in 2009, according to the AMA report.

For now, the rising claim severity and ensuing defense fees are being offset by a decrease in frequency of claims filed, said Lawrence E. Smarr, president and CEO of PIAA. But if frequency begins to increase, as some suspect will happen due to the sheer volume of new patients physicians will treat under health reform, Smarr said there's no telling how severely premiums will be affected.

To learn more:
- read the article in American Medical News

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