Malpractice lawsuits exist to protect patients from negligent physicians. However, many of the suits brought about these days do little to protect, and in fact, do a great deal of harm to the medical practice industry.

The litigious tendencies of the late 20th century led to a surge in malpractice lawsuits in the United States, which in turn led to the creation of a new industry, the medical malpractice insurance carrier. The unfortunate bi-product of this industry creation is that if physician's aren't paying for malpractice insurance, they could end up paying dearly on a malpractice lawsuit settlement. Either way you look at it, the modern physician is paying someone because of the medical malpractice lawsuit.

The Numbers Don't Lie

With the average malpractice settlement at around $250,000 in the US (though the number varies significantly depending on location, practice size, and specialty) its no wonder your average family physician pays upwards of $12,500 annually for coverage. There is a significant amount of variance in rates throughout the country, however, due to differences in state tort laws. For example in Texas physicians typically carry coverage of $250,000 to $700,000, whereas in New York City the average is well over $1 million. Its also important to note that across the country only 4 percent of primary care physicians go without malpractice insurance, and most states do not even allow physicians to go without insurance.

Light at the end of the Tunnel?

Its not all bad news for malpractice premiums around the country. Increased competition has led to gradually falling rates nationwide, as well as many states reforming tort laws to protect their physicians. Rates are expected to continue to fall over the next 2 or 3 years. Still, compared to many other industries' insurance premiums, medical malpractice makes quite a dent in the physician's pocket.