States Score Big with Low Medical Malpractice Claims, Few Regulations

Published May 18, 2017

Midwestern and southern states offer doctors fewer regulatory and legal challenges and greater opportunities to grow their practices than Mid-Atlantic and New England states, a study by the business and finance research website WalletHub found.

Midwestern states ranked in the top 10 in the study, titled “2017 Best and Worst Doctors for States,” are Iowa (1), Minnesota (2), Wisconsin (4), and Kansas (5). High-ranking southern states are Mississippi (8), Alabama (9), and Tennessee (10).

New Hampshire (34) and Vermont (38) were the only New England states not ranked among the 10 worst. Low-ranking Mid-Atlantic states include Delaware (42), Maryland (48), New Jersey (49), the District of Columbia (50), and New York (51).

Scores were weighted 70 percent for “Opportunity and Competition,” as determined by physicians’ average starting salary and annual wage, hospital and provider shortages, and percentage of insured and elderly patients, according to the March 27 study.

States scored higher for requiring fewer continuing medical education units, which are typically necessary for doctors to maintain their licenses, and for participating in the Interstate Medical Licensure Compact, which helps doctors get licensed to treat patients in other states using telemedicine.

The remaining 30 percent of the score evaluated each state’s “Medical Environment,” including the quality of its public hospital system and whether its state medical board is punitive. Low malpractice award payouts and malpractice insurance premiums earned higher scores.

Litigation Factor

Peter Nelson, vice president of policy at the Center of the American Experiment, says the rankings accurately reflect Minnesota’s strengths.

“It’s no surprise Minnesota ranks among the best states for doctors, considering the state consistently ranks near the top of the country in most measures of public health and provider quality,” Nelson said. “The fact that Minnesota doctors have less exposure to frivolous litigation is a big reason why the state ranked so well.”

Approximately 15 percent of each state’s score was based on its malpractice award payout amount per capita and annual malpractice liability insurance rate.

Nelson says states deserve lower scores for leaving doctors vulnerable to unwarranted lawsuits.

“WalletHub understandably put a lot of weight behind whether doctors are subject to excessive litigation and malpractice liability,” Nelson said. “Doctors facing a higher risk of a malpractice claim bear more stress, pay higher insurance premiums, and practice more defensive medicine.”

Regulatory Burden

Minnesota’s high score fails to reflect excessive reporting requirements imposed by the state, Nelson says.

“The WalletHub index misses some factors,” Nelson said. “Minnesota doctors are forced to spend more time on administrative tasks than doctors in other states.” 

Marc Kilmer, a senior fellow at the Maryland Public Policy Institute, says a study on the best and worst states for patients would reveal even more important information.

“The rankings are useful to a certain extent,” Kilmer said. “I am more concerned about consumers rather than doctors. Maryland comes out poorly whether you’re the doctor or the consumer.”

Excessive health care regulation earned Maryland its low rank, Kilmer says.

“The ranking is in terms of legal and regulatory framework in Maryland,” Kilmer said. “There are a lot of laws that constrain consumers and providers.” 

Veronica Harrison ([email protected]) is director of marketing at The Heartland Institute.