Physicians paid about the same in liability insurance premiums in 2015 as in 2014, and analysts don’t see costs changing anytime soon. A nationwide survey of insurers by the Medical Liability Monitor shows that 71% of insurance premiums did not change this year, while 17% of rates rose and 12% fell.
Internists experienced an average premium increase of 0.6% in 2015, while general surgeons saw a 0.2% average rate decrease, and ob.gyns experienced an average 0.5% rate increase.
The static premium market is being largely driven by the low number of lawsuits filed by patients and family members in recent years, said survey coauthor Paul Greve Jr., executive vice president/senior consultant for the Willis Health Care Practice, a global risk management consultant firm.
“It’s amazing to see the continuing stability in claim frequency,” Mr. Greve said in an interview. “The claims counts are just not rising. Its great for the industry, and it’s great for physicians, but it is puzzling because you wonder what has caused what amounts to a sea change in the attitudes of the general public toward malpractice litigation such that the claim counts were drop off.”
Premiums continue to vary geographically. Southern Florida internists for example, will pay $47,707 for malpractice insurance this year, while their counterparts in Minnesota will pay $3,375. For ob.gyns., premiums range from $214,999 in southern New York to $16,240 in central California. General surgeons in Southern Florida will pay $190,829 this year, while Wisconsin surgeons will pay $10,868.
Various factors influence premium amounts, including the overall legal climate and the rate of insurer competition in each state, said Susan J. Forray, principal and consulting actuary with the Milwaukee office of Milliman, a global provider of actuarial services.
“The dollar amounts themselves are a function of the litigation environment [and] the cost level of medicine or living within the state,” Ms. Forray said in an interview. “In terms of rate changes, we are seeing certain environments where there is more competition. Obviously, those more competitive markets are more likely to have rate decreases or perhaps, stable rates, where perhaps markets with less competition are more likely to see increased rates.”
On a regional basis, Southern physicians experienced the largest rate increases, while doctors in the Northeast, West, and Midwest continued to see decreases. The Midwest’s 0.8% rate decrease was the largest decline, while Western states experienced a 0.2% average rate decrease. On average, the South showed a rate increase of 0.9% and the Northeast experienced a 0.1% average decrease. Doctors in Georgia, North Carolina, and Texas saw rate increases in excess of 5%, while Iowa physicians experienced an 11% rate decrease. Only three western states experienced rate increases: New Mexico at 2.5%, Oregon at 2%, and Idaho at 1%. Premium changes for Northeastern doctors fluctuated from Rhode Island’s 7% increase to Pennsylvania’s 8% decrease. Additionally, for the first time in 8 years, the premium market experienced an average overall increase of 0.3% in 2015, compared with an average overall decrease of 1.5% last year.
The jury is still out on how the Affordable Care Act and other health reforms will impact the malpractice premium market, according to Mr. Greve. He said that he believes the majority of upcoming health reforms will improve patient safety, thus reducing liability for doctors. However, as more physicians become part of larger networks to deliver new models of care, their contractual liability spreads, he said. However, as value-based care becomes the law of the land, new claims could arise.
“We’re just beginning to see the tip of the iceberg here,” Mr. Greve said. “In the past, it was overutilization, [the claim] that you did something in order to put money in your pocket. With putting providers at financial risk with capitated or bundled payments or global payments, then the argument is going to be, ‘You didn’t deliver enough care,’ or ‘You [used that device] because it was less expensive.’ ”
The MLM survey, published yearly in October, gathered July 1 premium data from the major malpractice insurers and examines rates for mature, claims-made policies with $1 million/$3 million limits for internists, general surgeons, and ob.gyns.