Physicians today face mounting challenges in the practice of medicine, including declining reimbursement, workforce shortages, administrative burdens, and the ever-present risk of litigation. The Doctors Company’s latest study, “Nuclear Verdicts and Rising Costs: How Inflation Is Impacting Medical Malpractice Claims,” highlights another pressure point: the accelerating impact of inflation on medical malpractice claims.
The research study, conducted by Moore Actuarial Consulting, found that inflation—both economic and social—has added an estimated $4 billion in insured losses and expenses to the physician-focused malpractice market over the past decade. That figure represents eleven percent of booked losses for the decade ending in 2024 and is a $1.6 billion increase over the estimate in our 2023 study on social inflation’s impact for the decade ending in 2021.
Inflation is not only persistent, it is accelerating
Economic inflation reflects the rising price of goods and services as tracked by measures like the Consumer Price Index. Social inflation, by contrast, occurs when claim costs grow faster than economic inflation, often fueled by changing jury attitudes, plaintiff attorney tactics, or litigation financing.
In the 2000s and 2010s, economic inflation remained relatively low and steady. That changed dramatically in 2021 and 2022, when economic inflation spiked. The study methodology does not fully separate social and economic drivers, but the combined impact on malpractice claims is undeniable.
Drawing on both insurance company annual statement data and the National Practitioner Data Bank (NPDB), which tracks malpractice judgments nationwide, the research found that inflationary trends persisted, even after adjusting all figures to year-end 2024 dollars.
Large claims and nuclear verdicts are a growing concern
Large claims are becoming more frequent. The percentage of NPDB-reported claims exceeding $2 million began rising in 2014, dipped in 2020 and 2021, and then surged again in 2023. Overall, the number of claims above $2 million has increased more than tenfold since 1990.
Nuclear verdicts, those more than $10 million, are also increasing at a drastic rate. The average of the top fifty medical malpractice verdicts rose from $32 million in 2022 to $48 million in 2023 and reached an alarming $56 million in 2024. These nuclear verdicts not only influence the size of jury awards in other cases, but also drive up the value of all claims where a settlement is being considered.
Additional research supports these findings. Milliman analyzed medical professional liability claims from hospitals and care facilities and concluded that claim severity rose an average of five percent annually between 2014 and 2023, with claims above $5 million approximately tripling during that period.
Emerging drivers of social inflation
Third-party litigation financing—where private investors fund lawsuits in exchange for a portion of the settlement—is also emerging as a potential driver of social inflation, projected to cost insurers between $13 and $25 billion over the next five years. Malpractice verdicts are intended to make a patient whole, not to enrich attorneys or private investors. Insurers and physicians need to continue to advocate for meaningful tort reform and stand together against these escalating litigation costs that threaten access to care.
These findings are not just actuarial calculations; they directly affect physicians. Malpractice insurers must set premiums based on expectations of future claims. When inflation accelerates, insurers are forced to raise rates. That cycle threatens affordability and drives up health care costs across the board.
For individual physicians, the message is clear: Strong documentation, clear patient communication, and adherence to clinical protocols remain essential defenses against liability exposure. While systemic reforms are needed, preventive measures at the practice level can reduce the likelihood of becoming part of these inflationary statistics.
The road ahead
Historically, the physician-focused malpractice market has been more stable than commercial auto or general liability. But this new data confirms that inflationary pressures are reshaping even this traditionally steady sector. Regulators, legislators, and insurers must monitor and respond to these trends to preserve access to affordable coverage and ensure fairness in the liability system. As the nation’s largest physician-owned medical malpractice insurer, The Doctors Company remains committed to commissioning research that illuminates these risks. Our work goes beyond providing coverage, because we are guided by our mission to advance, protect, and reward the practice of good medicine. The $4 billion in losses we identified reflect more than numbers on a balance sheet. They represent the growing financial strain on physicians and the entire health care system. We will continue to advocate for meaningful tort reform and help safeguard access to care. By addressing these inflationary pressures, we can protect physicians, preserve coverage, and ensure patients continue to have access to timely, high-quality medical care.
Robert E. White, Jr. is president, The Doctors Company.
Founded and led by physicians, The Doctors Company is relentlessly committed to advancing, protecting, and rewarding the practice of good medicine. The Doctors Company helps hospitals and practices of all sizes manage the complexities of today’s healthcare environment—with expert guidance, resources, and coverage—and is the only medical malpractice insurer with an advocacy program covering all 50 states and the federal level. The Doctors Company is part of TDC Group, the nation’s largest physician-owned provider of insurance and risk management solutions. TDC Group serves the full continuum of care.
