“Nuclear verdicts” — jury awards of $10 million or more — are becoming increasingly common in malpractice cases against hospitals, physicians and ASCs. Economic and social inflation are key drivers behind the surge, Medscape reported Oct. 20.
Recent examples illustrate the trend. On July 10, an appellate court upheld a $207.6 million verdict against Philadelphia-based Hospital of the University of Pennsylvania, affirming a lower court’s finding that a delayed cesarean section caused a child to be born with cerebral palsy and severe neurodevelopmental impairments. In August 2024, a jury awarded $25 million to the family of a man who died following a routine colonoscopy at an ASC in Oregon.
The Doctors Company released a report in September that found economic and social inflation have added an estimated $4 billion in insured losses and expenses to the medical malpractice insurance market over the past 10 years.
According to Medscape, social inflation refers to the “rising claim and legal costs due to societal factors, such as shifting attitudes toward corporate responsibility, declining public trust in large organizations, and changing perceptions on the value of money.” Other contributors include third-party litigation funding and the growing influence of social media on public and juror attitudes.
The TDC report found that both the frequency and size of malpractice payouts continue to climb. The share of claims exceeding $2 million rose from 1.9% in 2013 to 3.2% in 2023, while the average claims payout increased from $447,108 to $485,885 over the same period.
A July 2024 report from the RAND Corporation found similar patterns: The plaintiff win rate increased from 53% to 64% between 2010 and 2019, and trial awards per plaintiff grew at a 7.6% compound annual rate.
The rise in social inflation in medicine is rooted in several dynamics. As healthcare becomes more corporatized, costly and impersonal, some physicians say the patient-physician relationship has eroded from one grounded in compassion to one that feels transactional.
“Unfortunately, the [patient-physician] relationship has gone from one of mutual trust and long-term relationships to a transactional and a short-term meeting,” Easwar Sundaram, MD, president of Texas Institute for Neurological Disorders, told Becker’s. “The hospitalist concept has totally destroyed continuity of care to one patient seeing several hospitalists in a single stay, and everyone follows a different plan and patients are confused. Patients armed with Google search and ChatGPT info now claim that they have the diagnosis and want the treatment they have chosen and not discuss in a collaborative way.”
As claim sizes and payouts rise, insurance premiums are following suit, according to Medscape, and escalating losses are driving steady rate hikes. A recent American Medical Association report found that premiums have climbed consistently since 2019: In 2024, half of insurers reported raising rates, compared with just 14% in 2018.
