Physicians currently encounter significant obstacles in their medical practice, including dwindling reimbursement rates, workforce shortages, administrative challenges, and litigation risks. The Doctors Company’s latest research, “Nuclear Verdicts and Rising Costs: How Inflation Is Impacting Medical Malpractice Claims,” highlights another urgent concern: the growing effect of inflation on medical malpractice claims.

Performed by Moore Actuarial Consulting, the research indicates that both economic and social inflation has led to an estimated $4 billion in insured losses and costs affecting the physician-centric malpractice market over the last ten years. This figure accounts for eleven percent of the recorded losses for the decade concluding in 2024, reflecting a $1.6 billion rise compared to the 2023 study on the effects of social inflation.

Economic inflation pertains to the increase in prices of goods and services, while social inflation relates to the escalation of claim costs at a pace quicker than economic inflation. Recently, economic inflation has surged significantly, heavily influencing malpractice claims. Data from insurance companies along with the National Practitioner Data Bank, which assesses nationwide malpractice judgments, confirm ongoing inflationary patterns, adjusted to align with 2024 dollar values.

The occurrence of large claims is on the rise. The percentage of claims surpassing $2 million, as reported by the NPDB, has increased by more than ten times since 1990. Nuclear verdicts, which are those exceeding $10 million, have also seen sharp growth, with the average of the top fifty medical malpractice verdicts climbing from $32 million in 2022 to $56 million in 2024.

Third-party litigation funding, where private investors finance lawsuits in exchange for a portion of the settlement, is becoming a potential factor in social inflation, possibly costing insurers between $13 to $25 billion over five years. As medical malpractice insurers modify premiums according to projected future claims, the accelerated inflation compels higher rates, jeopardizing healthcare affordability.

Physicians need to implement preventive measures such as thorough documentation, effective patient communication, and adherence to protocols to reduce liability exposure, while systemic reforms are being sought. As inflationary pressures alter the malpractice landscape, stakeholders must collaborate to ensure accessible, fair liability insurance and uphold quality healthcare access.

With a long-standing devotion to promoting and safeguarding exemplary medical practices, The Doctors Company’s initiatives go beyond merely providing coverage; they firmly emphasize their commitment to research, advocacy for tort reform, and support for physicians across the nation—ensuring that patients receive prompt, high-quality care even amidst inflationary pressures.