Question: How much does medical malpractice insurance cost?
From: Adam W. of Geneva, IL

Answer: Most healthcare providers carry liability insurance. Most states require that physicians have malpractice insurance and most hospitals require it if a physician wants hospital privileges. Physicians may purchase medical malpractice insurance individually or through a group practice. Hospitals and other healthcare facilities also purchase their own malpractice insurance. Hospitals that employ physicians usually buy coverage for the hospital and the staff. Interestingly, physicians employed by the federal government don’t buy insurance as the lawsuit will be brought against the federal government.

There are differing points of view as to whether medical malpractice lawsuits are causing escalating malpractice insurance rates. Most articles indicate that the cost of insurance started rising at the start of this decade after a somewhat calm period. They attribute this to the growing size of claims and the decreasing number of insurance companies providing medical malpractice insurance due to falling profits. In March, 2008, the Insurance Information Institute published medical malpractice data: in 2003, medical practice cost was estimated at $26.5 billion; in 2004, that number rose to greater than $28.7 billion. The annual amount that a physician pays depends on the locality of the practice and the specialty. States regulate the industry and some states have put caps on claims in an effort to control the cost. But there are indirect costs associated with medical malpractice. You may have heard the term “defensive medicine” wherein physicians provide more healthcare coverage than normal. There are no reliable estimates on this cost.