In a “special communication” published on October 30, 2014 in the online edition of The Journal of the American Medical Association, the authors reviewed recent trends in medical liability claims and costs in the United States that showed a “sharp reduction” in the rate of paid claims (from 18.6 paid claims per 1,000 physicians in 2002 to 9.9 paid claims per 1,000 physicians in 2013 – an estimated annual average decrease of 6.3% for medical doctors (MDs) and 5.3% for doctors of osteopathy (DOs)), and flat or declining levels of compensation payments and medical malpractice insurance costs over the last 7 to 10 years.
The authors reported that the median indemnity amount among paid medical malpractice claims increased by 63% (in 2013 adjusted dollars) between 1994, when the median indemnity payment was $133,799.00, and 2007, when the median indemnity payment was $218,400.00 – an average annual increase of 5% per year. Since 2007, the median indemnity amount has declined slightly, with an annual average decrease of 1.1% (the median indemnity amount in 2013 was $195,000.00). Jury verdicts represented only 3.4% of the indemnity payments made during the 20-year period.
The authors reported, “our analyses suggest large decreases in the rates of paid claims over the last decade. To the best of our knowledge, the proportion of claims that receives payment has not decreased substantially over time; hence, this trend probably extends to overall claims rates as well (that is, paid and unpaid claims together). Previous reports based on data on all lawsuits filed in selected states indicate that these filings decreased by approximately a third over the 2001-2010 period. Our analyses show that payment amounts have been unchanged in real terms for at least the last 7 years at both the middle and the upper end of the distribution.”
The authors also analyzed medical malpractice insurance premium trends in five markets in the United States (Colorado, Tennessee, and counties in New York, Illinois, and California) and found no large increases during the past ten years, with most locations showing flat or declining premiums. The authors opine that the medical malpractice insurance premiums in the five markets “likely reflect national patterns,” which is consistent with other data that show that a majority of medical malpractice liability insurers have held rates steady or have reduced rates since 2006.
The special communication concluded, “Despite the intuitive appeal of conventional tort reforms and advocates’ strong claims regarding their efficacy, the best available empirical evidence does not provide a strong basis for crediting these reforms with the relatively stable environment that has occurred over the past decade. Controlled studies encompassing all 50 states suggest that, on average, these approaches are associated with reductions in claims payment levels by 20% to 30% but have only a modest relationship with insurance premiums. Most studies evaluating the relationship of other traditional reforms with claim frequency, payouts, or insurance premiums have not demonstrated positive findings. In general, malpractice crises may relate as much to cycles in insurance markets as to changes in claims costs.”
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