The impending physician shortage may have an effect on more than access to care. Representatives from PricewaterhouseCoopers L.L.P. (PwC) cited the impending shortage as one of the factors that may cause malpractice insurance rates to increase within the next three years. PwC representatives spoke at the American Society for Healthcare Risk Management’s 2012 conference this month about healthcare industry changes that may affect malpractice insurance costs. In the presentation “Bracing for change: Medical professional liability insurance at a crossroads”, as well as the white paper published under the same title, the company says medical malpractice costs have been relatively stable for the last five years. However, expected changes in the healthcare industry, such as the in the number of insured Americans, consolidation of medical providers, and malpractice tort reform, could cause a jump in cost. More patients The aging population combined with the estimated 30 million newly insured Americans insured under the Affordable Care Act represents a significant increase in the number of patients seeking medical care. Unfortunately, the physician workforce is not expected to match the increase. As a result, some areas will see their physician workforce struggle to meet the demand. Patients may have to wait longer to see their primary care physicians, potentially leading to diagnosis delays; one of the seven most common reasons that family practice physicians are sued, according to the American Academy of Family Practitioners (AAFP). Also, physicians will be expected to perform more procedures and make more diagnoses, increasing the likelihood of malpractice claims, according to PwC. More hospital employed physicians As reported on the Barton Blog, many physicians are closing their private practices to work for hospitals. This has a positive influence on malpractice prices because large healthcare organization typically self-cover their risk, thus reducing the burden on traditional insurers. However, PwC expects that trend to change. Premiums may increase as a response to the fact that fewer physicians are purchasing malpractice insurance. The few who continue to buy traditional liability coverage may be required to pay more in order to make up the difference. Tort reform According to PwC, state tort litigation laws have played a big role in controlling medical malpractice insurance over the last decade. Caps on the maximum jury awards for damages discouraged many trial attorneys from pursuing malpractice cases. But that trend may be reversing. According to a PwC representative, seven states recently overturned those caps and further actions could cause a surge in medical malpractice claims. Provisions contained in the Affordable Care Act (ACA) further complicate the tort reform landscape. The APA allocates $50 million for states to develop demonstration programs that are alternatives to the tort litigation system. Although proposed programs are years away from implementation, they could have a significant influence, both positive and negative, on malpractice insurance prices.