Medical Malpractice is on the Rise – MPL Insurance Rates are Rising

It might sound strange to think of medical malpractice as a market, but it is – and it’s gaining size and value. Thanks to a rise in medical malpractice incidents, medical malpractice insurance rates are rising and doctors are paying more than ever before for this mandatory coverage.

Medical malpractice is a serious problem. People trust their lives to doctors, surgeons, and other specialists. When something goes wrong, the consequences can be devastating. Sometimes those consequences are fatal. Medical negligence can result in birth injuries, misdiagnosis, delayed treatment, brain and spinal cord injuries, and more.

Many injuries caused by medical malpractice are preventable, if only medical professionals had the incentive to be more diligent. You’d think the threat of a lawsuit would be enough of a deterrent, but it seems like lawsuits don’t have much of an impact.

Many medical malpractice lawsuits are settled out of court, which means those medical professionals are free to continue practicing even if they can’t be trusted. Without court intervention to take away their license or force them to change the way they practice, people’s lives remain in danger even after numerous lawsuits.

Thanks to recent court rulings, this actually might change. A potential influx of medical malpractice lawsuits might be the catalyst for real change, but not without some damage first.

There might be a massive influx of medical malpractice suits

For many years, many U.S. states have required medical malpractice lawsuits to be filed in the county where the malpractice took place. For example, this has been the law in Pennsylvania for the last 20 years. However, in August 2022, the state Supreme Court lifted this restriction to allow lawsuits to be filed anywhere within the state.

Why are medical malpractice lawsuits restricted by county?

The reason states restrict lawsuits to the county where the malpractice took place is to stop what the court calls “venue shopping,” which is when victims file their lawsuits in counties where juries have a reputation for being more sympathetic to plaintiffs and return large verdicts. When this is allowed, medical professionals say it encourages people to file junk lawsuits that only serve to make attorneys rich.

When Pennsylvania plaintiffs were allowed to choose the county in which to file their lawsuits, doctors complained that this was driving up medical malpractice insurance premiums and put many of them out of business.

Potential future problems

Since this ruling, it’s possible that other states might follow suit and restrictions could be lifted elsewhere, too. It’s almost certain that insurance premiums will rise, and they’re expected to rise up to 82%. With such high insurance premiums, many doctors will end up leaving their profession.

One of the biggest potential problems moving forward is that doctors in small towns will have to pay the same rates as doctors in big cities, and those small-town doctors don’t see as many patients, so many of them won’t have the funds to fight a lawsuit. One medical malpractice lawsuit could put them out of business.

While the initial surge in insurance premiums in the 1990s was halted 20 years ago in Pennsylvania, it could come back as plaintiffs start filing lawsuits in various counties searching for a more favorable outcome.

In the U.S., where healthcare is expensive and not covered by the state, lifting these lawsuit restrictions could turn out to be devastating to the entire healthcare system. Doctors quitting will put a strain on the healthcare system, but it could force U.S. lawmakers to start seriously considering other options, like universal healthcare that doesn’t require everyone to go into debt to pay for basic medical care.

The U.S. medical system is overdue for a change, but what’s next?

There’s no doubt that the medical system in the United States is overdue for change, but it’s hard to say if that change is on the horizon. In the 1960s and 1970s, there were so many medical malpractice lawsuits that the insurance premiums weren’t high enough to cover the payouts. The same is happening again today, and in 2019, more than 25% of medical professional liability (MPL) insurance premiums increased for the first time in more than twelve years. The average claim in the U.S. has risen by more than 50% in the last decade and there are now more payouts over $5 million than we’ve ever seen.

While the medical malpractice market thrives, the healthcare system is in trouble. However, it’s too soon to say what kind of impact, if any, the Pennsylvania ruling will have on how other states manage malpractice claims.