What Drives Premium in Medical Malpractice Insurance? Claims!

April 12, 2018

Internal Medicine Physician Medical Malpractice Insurance (The Doctors’ Insurance Agency) Midlevel Providers’ Malpractice Insurance.The Doctors Insurance Agency represents more Internal Medicine Physicians and Nurse Practitioners than any other specialty:

Working with The Doctors’ Company, we have learned a lot about which specialties (and midlevel providers) are sued the most frequently. All of our information comes from the Insurance Journal and, The Doctors’ Company closed claims studies:

What drives premium in Medical Specialties?

  1. The number of claims per physician and
  2. The amount of expense to defend plus the settlements/judgments determines the premium.

The frequency of claims combined with the amount paid out to defend the claims drive premium for each specialty and location.

The interstate practice of medicine and telemedicine is beginning to blur the lines that have historically driven premium according to geography. Still the area of practice is a primary premium driver in underlying geography claims experience.

Nurse Practitioner Closed Claims Study

David B. Troxel, MD, Medical Director, Board of Governors; Darrell Ranum, JD, CPHRM, Vice President, Department of Patient Safety and Risk Management; Robin Diamond, JD, MSN, RN, Patient Safety and Risk Management Consultant; and Jacqueline Ross, PhD, RN, CPAN, Analysis and Coding Manager, Department of Patient Safety and Risk Management

The Doctors’ Company insures more physicians than any physician owned Medical Malpractice Insurance carrier; They have access to claims experience for all their 80,000 member physicians plus thousands of mid-level providers and facilities. The Doctors Company can translate the claims experience findings through careful study and analysis and then disseminate it in articles and online journals to teach important patient safety habits.

Nurse Practitioner are making up a growing and increasingly independent part of the healthcare industry, so The Doctors’ Company wanted to share claims data with all of their policyholders and partners (of which The Doctors’ Insurance Agency is a proud one)! Analyzing the collective experience of Nurse Practitioners and Physicians provides broader, more reliable information. Sharing patient safety tips and claims causes can encourage better collaboration and prompt meetings to improve system weaknesses.

Nurse Practitioner Professional Liability

Claims were studied over a six-year period from January 2011 through December 2016. The primary care specialties in which these claims arose were the typical FP and Internal Medicine Specialties. There were 1,358 claims that closed during that time period. Nurse practitioner or physician reviewers evaluated each claim to determine whether the standard of care was met. The factors that contributed to claims included clinical judgment, patient factors, communication, clinical systems, clinical environments, and documentation.

According to The Doctors’ Company studies:

Most Common Patient Allegations When Nurse Practitioners worked in these Family Practice and Internal Medicine practices , the three most common claim allegations against Nurse Practitioners accounted for 88 percent of their total claim allegations.

The diagnosis- and medication-related allegation percentages were similar for both Nurse Practitioners and primary care physicians, while medical treatment–related allegations were more common for primary care physicians.

**The Doctors’ Company Patient Safety/Risk Management Department

Older Physicians have higher incidence of claims:

According to the March 2018 edition of insurance journal older physicians have a higher incidence of claims than younger ones; although the report goes on to say that is largely a function of time …(not because they aren’t highly qualified…it appears to be just a numbers game…the longer you’re at it, the greater the likelihood of being named in a claim. It is not a matter of if but when physicians are included in a lawsuit.

General Surgeons and Obstetricians sued the most!

Which specialty is most commonly named: General Surgery and obstetricians are the most likely to be sued !

In fact they are named in claims 3 and a 1/2 to 4 times more often than peds and psychiatrists experiencing the lowest risk.

More than 50% of general surgeons and obstetrician have been sued already before they reached the age of 55.

In fact more than a 3rd of all doctors have had a claim filed against them. The nation and many healthcare institutions are working hard to reduce the cost and increase the access to health care…( the 3 objectives of the affordable care act.)

The majority of those claims are dismissed …which unfortunately, put upward pressure on an already pressured healthcare system. And even though the vast majority of claims are dropped or withdrawn they exact a heavy cost. The process of defending claims and especially unnecessary, non-meritorious claims, drag down the health care system.

Another report by the PIAA companies committee studying medical professional I ability insurance indemnity payments from 2006 to 2015 revealed the following:

The average expense incurred on claims closed in 2015 was $54,000 which was a 64% increase from 10 years prior.

For those claims that close in favor of the defendant physician: In 2015 the majority of those clams were dropped but the average to defend cost was $30,000. Only 7% of those claims are decided by jury verdict.

Because frequency and claims expenses are starting to rise…..After 10 years of price stability the medical liability monitor industry journal cites a study in 2017 that indicates that 13.4% of premiums were higher than those for 2016.

The Doctors Insurance Agency has the experience to help you find the right premium and the right company for your practice structure. There are wide geographic variation in premiums : and many markets with strengths and pricing expertise according to specialty, practice and state/county.