Soaring inflation contributes to $4 billion in healthcare providers' malpractice losses
A recent study conducted by Moore Actuarial Consulting for The Doctors Company has shed light on the growing impact of inflation on the medical malpractice system in the United States.
The study reveals a significant increase in cases with payouts above $2 million since 1990, with these cases more than tenfold in number. The trend has rebounded strongly after a brief drop during the pandemic. The average of the 50 largest malpractice verdicts reached an astounding $56 million in 2024, up from $32 million in 2022.
These rising costs are causing concern among healthcare professionals. The increasing costs of malpractice insurance may lead doctors to leave certain specialties, avoid high-risk procedures, or retire early. This could potentially affect the availability of doctors, increase wait times, or escalate costs for patients in some communities.
The Doctors Company, the largest physician-owned malpractice insurer in the U.S., has reported a $4 billion increase in insured losses and expenses over the past decade due to inflation. The company argues that the impact of inflation on malpractice insurance is larger and more persistent than many had realized.
The study also highlights the entry of outside investors into the field of medical malpractice. This development could add between $13 and $25 billion in costs to the insurance industry over the next five years due to third-party litigation funding.
Robert E. White, Jr., president of TDC Group, stated that doctors are facing rising premiums due to both economic pressures and the increase in large settlements. However, it's important to note that malpractice awards are intended to make patients whole, not to enrich attorneys or investors. Reforms are needed to keep healthcare accessible while ensuring fair compensation for those who have been harmed.
The study underscores the need for reforms in the medical malpractice system to ensure that healthcare remains accessible. The Doctors Company sees the findings as a call to action, promising to continue tracking the data, press for reforms, and work with doctors to manage risks.
In conclusion, the study serves as a reminder that inflation is reshaping various aspects of the healthcare system, including medical malpractice claims. It's not just affecting the price of food, housing, and energy but is also reshaping the legal and financial environment of healthcare. The balance between fairly compensating patients who have been harmed and creating a system that does not drive up costs so steeply is becoming increasingly difficult. The study calls for attention to these patterns as an important step toward change in the medical malpractice insurance landscape.
