Malpractice-Claims Data

Table 1. Table 1. Summary Statistics for Physician Specialties.

We obtained physician-level data on malpractice claims from a large, physician-owned professional liability insurer that provided coverage to physicians in every U.S. state and the District of Columbia. The procedures for safeguarding these data were approved by the institutional review board at RAND. The data included records on closed malpractice claims for 40,916 physicians who were covered for at least one policy year from 1991 through 2005. The number of physicians grew steadily from 12,498 in 1991 to 17,376 in 2005. We identified 24 specialties that had at least 200 physicians represented in our sample. Physicians belonging to other, smaller specialties were grouped together in an “other specialty” category. Across specialties, there were 233,738 physician-years of coverage, with an average duration of coverage of 5.7 years (range, 4.6 in pediatrics to 7.3 in thoracic–cardiovascular surgery). The most common specialties in our data were anesthesiology, family general practice, and internal medicine (Table 1).

Claims were available for all years during which a physician was covered by the insurer. Claims that were not yet closed by the insurer were not available. Indemnity payments that were associated with a claim reflected payments to a claimant that arose from either a settlement with the claimant or a jury verdict.

Although the data included physicians from all 50 states, California was overrepresented in our data, accounting for 16,076 physicians (39.3%). We corrected for this oversampling by weighting each physician in our data by the relative number of physicians who are not employed by the federal government reported in the Area Resource File of the Department of Health and Human Services. After weighting, the share of physicians in California was 12.2%, which by construction matches the share reported in the Area Resource File. Because we relied on data from a single insurer, we verified that the average number of indemnity claims per physician and payment levels in our data matched similar numbers in the National Practitioner Data Bank. In a previous study, investigators also relied on claims from a single insurer.19

We included physicians between the ages of 30 and 70 years in the study. The average age of physicians in all specialties was 49.0 years (range, 43.2 for emergency medicine to 53.0 for gynecology). Data on other demographic characteristics (e.g., sex and race) were not available.

Describing Malpractice Risk

For each specialty, we began by calculating the proportion of physicians who faced a malpractice claim in a given year. We distinguished between claims leading to indemnity payments versus overall claims (those with a defense cost but not necessarily a payment). In sensitivity analysis, we adjusted for physician age, year, and state to examine whether these adjustments would affect our reported estimates.

Given the long period studied, we separated our sample into three periods (1991–1995, 1996–2000, and 2001–2003) in order to investigate how claims rates varied over time for high- and low-risk specialties, which were defined as the five specialties with the highest and lowest proportions of physicians with a claim in a year, respectively. We did not include 2004–2005, since many claims that had been filed during that period might not have been closed by the end of 2005.

We then characterized the size of malpractice payments for each specialty by computing mean and median annual payments. We also determined how many payments exceeded $1 million to characterize specialties with outlier awards. Payments were normalized to 2008 dollars on the basis of the Consumer Price Index.

Finally, we analyzed data on physician age to estimate the cumulative career malpractice risk of being sued at least once by a given age for both high- and low-risk specialties. We first estimated a multivariate regression model of the probability of facing at least one claim in a given year as a function of physician age, physician random effects, physician specialty, state of practice, and county–year demographic variables (per capita income, age distribution, and the proportions of residents who were white or male). We allowed the effect of age to vary according to specialty. Physician random effects were included to account for unobserved differences among physicians that might have led some physicians to have been sued more frequently than others. This estimation yielded predicted annual rates of facing a claim at every age of a physician's career and for each specialty. These estimated lifetime risk profiles were then used to compute cumulative career malpractice risks for physicians in high- and low-risk specialties, as well as in each of the largest specialties in our data (internal medicine and its subspecialties, general surgery and surgical subspecialties, anesthesiology, obstetrics and gynecology, and pathology).

Our model assumes that the probability of being sued was unrelated to the duration of coverage by the insurer and that the probability of being sued at a given age was independent of being sued at an earlier age (after adjustment for physician random effects). To ensure that estimates of the cumulative risk of being sued in each specialty were not determined by the experience of a few idiosyncratic physicians, we conducted two sensitivity analyses: we excluded physicians after their first claim (consequently ignoring the subsequent experiences of physicians who were sued repeatedly) and estimated fixed-effects specifications that allow for correlation between physician characteristics (such as age) and unobserved propensities to be sued.