Angela Intili, MD, an ob.gyn., was used to seeing her medical malpractice insurance premium rise slightly every couple of years. But she was shocked by the drastic rise she recently experienced.
In the last 2 years, Dr. Intili’s premiums shot from $60,000 to $130,000, she said.
“After 30 years of practice, this is the first time I’ve asked myself if I can even afford to continue practicing obstetrics and gynecology,” said Dr. Intili, 62, of Joliet, Ill. “It’s gotten very difficult to make ends meet as far as overhead because of the liability costs. I still love what I’m doing but I don’t know if I can afford to do it anymore.”
Even more frustrating for Dr. Intili was learning that claims in Illinois have sharply declined. From 2016 to 2020, tort filings in Illinois decreased by 43%, according to a state report.
“If claims are going down, I don’t understand why premium payments are going up,” she said.
Physicians across the country are experiencing a similar paradox. Claims are down, yet premiums are rising.
Medscape’s Malpractice Report 2021 found that 42% of primary care physicians were sued in 2020 through mid-2021, down from 52% in 2019. Fifty-six percent of specialists were sued in 2020 through mid-2021 compared with 62% in 2019, the report found. The pandemic was undoubtedly behind the decrease in suits, according to legal experts.
Yet, physicians paid higher premiums in 2021 and are on track for increases again in 2022, according to data and analysts.
According to Conning, direct premiums written for physicians increased 7.0% in 2021 (from $5.01 billion to $5.36 billion). Conning, an investment management firm that serves the insurance industry, analyzes annual financial reports filed by insurers to state insurance departments. The Medical Liability Monitor’s 2021 report found that premiums for internists, surgeons, and ob.gyns. in states without Patient Compensation Funds rose by an average of 2% in 2021.
The disparities raise questions about why physicians are paying higher premiums when having fewer claims is likely saving insurers’ money. Shouldn’t physicians’ rates reflect the reduction in claims?
Cases plummet during pandemic
During the pandemic, the volume of new medical malpractice claims dwindled to nearly nothing, said Michael Matray, editor of the Medical Liability Monitor, a national publication that analyzes medical liability insurance premiums.
“The court system closed for a while,” he said. “No elective procedures were being done in 2020 and the early parts of 2021. If you have no treatment, you have no malpractice, so of course, claims frequency tumbled down to a trickle.”
The number of large awards also decreased during the pandemic, noted Bill Burns, a director of insurance research at Conning.
“For claims that were already in the system, many of them could not be resolved because of the court closures, inability to take statements and depositions, etc.,” he said. “This resulted in a drop in verdicts.”
In 2021, there were 16 medical malpractice verdicts of $10 million or more in the United States, according to TransRe, an international reinsurance company that tracks large verdicts. In 2020, there were six verdicts of $10 million or more, TransRe research found. This is down from 52 verdicts of $10 million or more in 2019 and 46 verdicts of $10 million or more in 2018.
But although the pandemic lowered claims and decreased the number of payouts, one important aspect was untouched by the COVID era, said Richard E. Anderson, MD, chairman and CEO for The Doctors Company, a national medical liability insurer, and TDC Group.
“It’s a fair question: If claims are down, why are premiums continuing to go up?” Dr. Anderson said. “The answer is severity.”