While medical malpractice insurance rates in Oregon have been moderate, there have been some increases in recent years in the state and across the country that reflect signs of a hardening market. A hard market is most often caused when insurers raise premiums to offset losses paid in increasing customer claims — both in the frequency and severity of claims. According to a national 2020 Medical Liability Monitor Annual Rate Survey, more than 25% of medical professional liability insurance premium rates increased in 2019 – the highest percentage observed since 2006.
For several decades, Oregon had a $500,000 cap on noneconomic damages awarded in medical and other liability cases. The cap helped keep medical liability insurance rates from rising in the state to unaffordable levels and has made Oregon a more attractive place to practice medicine. But a July 2020 ruling by the Oregon Supreme Court in Busch v. McInnis Waste Systems has struck down the cap. While the case did not involve a physician or medical practice, the ruling states that the cap enacted by the state legislature in 1987 violates the Oregon Constitution’s remedy clause and effectively abolishes the limit on noneconomic damages in medical and other liability cases.
Navigating Through a Hard Market
Oregon has been known to have a low level of litigation compared to most states. But now, with no limit on noneconomic damages in liability cases increasing the risk of more frequent and significantly larger malpractice court awards and settlements combined with a hardening market, rates are likely to be further affected.
Unfortunately, the coronavirus pandemic has also increased the legal risks of medical practices. The greatest likely risk stemming from the pandemic is the exponential growth in remote visits. As the use of telehealth increases, the possibility of a physician missing a diagnosis or misdiagnosing rises potentially leading to a malpractice suit.
Implementing Performance-Based Controls
Medical practices can either be a victim of the marketplace or choose to take steps to differentiate yourselves. Having a risk management strategy in place to limit your liability helps both reduce the potential of malpractice claims and keep your insurance rates in check. Investing in risk management practices and deploying carrier resources available to you will ultimately help your practice accomplish good outcomes and keep control of rising costs.
Choose the Right Guide
When buying malpractice policies, practices can choose to purchase direct from the insurance carrier or partner with an independent insurance agency. While the practice may feel like they are getting the best deal by going direct to the carrier, oftentimes that’s not the case. Working with an independent agency that specializes in your industry and understands the local marketplace, most often results in lower premiums and an improved customer experience.
PayneWest Insurance, a Marsh & McLellan Agency LLC company, offers its expertise to medical practice managers and owners. Our healthcare practice specialists guide clients in choosing the carrier that will work best for your practice’s goals and provide the best value, and our partnership goes far beyond that. We consult with you on the implementation of risk management strategies, and we act as your advocate with carriers to help them understand your practice and your performance. If you experience a loss, our claims advocacy services support you in obtaining fair resolution. And at time of renewal and as your practice changes, we make sure that you have the best solutions in place and work with you to adjust strategies as needed.