Archives: October 2019

October 2019 Newsletter

Alarming rise in premiums highlighted in Medical Liability Monitor The annual Medical Liability Monitor rate survey highlighted a rate increase, not seen in over a decade, and shed light on how the future of liability rates could begin sounding industry alarms. The 2019 Medical Liability Monitor Annual Rate Survey, for the first time since 2006, found that more than 25 percent of medical professional liability (MPL) premium rates increased, while only five percent of rates went down. The overall rate increase year over year was approximately 0.8 percent. The uptick led analysts to study whether or not the conditions exist for a repeat of the cost crisis that occurred in the mid-2000s, with annual rate increases averaging between 10 and 30 percent. Notably, rate increases for general surgery were found to be greater than the average increases. Guest editors of the survey edition, Bill Burns and Alyssa Gittleman from the Insurance Research Department of the global investment management firm Conning, did a deeper dive into the results. According to a press release issued by the Medical Liability Monitor, Gittleman and Burns “compared current market conditions to those which preceded the last hard market. They note similarities between the two in…

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Physicians increasingly face “hybrid” medical liability claims

SOURCE: American Medical Association California physicians are increasingly facing “hybrid” lawsuits alleging professional negligence as well as medical battery from plaintiffs who want to avoid the state’s long-standing $250,000 limit on what juries can award for noneconomic damages in medical liability cases. A jury recently awarded $22,246 in economic damages and $9.25 million in past and future noneconomic damages to a plaintiff who tried this approach, with the court refusing to apply limits set in California’s Medical Injury Tort Compensation Reform Act (MICRA). The physician defendant is appealing the ruling and the Litigation Center of the American Medical Association and State Medical Societies joined with the California Medical Association and two other groups to file an amicus brief urging the appellate court to apply the law’s $250,000 cap. That should be done because the plaintiff’s claims were based on the same set of facts for a single act by a single surgeon—facts that wholly fit within MICRA’s “professional negligence” definition. The brief filed in the Court of Appeal of the State of California, 4th Appellate District, Division Two, cites more than a dozen published appellate decisions where plaintiffs pursued hybrid claims, noting many unpublished decisions as well. “The result, when…

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Large med mal verdicts drive hospital liability up: Report

SOURCE: BUSINESS INSURANCE Self-insured hospital professional liability claims remain stable overall, but the frequency and severity of large excess claims continues to increase amid a rising number of large medical malpractice verdicts, according to a new report. The number of hospital professional liability claims experienced by health care organizations at the $2 million occurrence level is expected to remain flat, while claim severity, including defense costs, is growing at a 2% annual rate, according to a report released Tuesday by Aon PLC and the American Society for Health Care Risk Management. However, the frequency and average severity of losses greater than $5 million continue to increase, the report said. “After an increasing number of large medical malpractice verdicts following years of premium decreases, all stakeholders in malpractice liability are under pressure,” the report said. As a result, premium rates and self-insured retentions are increasing, and medical malpractice insurers are reducing capacity or even exiting the market, the report found. The average indemnity paid for claims over $5 million is $10 million now, compared with $8.6 million a few years ago, the Aon database reveals. Beazley PLC’s database of medical malpractice claims also shows the average cost of a paid claim…

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Medical Liability Monitor’s 2019 Annual Rate Survey Indicates a Medical Malpractice Insurance Premiums Rising, But Are We Headed for a Real Hard Market?

SOURCE: CISION According to just-released data from the 2019 Medical Liability Monitor Annual Rate Survey, for the first time since 2006, more than 25 percent of medical professional liability (MPL) premium rates increased, while for a second consecutive year, only 5 percent of rates decreased. These firming rates indicate a turn from the market’s decade-plus period of soft pricing, but is it headed for a real hard market — with annual rate increases averaging between 10 and 30 percent — similar to the last one, which started as a low simmer in 1998, heated up in 1999 and boiled from 2000 to 2006? To answer this question, Annual Rate Survey guest editors Bill Burns and Alyssa Gittleman from the Insurance Research Department of the global investment management firm Conning compare current market conditions to those which preceded the last hard market. They note similarities between the two in the MPL industry’s operating ratio, return on equity, declining loss reserve margins, use of schedule credits and declining competition, but also observe significant differences in policyholder surplus, exposures and ceded reinsurance. What do the Rates Say? From 2007 to 2018, the results of the Annual Rate Survey had a certain familiarity —…

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