Healthcare Liability Trends to Watch Under Trump’s Administration

The 2025 presidential administration is likely to lead to changes for the healthcare liability landscape.

Potential deregulation initiatives could ease administrative burdens on providers and improve efficiency; however, the potential impacts of these policy changes on patient safety are not yet clear. Careful monitoring and evaluation will be important as new systems are implemented. Expanding access to care, especially through Medicaid, appears to remain a key priority of this administration.

Additionally, price transparency mandates are gaining ground, which may reshape malpractice claims and risk management practices. At the same time, tort reform, including caps on damages, could limit liability exposure for providers while raising questions about incentives for patient safety. And as the use of artificial intelligence (AI) in healthcare grows, new risk and liability concerns need to be addressed.

How these changes unfold will define the future landscape of healthcare liability. Navigating these complex and interconnected trends will be crucial for healthcare providers and insurers in 2025 and beyond, requiring strategic planning to address evolving regulatory, financial, and legal challenges.

This article is part of a series on 25 Trends in Risk Management for 2025. It dives into five important issues for the insurance industry to consider.

Increased Risk of Civil Litigation

The Trump administration has introduced many changes through executive orders, Department of Government Efficiency (DOGE) initiatives, and deregulation. As new policies take shape, those in healthcare professional liability will need to stay nimble and adjust to a more flexible yet complex landscape.

Fewer regulations can reduce red tape, perhaps making it easier for healthcare organizations to focus on patient care rather than jumping through regulatory hoops. However, changes in regulations affect oversight mechanisms in healthcare and may alter the level of external review applied to healthcare practices.

Disruption in regulatory frameworks also has the potential to create inconsistent or unreliable data, which may elicit process changes for insurers and other stakeholders who rely on data to assess risks.

DOGE cuts at the federal level aim to reorganize or disrupt many of the agencies previously relied upon for healthcare guidelines, statistics, data, research, and regulations. Reductions in force and other cuts at the Health and Human Services Department (HHS), the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), the Food and Drug Administration (FDA), the Centers for Medicare and Medicaid Services (CMS), and the Veterans Health Administration (VHA) are intended to eliminate unnecessary spending but have also created concern and confusion for many in the medical field who rely on these agencies for guidance and support.

People who perceive inadequacies in their care are more likely to pursue civil litigation. This creates a ripple effect, particularly for healthcare providers. When regulatory agencies fail to enforce compliance, it can create a sense of unfairness or neglect, prompting affected parties to seek legal recourse to address their grievances. Evidence suggests that people and organizations are more likely to sue when regulatory agencies fail to enforce laws and regulations effectively.

More oversight is being pushed to the state level, meaning there is the risk of a confusing patchwork system for both healthcare providers and underwriters looking to insure healthcare providers. Knowing each state’s regulations is crucial, especially for those providers or organizations practicing across state lines.

Healthcare providers will need to lean on their national associations and healthcare advocacy groups for guidance amid the rapidly changing legal and regulatory landscape to avoid an increased risk of civil litigation. Organizations are encouraged to keep an ongoing record of changes affecting patient care and treatment decisions in their setting, as they are happening, to help later if needed with defense.

As deregulation creates more uncertainty, one thing is clear: Healthcare risk experts will be in high demand. Underwriters and insurers may rely more heavily on professionals who specialize in healthcare risk, safety, and compliance. These experts will help navigate the evolving landscape by keeping track of the latest guidance from multiple sources, helping organizations adapt as new systems are implemented state by state, and finding alternative sources of reliable data.

Price Transparency and Malpractice Lawsuits

Price transparency, which is important to the Trump administration, could play a role in reducing the number of malpractice lawsuits.

When patients have more control and information about their care, they’re more likely to choose providers that align with their expectations for quality and price.

Additionally, clearer pricing could discourage providers from engaging in practices that harm patients, either financially or physically.

With prices available for all to see, hospitals and doctors may be less inclined to overcharge for services or take unnecessary risks with patients’ care.

Transparent pricing could also make it harder for providers to recommend unnecessary treatments.

Healthcare Tort Reform

While healthcare tort reform hasn’t been a topic of concern in the current Trump administration, it’s an issue that’s historically been important to the president.

In his first term, President Trump expressed clear support for tort reform measures–particularly in the context of medical malpractice lawsuits–and advocated for capping non-economic damages. While the topic hasn’t gained the attention of the White House in this term, the potential impact of tort reform on healthcare remains a key concern for providers, insurers, and underwriters alike. However, at this point tort reform measures are still being initiated or challenged at the state level.

For healthcare providers, tort reform could bring several benefits for the healthcare industry.

By reducing the number of lawsuits and the overall dollar amounts of damages awarded in malpractice cases, tort reform has the potential to influence liability pricing stability.

Tort reform helps make potential liabilities more predictable. With caps on damages and limits on the types of lawsuits that can be filed, insurers and providers will have a clearer understanding of their exposure to legal action. This can allow them to:

• Better assess healthcare liability insurance needs
• Set appropriate coverage levels
• Allocate resources more effectively to mitigate risks.

Tort reform isn’t just beneficial for individual providers–it could also have a broader impact on the healthcare system as a whole.

In high-risk areas or specialties where the threat of lawsuits is especially pronounced, tort reform could encourage more professionals to enter those fields, alleviating provider shortages in areas such as obstetrics and emergency medicine and ultimately providing increased access to care.

There are challenges to tort reform measures. While tort reform has many potential benefits, critics argue that limiting damages in malpractice cases could unfairly disadvantage patients who are victims of medical errors. They also point out that reform efforts could disproportionately affect those in vulnerable situations, such as low-income patients, who may rely on the legal system for compensation.

Healthcare M&A and Deregulation

The Trump administration may influence how mergers and acquisitions (M&A) unfold in the healthcare sector.

One of the major trends that may occur is the relaxation of regulations surrounding M&A activities. In previous years, there’s been a tendency to scrutinize mergers, especially those involving hospitals and healthcare systems, to ensure competition isn’t stifled and that patient care remains equitable.

Three things we know about healthcare M&As:

• Consolidations come in many forms and involve different providers
• There has been a large number of consolidations in provider markets since the 1990s
• Corporations have been acquiring physician practices for some time.

Trump’s administration could potentially lessen the regulatory hurdles, making it easier for companies to acquire other practices or consolidate systems. This change could lead to an increase in M&A activity, as firms rush to capitalize on favorable legal landscapes.

Organizations that double in size overnight but that don’t yet have the risk and safety infrastructure to support rapid expansion are of concern to the insurance industry in many ways and can lead to added professional liability risks. Here are a few challenges to consider:

• Blending of cultures. When smaller hospitals or practices are acquired by larger health systems, there must be a strategic plan to implement a culture of safety among all caregivers.
• Lapses in care. If care standards aren’t effectively integrated, lapses in care or disruptions in transitions of care may occur, which could result in errors or patient harm.
• Pressure to prioritize cost over quality. If the acquisitions focus more on cost reduction than quality, providers may face pressure to treat more patients quickly, implement challenging new systems in the name of efficiency, or make other adjustments potentially compromising care and increasing liability risks.

AI in Healthcare

A more recent development from the White House is new policies surrounding the use of artificial intelligence (AI) and procurement in federal agencies.

In April the administration released revised policies on Federal Agency Use of AI and Federal Procurement that aim to remove “unnecessary bureaucratic restrictions, allow agencies to be more efficient and cost-effective, and support a competitive American AI marketplace,” a White House release said on April 7.

For example, the Department of Veterans Affairs (VA) uses AI to support the identification and analysis of pulmonary nodules during lung cancer screening exams. According to the White House fact sheet on the issue, “the AI functionality improves detection of these nodules, assisting clinicians with life-saving diagnoses.”

While the integration of AI into healthcare systems holds extraordinary promise for enhancing patient care, streamlining operations, and improving diagnostic accuracy, it also introduces significant legal and ethical vulnerabilities. If not carefully designed, validated, and tightly managed, the use of AI can expose healthcare providers to a wide array of legal risks–including malpractice claims, regulatory penalties, and breaches of patient privacy–making robust oversight and governance essential for responsible implementation.

First, data bias can severely limit AI effectiveness across diverse populations. Second, overreliance on AI may lead to clinicians overlooking their own judgment or missing context clues. Providers need to realize that they are the ones held professionally liable for the care and safety of their patients. AI supportive technology is designed to assist them–not replace them. Validation and regulation are crucial to ensure AI tools are safe, equitable, and effective.

Consider this scenario: A major hospital system implements an AI-driven early warning system to detect sepsis, a life-threatening infection-related condition. The AI algorithm analyzes real-time patient data and alerts clinicians when a patient may be at risk. In this case, the alert was triggered for a 72-year-old patient who presented to the ER with high fever and altered consciousness after receiving home health care for a recent hernia surgery.

However, the ER physician overrode the alert using his own best judgment after reviewing the full clinical context.

First, the patient’s daughter verbally reported that the patient had been on multiple antibiotics for a post-surgical infection and had reported adverse reactions and side effects from those medications. Second, the patient in a moment of consciousness said “no antibiotics.” And third, the patient seemed to be developing a rash and flu-like symptoms, including rigors. The patient was treated and stabilized with epinephrine and IV Benadryl and then transferred to the Med Surg unit.

But after the hospital’s infectious disease physician saw the patient and the AI sepsis alert, she decided without any additional context to treat the patient prophylactically with vancomycin pending lab results. The infectious disease physician did not talk with the daughter and did not realize that the patient had been treated at home with vancomycin, doxycycline, and ciprofloxacin. The patient developed a near-fatal reaction to the vancomycin, called Stevens-Johnson syndrome (SJS), as a result. SJS is a rare, serious disorder of the skin and mucous membranes which can cause the failure of multiple organs.

Navigating the Future of Medical Liability

The new administration’s push for healthcare policies that emphasize efficiency could reshape the professional liability landscape. While relaxed regulations may encourage growth and creativity, the cultural shifts and increased pressure for efficiency could heighten risks. Providers and insurers will need to stay vigilant as these changes unfold.

Foster Earle, ARM, is the founder, president, and CEO of OmniSure Consulting Group, a clinical risk services partner for many of the most well-known and well-respected healthcare professional liability and medical malpractice insurers. Through a nationwide network of clinical risk specialists, OmniSure helps to prevent and control losses with client-specific recommendations and pre-claim advice-on-demand. She is a frequent speaker for healthcare associations, insurance conferences, and training programs.

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