Why malpractice lawsuits are rarer but more expensive than ever [PODCAST]

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Doctors are sued far less often than they were 25 years ago, but the average malpractice payout has never been higher. Robert E. White, Jr., president of The Doctors Company, has spent 58 years in malpractice insurance. This episode is based on his article “Why medical malpractice claims cost more than ever,” published on KevinMD. You’ll hear why he thinks tort reform and a patient safety push that began in 1999 drove lawsuits down. He explains how nuclear verdicts of $10 million or more raise the average settlement, even though they get settled for less. You’ll also learn why insurers now pay on more of the claims that are filed, keeping pressure on premiums. He warns that obstetricians and other high-risk specialists may drop parts of their practice if premiums climb, leaving patients without care. He asks physicians to answer the call when organized medicine pushes for reform. Hear what patients say when asked why they sued, and why more time with them could head off many cases.

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today we welcome back Robert White. He’s the president of The Doctors Company, a longtime partner of KevinMD. Today’s KevinMD article is “Why medical malpractice claims cost more than ever.” Robert, welcome back to the show.

Robert E. White: It’s a pleasure to be here again, Kevin.

Kevin Pho: All right, so before talking about the article itself, what led you to write it in the first place?

Robert E. White: Well, I’ve been in the business of medical professional liability insurance for a long time, fifty-eight years, and I enjoy reading surveys that other organizations produce about physician attitudes and physician experience. I also enjoy trying to sync that up with my own knowledge and observations, particularly of litigation involving physicians. Earlier this year, there were a couple of surveys that talked about how frequently physicians were sued during their careers, and about the differences in the frequency they were reporting in those surveys when it was broken down by age. I thought we had something important to contribute to that conversation.

So we wrote the article to point out that physicians’ reported experience of being sued is going to vary widely if the physician has been in practice for more than twenty-five years. Twenty-five years ago, the medical professional liability industry was a different world in terms of how often physicians got sued. In fact, in those days, we used to tell doctors, “It’s not if you’re going to be sued; it’s when you’re going to be sued.” From, say, 1990 through about 2005, on average, 17 percent of physicians would be sued in any given year.

That is a very different world compared to where we are today. In fact, claims frequency in 2025 was a lot like it was in 1975, when one out of 20 physicians might expect to get sued. In other words, 4.6 out of 100 practicing physicians could expect to have been sued in 2025. So if you’re a young doctor in practice, you could go through your whole career and never get sued, if frequency stays where it sits today. Somebody practicing 25 years ago, if the universe of malpractice claims fell evenly over the population of physicians, would probably just be ending one lawsuit when the next one was coming through the door.

So it’s very different, and in my mind, it has its genesis in some things that occurred back in 1999. We hate to talk about it, but there was that report by a committee of the Institute of Medicine called “To Err Is Human.” As debatable as its findings and its methodology were, it predicted that upwards of 98,000 people could die each year as a result of a mistake made in a hospital, and it really focused medicine on the issue of patient safety. Even though you could argue it wasn’t a good study in the way it was carried out, and the findings were at least debatable, it refocused health care on the fact that we have good people practicing in a system that might have been broken. Patients were falling through the cracks, and we needed to find ways of sealing up those cracks so that patients got better outcomes.

At the same time, there was the frequency of suits. Going back into the ’90s, there were years when more than 20 out of 100 physicians were actually sued in a given year. The average was 17 out of 100 sued in any given year. Combined with rising claim severity, that created an unsustainable position as far as the viability of medical practices and their ability to afford the premiums that doctors were being forced to pay. So there was a new round of tort reform, and that new round of tort reform in the early part of this century helped take the wind out of the sails of plaintiffs’ lawyers. Their penchant for wanting to sue doctors waned as a consequence.

So we had those two things happening in tandem. The industry has never done a good job of explaining why frequency fell so much over that time span. It forced me to go back, look at history, and say, “Well, we really didn’t give much credence to that report, ‘To Err Is Human,’ but maybe it did do some good. Maybe it was partly the catalyst,” because we’ve never seen frequency this low. You have to go back to when I started my career in 1968, before the first malpractice crisis in 1975, to see frequency this low.

While low frequency is great, there’s no question that malpractice cases are more expensive today than they ever were. Part of it is related to legal expense: what we have to pay defense lawyers, what we have to pay expert witnesses, and what we have to pay for everything we purchase on a physician’s behalf to fund their defense. Everything is more expensive. So the cost of defending those suits is higher, and they have never been more costly.

It’s also driven by social inflation and nuclear verdicts, which are verdicts in excess of $10 million, and which we’ve seen blossom in the medical professional liability world. For the last four years, we’ve averaged sixty nuclear verdicts a year in medical professional liability. Here we are in 2026, right at that average again; it looks like we’re going to come in somewhere above fifty. We used to talk about these being aberrations and outlier events. Well, in my mind, something that happens at least once a week, if not more often, is not an outlier anymore. It’s an everyday experience.

What people don’t realize is this: We’re the first to admit that we never pay these big verdicts. They always settle for something less, and in some cases they go away and we pay nothing. What they do is drive up the cost of the average settlement. Plaintiffs’ lawyers want more for these cases, and they use these big verdicts as the rationale for why we should pay more to settle them. They also create trepidation on the part of the individual physician, as well as their insurer, about trying these cases. No one, neither the doctor nor the insurance company, wants their name associated with these big verdicts. So the pressure is on us to settle these cases more than ever before.

We can look at insurance companies’ annual statements to try to get an idea of what’s being paid in these cases, and it’s very hard, even for somebody in the business, to get a true picture from an annual statement. But you can look to the National Practitioner Data Bank. In any given year, reports of closed claim payments for physicians account for 72 percent of all the cases reported to the National Practitioner Data Bank, so it’s a fairly steady and reliable repository of what’s actually being paid. For the first time, in 2025, we crossed the half-million-dollar mark per paid case for physicians, at $514,000 per paid case. That’s a 32 percent increase over the last 10 years, and 20 points of that 32 percent happened just from 2022 to 2025.

That’s a troubling trend, and it’s clear we’re never going to go back below half a million dollars for these cases. We’ve crossed a threshold, and it’s continuing to escalate, so we’re very concerned. Part of our desire in writing this paper was to point out that low claims frequency doesn’t mean lower malpractice premiums, because claims frequency is only one half of the equation. You have to look at claim severity, and claim severity is affected by the average payment for each case and how often you’re making that average payment. In other words, if it’s being paid out more often, that’s not good.

What’s interesting in the National Practitioner Data Bank data is that while claims frequency, as insurance companies measure it, has dropped 39 percent over the last 10 years, the actual reports to the National Practitioner Data Bank have only fallen 2 percent. Anecdotally, that suggests we are paying indemnity much more often. There are 39 percent fewer cases, but the reports to the National Practitioner Data Bank have only dropped by 2 percentage points, which means that, as a percentage of all cases closed, more cases are being reported to the National Practitioner Data Bank. We know from our own data that we’re paying indemnity much more frequently than we used to. That additional frequency of payments is driving up the average and putting pressure on the rates.

Kevin Pho: So you’re painting a counterintuitive picture, right? On one hand, claim frequency is falling, but the amounts awarded, the verdicts awarded for each claim, are rising. So they’re moving in opposite directions. You mentioned two reasons why that is, and you mentioned a couple of terms, social inflation and nuclear verdict. For those who aren’t familiar with that terminology, what do you mean by social inflation, and what classifies as a nuclear verdict?

Robert E. White: OK. Social inflation is a phrase that’s been around since the ’70s. Warren Buffett used it the first time, but he was talking about something different from what we’re talking about today. He was talking about courts interpreting insurance policies to cover more than they were written to cover, in the insurer’s mind, when the insurer issued the policy. Today we’re using the phrase social inflation to account for the increase in these indemnity payments that goes beyond economic inflation alone. In other words, they’re going up faster than economic inflation alone can explain.

So what’s driving it? Social inflation is driven, first of all, by juries’ mistrust of professional and corporate defendants in lawsuits. In medical professional liability, it’s borne out in a mistrust of science that has arisen since the pandemic, and in people questioning the practice of medicine as a consequence and a fallout of the pandemic. It also has to do with the fact that we’re influenced more by younger people today, and younger people today think that every bad thing that happens to somebody should have a remedy. Somebody should pay for the bad things that happen to people.

Younger people are on juries more now than ever before. Twenty years ago, in most of the states in this country, the only person who could sit on a jury had to be a property owner. Today it’s anybody over eighteen who has a driver’s license; you can get called to serve as a juror. So we have a different framework.

Add to that the tactics plaintiffs’ lawyers use to make the jury angry and trigger what we call the reptile part of our brain, the part neuroscientists say we inherited from reptiles: the fight-or-flight instinct. Those tactics are designed to identify the defendant as a person whose behavior needs to be punished, as an example to the rest of society, to avoid repetition of that behavior. They’re designed to create verdicts that punish the defendant, not make the injured party whole. Making the injured party whole was the intent of our tort system and our court system to begin with. Now plaintiffs’ lawyers are using it to get verdicts so big, by triggering this fight-or-flight instinct in jurors’ minds, that they go beyond simply making the injured party whole.

That’s why nuclear verdict is a phrase I like. A lot of people in the business don’t like that phrase, but nuclear explosions have fallout. The fallout from these verdicts is what I talked about earlier: forcing each settlement to go higher because of the verdict, and forcing us all to settle more cases to avoid going to trial and getting that big verdict.

Kevin Pho: Now, what classifies as a nuclear verdict? Is there a specific dollar amount, or is it more?

Robert E. White: Ten million dollars or more is generally recognized throughout the industry. Regardless of whether it’s a medical professional liability case or any tort case, a nuclear verdict is anything in excess of $10 million, and a thermonuclear verdict is any verdict in excess of $100 million. We’ve only had three in medical professional liability so far in 2026. Last year we had only two, but one of those verdicts was over $900 million, in a brain-damaged baby case, in Utah of all places. That’s a place you wouldn’t think nuclear verdicts happen very often.

We like to blame juries for this, but this case was heard by a judge, and the verdict was rendered by a judge. That’s astounding, in the sense that injuries in this business are like a commodity. To know what a case is worth, you have to know what the price of that commodity is in the markets you’re doing business in, and this judge knew the price of those cases. Nine hundred fifty million dollars is the biggest verdict ever awarded in the United States in a medical malpractice case, and it came from a trial judge.

Kevin Pho: What do you want physicians to understand about where the liability environment is headed?

Robert E. White: We want them to understand that it’s potentially headed for another crossroads, like the ones that created the need for tort reform in the past. We’re fearful that the plaintiffs’ lawyers who abandoned this line of business will return to it because of what they see happening in courtrooms today, what they see happening with the average settlement, and how often we’re paying out. We’ve become an attractive place for them to practice their profession.

We need physicians to understand that when there is a call to arms in their state, they need to respond. It varies from state to state; this isn’t a constant across the country. We are very concerned about making sure that patients have access to care. All of these crises create access-to-care issues and strain the health care system’s ability to do what it’s intended to do.

For example, high-risk physicians like obstetricians or orthopedic surgeons can cut their premiums in half by simply giving up a part of their practice. In the case of OBs, they could stop delivering babies and more than cut their premiums in half. That’s what we saw happen a couple of times in the last twenty-five years here in Florida, where I’m located. That sent busloads of pregnant women to our state capital, demanding that the legislature do something so they would have a doctor to deliver their babies, because doctors gave up the practice of obstetrics to achieve an affordable premium without giving up a gynecologic practice that could be just as lucrative, if that’s what they chose to do. In the case of orthopedic surgeons, it’s low back surgery. There are several specialties where that works, and it does create an access-to-care problem.

Kevin Pho: We’re talking to Robert White. He’s the president of The Doctors Company. Today’s KevinMD article is “Why medical malpractice claims cost more than ever.” Robert, as always, let’s end with some take-home messages that you want to leave with the KevinMD audience.

Robert E. White: The problem hasn’t gone away. Even though premiums are stable and relatively low across the country, it has changed from a claims frequency and severity problem to truly a claims severity problem. We need you to answer the call when organized medicine makes it, if they make it. We need you to be careful when you practice. We need you to spend more time with patients when outcomes become uncertain and patients become uneasy.

One thing I’ve seen over the years in my career, Kevin, is that when they ask patients why they brought a lawsuit, the answer is never, “When you did my cervical laminectomy, you should have used an anterior approach. Had you used an anterior approach, this complication never would have happened to me.” That’s never the answer. It’s always the same: “When I needed my doctor, I could not get the answers I needed from them at the time. So I ended up going to this lawyer to get the answers to the questions I couldn’t get from my doctor.”

If doctors just took more time when the outcome surprised either them or the patient, spent more time in the chart, spent more time with the patient, and were accessible to the patient, a lot of these cases could be avoided. Because what we’re seeing, even though frequency is low, is that plaintiffs’ lawyers are no better at picking cases than when frequency was off the charts. We’re still winning over 80 percent of the cases we take to trial, even in this environment. We are more careful, and we are settling more cases, but it’s not because the plaintiffs are choosing them better.

So we just need doctors to recognize that they’re at risk. Their exposure to lawsuits may have changed in terms of frequency, but the financial impact has become the important focus. In my mind, they’re just as exposed in that sense as they were when one out of five doctors were being sued twenty-five years ago.

Kevin Pho: Robert, thank you so much for sharing your perspective and insight, and thanks again for coming back on the show.

Robert E. White: My pleasure, Kevin.

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