The Impact of Defense Expenses in Medical Malpractice Claims

Abstract

Whenever health care reform is debated, the state of the medical professional liability (MPL) system (i.e., medical malpractice system) in the United States re-emerges as an issue of importance. What exactly is broken with the MPL system and what the implications are is a point of contention among different stakeholder groups. Recent data demonstrate that medical liability premiums have been improving in recent years and the majority of premiums remained flat in 2010. General agreement still exists, however, that medical professional liability insurance premiums have become unaffordable for many physicians, and coverage has become less available, especially for certain medical specialties and in specific areas of the country.Multiple factors go into the determination of medical professional liability insurance premiums including return on investments, reinsurance costs, claims frequency, average amount paid out on malpractice claims, defense expenses, and administrative costs such as underwriting expense.