In July, a Pennsylvania appellate court upheld a record $207.6 million verdict against the Hospital of the University of Pennsylvania, Philadelphia, for a birth injury that occurred during delivery.
Two months earlier, a jury awarded $70 million against Phoebe Putney Memorial Hospital in Albany, Georgia, for negligence by physicians that led to a patient’s double amputation.
While these awards may sound shocking, such “nuclear verdicts” against hospitals and physicians are becoming increasingly common, studies showed. Legal experts say rising inflation is behind the trend, and not just the economic kind.
“Social inflation is alive and well and remains a threat to rates in the medical professional liability line of business,” said Robert E. White, Jr, president of TDC Group and The Doctors Company, a national medical liability insurer for physicians.
Social inflation refers to the rising claim and legal costs due to societal factors, such as shifting attitudes toward corporate responsibility, declining public trust in large organizations, and changing perceptions on the value of money. Other contributors include third-party litigation funding and the influence of social media on public opinion and juror attitudes.
Both economic and social inflation are negatively affecting legal claims and costs for physicians and hospitals, according to new data from The Doctors Company. Between 2015 and 2024, the two types of inflation contributed to an estimated $4 billion in insured losses and expenses for physician-focused insurers, according to a 2025 study by the insurer. Social inflation occurs when an insurer’s average claim amount grows faster than the overall inflation rate.
For the analysis, The Doctors Company used data from the National Practitioner Data Bank (NPDB), a federal database that collects information about malpractice judgments. The NPDB’s database allows adjustment for economic inflation through 2024. Inflationary trends that remain after economic inflation is accounted for are evidence of social inflation, according to the study.
The frequency of medical malpractice claims filed by plaintiffs and their severity (the size of payouts) are steadily increasing, the report found. In 2023, the share of claims exceeding $2 million rose to 3.2%, up from 1.9% in 2013. The average claims payout in 2023 was $485,885, compared with $447,108 in 2013, according to the analysis.
These findings align with a July 2024 RAND Corporation report that analyzed social inflation trends. The report found that plaintiff wins in verdict cases increased from 53% to 64% between 2010 and 2019, and inflation-adjusted trial awards grew at a 7.6% compound annual rate during that period. Meanwhile, new tort case filings in state courts rose about 10% between 2012 and 2019. The increases are “suggestive of social inflation,” the authors wrote, though they noted the rises could be a combination of social inflation and “factors external to the civil justice system.”
For physicians, the impacts of rising social inflation are multifold, say legal experts. They face a higher risk of being sued, greater potential damages when cases are lost, and rising premiums.
“We are coming up on a time period where if something doesn’t change soon, rates will have to go up,” White said. “The long-term impacts are constraints on physician revenue.”
What’s Behind Social Inflation?
Varying factors are contributing to the rise in social inflation, said Jeff Segal MD, JD, founder and CEO of Medical Justice, a Greensboro, North Carolina-based company that helps physicians manage online reputations.
“On one hand, medicine has become more impersonal than it was a decade ago,” he said. “Many physicians are now employed and working in large healthcare organizations where they don’t have long-term relationships with patients.” Patient visits are shorter than they were 20 years ago, and patients get less facetime with doctors than they once did, he noted. At the same time, patient frustration about healthcare costs and access to care has grown, he said.
“People are less likely to sue doctors that they know and like and have a prior relationship with, which explains why surgeons often get sued more than primary care doctors,” he said. “It’s just the easier to pull the trigger, and just say, ‘Well, I’m not getting the answer that I need. I was injured. I’m going to sue. I don’t know these people.’”
Escalating tactics by plaintiffs’ attorneys that emotionally manipulate jurors are also part of the problem, White said. Plaintiffs’ attorneys have become more effective at making juries view providers and hospitals as dangerous after poor outcomes and in need of punitive consequences, he explained.
“They trigger the fight-or-flight instinct we all have by portraying the acts of a defendant as a danger to the community and wanting the jury to punish the defendant for what they did or didn’t do, to deter people in the community from acting in a similar manner,” he said. “That distorts the purpose of a trial. A trial is about making the injured party whole for their losses.”
Another variable of social inflation is views about the value of money, said Richard Henderson, senior vice president for TransRe, an international reinsurance company that tracks large verdicts. Society’s appreciation of money has changed, and people have become desensitized to large dollar amounts, he said.
“Part of that comes from salaries of athletes and entertainers,” he said. “All of a sudden, a billion dollars is not that much. It’s like, how much is money worth? That all plays in.”
Inflation Triggering Higher Settlements, Premiums
Data from TransRe underscores Henderson’s assessment. Between 2013 and 2015, there were 85 verdicts in the US for $10 million or more. Between 2022 and 2024, that number nearly doubled to 160. Verdicts of $25 million or more rose from 24 to 79 over the same periods.
The median value of large verdicts is also rising. As of August 2025, the median for verdicts of $5 million or greater was $16 million, up from $13 million in 2018.
“Our research shows a very steady increase in verdict amounts,” Henderson said. “It validates the assumption that when we’re losing claims, we’re losing them for more money.”
Massive verdicts have a direct correlation with the amounts that medical malpractice cases settle for out of court, noted White. Fear of large verdicts is driving doctors to request settlements more often and also forcing insurers to settle more cases than they otherwise would, for higher amounts, he said.
“These verdicts become the yardsticks by which all settlements are measured,” White said. “When a plaintiff writes a demand letter to an insurance company to try to settle a case, these big verdicts are used to justify the amount of money they’re asking for.”
With rising claims and growing payouts, insurance premiums are next on the hit list, according to legal analysts.
A recent American Medical Association (AMA) research brief showed that premium rates have climbed steadily since 2019. In 2024, 50% of insurers reported raising rates, up from 14% in 2018. The brief analyzed data from the Medical Liability Monitor, a publisher that conducts an annual survey of US medical liability insurers.
So far, the average nationwide premium increase has been modest — 2.5% between 2023 and 2024 — but the AMA warns that larger hikes may be coming.
“The increase in [premiums] has become more widespread — something that hasn’t happened since the last hard market in the early 2000s,” Allen Hardiman, PhD, AMA senior economist said in a statement.