What The Numbers Really Mean

American Medical News (Jan 9, 2012) reported in a short item that the average cost of defending a medical malpractice claim (all specialties, nationwide) rose 63% between 2001 and 2010 to over $47,000.

This highlights an important but often overlooked point about medical malpractice insurance.

Psychiatry is a low-risk specialty in the two key measures that actuaries use to assess risk – frequency of suit, and severity of suit.  Frequency measures how often the average practitioner is involved in a claim. Severity measures how large the damages are on average in claims that result in a verdict against the doctor or a settlement.

So what’s the often overlooked point? Simply this – regardless of what happens to a claim against the doctor, it requires the involvement of a defense lawyer to represent the doctor’s interests in the process.  For example, when a claim is reported to us, we do not tell you to hire your own attorney.  We contact one of our program’s seasoned lawyers in the doctor’s area who is experienced in handling psychiatric malpractice cases . Then, that lawyer:

• Meets with the doctor,
• Reviews the records,
• Explains the legal process to the doctor,
• Drafts a response to the complaint,
• Files the response with the court and opposing counsel,
• Answers interrogatories (formal requests for information) served on the doctor,
• Drafts interrogatories to be served on the plaintiff,
• Interviews other witnesses,
• Schedules depositions,
• Attends depositions with the doctor,
• Prepares a litigation plan, etc., etc.

Even a “frivolous” suit can generate a legal bill of tens of thousands dollars before it is dismissed.

Coverage for legal costs and ready access to specialized counsel is the main reason you buy professional liability insurance. You’ll probably practice for many years without ever being sued successfully, but the defense of a single claim, or even the possibility of a claim, will likely generate legal costs far greater than several years’ worth of professional liability premiums.