There are few recent estimates on the likelihood of malpractice claims and the size of payments according to physician specialty. Using physician-level malpractice claims from a nationwide liability insurer, we found substantial variability across specialties in each of these descriptors of liability risk. Specialties in which the largest proportion of physicians faced a claim were not necessarily those with the highest average payment size. For example, physicians in obstetrics and general surgery — both fields that are regarded as high-risk specialties — were substantially more likely to face a claim than pediatricians and pathologists, yet the average payments among pediatricians and pathologists were considerably greater. The same pattern was noted in a national analysis that was performed more than two decades ago.15
For many high-risk specialties, our estimates of annual and career malpractice rates match self-reported claims rates reported in a recent AMA survey of physicians.14
For several low-risk specialties, however, our findings suggest that the proportion of physicians facing claims is consistently higher than that reported in the AMA survey. This finding suggests underreporting by physicians in low-risk specialties, perhaps because these physicians did not report a claim or because those with previous claims were less likely to respond to the survey. Such a trend could be because the stigma of a claim is worse in specialties in which such claims are less common or because recall bias is more severe for rare events.
Our study uncovered an important aspect of malpractice liability: the high likelihood of claims that do not result in payments to a plaintiff. Annual rates of claims leading to indemnity payments ranged from 1% to 5% across specialties, whereas rates of all claims ranged from 5% to 22%. Our projections suggest that nearly all physicians in high-risk specialties will face at least one claim during their career; however, a substantial minority will not have to make an indemnity payment.
Our results may speak to why physicians consistently report concern over malpractice and the intense pressure to practice defensive medicine,20
despite evidence that the scope of defensive medicine is modest.4,21,22
Concern among physicians over malpractice risk varies far less considerably across states than do objective measures of malpractice risk according to state (e.g., rates of paid claims, average payment sizes, malpractice premiums, and state tort reforms).1
For example, 65% of physicians practicing in states in the bottom third of rates for paid malpractice claims (5.5 paid claims per 1000 physicians) express substantial concern over malpractice, as compared with 67% of physicians in the top third (14.6 claims per 1000 physicians).1
Although these annual rates of paid claims are low, the annual and career risks of any malpractice claim are high, suggesting that the risk of being sued alone may create a tangible fear among physicians.
The perceived threat of malpractice among physicians may boil down to three factors: the risk of a claim, the probability of a claim leading to a payment, and the size of payment. Although the frequency and average size of paid claims may not fully explain perceptions among physicians,1
one may speculate that the large number of claims that do not lead to payment may shape perceived malpractice risk. Physicians can insure against indemnity payments through malpractice insurance, but they cannot insure against the indirect costs of litigation, such as time, stress, added work, and reputational damage.23
Although there is no evidence on the size of these indirect costs, direct costs are large. For example, a Harvard study of medical malpractice suggested that nearly 40% of claims were not associated with medical errors and that although a low percentage of such claims led to payment of compensation (28%, as compared with 73% of claims with documented medical errors), they accounted for 16% of total liability costs in the system.19
Our study has several limitations. As in a previous study,19
we used data from a single insurer, which may not be nationally representative, even though it is one of the largest in the United States and covers physicians in every state. Whether the claims rates in our study are representative of those nationwide depends on whether physicians who were covered by the insurer that we studied were more or less likely to be sued than physicians who were insured elsewhere. To assess the representativeness of the data, we compared our weighted estimates with the probability and size of indemnity claims reported by the National Practitioner Data Bank. The results are reassuring: the weighted number of indemnity claims per 1000 full-time, nonfederal physicians during the period from 1991 through 2005 was 17.1 in our sample, as compared with 19.6 in the federal database. The weighted average payment in our sample was $274,887 (in 2008 dollars), which is only 4.8% less than the average in the database. These small differences may reflect the fact that the mix of specialties in our sample may not be nationally representative.
Our estimates provide a glimpse into U.S. malpractice risk among physician specialties. High rates of malpractice claims that do not lead to indemnity payments, as well as a high cumulative career malpractice risk in both high-and low-risk specialties, may help to explain perceived malpractice risk among U.S. physicians.