New AMA Studies Show Cost Burden of the Medical Liability System
For immediate release:
Dec. 21, 2011
CHICAGO -- The American Medical Association (AMA) today released two new trend reports in its Policy Research Perspective series illustrating the price Americans pay for the nation’s broken medical liability system.
“Information in the new studies paints a bleak picture of the cost burden caused by excess litigation against physicians and bolsters the case for national and state level medical liability reforms,” said AMA President Peter W. Carmel, M.D. “We all pay the price for our broken medical liability system and the direct effect it has on the cost of medical care.”
The first report analyzes indemnity and expense payments, claim disposition and policy limits based on a sample of medical liability claims that closed between 2001 and 2010 aggregated by the Physician Insurers Association of America. The report’s key findings include:
- The average expense of defending a physician against a medical liability claim in 2010 was $47,158 - an increase of 62.7 percent since 2001.
- In 2010, 63.7 percent of all closed claims against physicians were dropped, withdrawn or dismissed without any payment. Each of these claims costs an average of $26,851 to defend, accounting for more than one-third of the total annual defense expenses.
- The average medical liability indemnity payment to a claimant in 2010 was $331,947 - an increase of 11.5 percent since 2001.
- The share of medical liability insurance policies carried by physicians with limits exceeding $1 million have increased from 28 percent to 41 percent since 2001.
The second trend report analyzes medical liability insurance premiums from 2004-2011 gathered from the Annual Rate Survey Issues of the Medical Liability Monitor. Highlights in the report include:
- Physicians continue to face high costs of insuring themselves against medical liability claims. Premiums in many states remain higher than they were during the height of the last medical liability crisis.
- In some areas of New York, premiums for obstetricians/gynecologists reached $206,913 in 2011 - an increase of 41 percent since 2004, while premiums for general surgeons reached $128,542 - an increased by 64 percent since 2004.
- About 5 percent of premiums increased by 10 percent or more. This is the largest proportion of upward premium changes since 2007 when 8 percent of premiums increased by 10 percent or more.
The latest reports in the Policy Research Perspective series are available online to AMA members.
Editor’s Note: Credentialed members of the media can obtain a copy of the AMA’s newest additions to the Policy Research Perspective series by contacting AMA Media Relations.
Robert J. Mills
American Medical Association