Payments for Malpractice Claims Are Not Driving Up Medical Costs

Carl Saiontz

By Carl Saiontz
Posted October 24, 2014

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Despite continuing campaigns to substantially reform the tort system, which misleadingly paint the picture that there are run-away jury verdicts throughout the country and settlements being paid by insurance companies for frivolous lawsuits, a new report highlights the fact that payments in medical malpractice claims actually remain at historic lows in the United States. 

The prominent consumer watchdog group Public Citizen released a report (PDF) this month, which takes a close look at the actual number of medical malpractice lawsuits filed throughout the United States and the resulting payments in 2013.

Although tort reform advocates suggest that the U.S. tort system is broken and that verdicts and settlements in medical malpractice cases are driving up medical costs, Public Citizen points out that healthcare providers are raising prices, even as settlements and payments for injuries caused by preventable medical mistakes remain steady.

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According to the report, there were 9,677 medical malpractice lawsuit payments in 2013, which remains near the record-low levels reported in 2012, with only a difference of about 300 claims being paid.

The value of those malpractice settlements and payments in 2013 was $3.3 billion, which is lower in actual and inflation-adjusted dollars than any year from 1999 to 2011.

The payments only account for one-tenth of one percent of the national cost of health care, despite claims by tort reform advocates and lobbyists for the insurance industry that medical malpractice claims have reached “crisis” levels.

In fact, Public Citizen highlights that the lawsuit costs account for only one-tenth of one percent of the national cost of health care, and medical malpractice insurance rates are actually declining in the U.S.

Unfortunately, the overall drop in medical malpractice claim payments over the past 10 years does not appear to mean that the quality of medical care has become safer or that doctors are avoiding preventable complications and injuries.

“Estimates on the number of avoidable errors have tended to grow even more alarming since 1999, when the prestigious Institute of Medicine (IOM) shocked the nation by reporting that between 44,000 and 98,000 patients were dying every year because of avoidable medical errors,” according to Public Citizen.

The report notes that only a small fraction of those who suffer from such medical errors actually file malpractice claims, and then only about half of those ever actually result in payments, which is often far short of actually compensating for their injuries.

The study’s findings are similar to other recent studies, which have suggested that the fear of medical malpractice far outweighs the actual threat to the health care system.

A study published in May 2013 by Johns Hopkins researchers noted that even when patients are paid significant awards for medical malpractice claims, those awards are not driving up the cost of health care in the U.S.

A 2011 study published in the New England Medical Journal found that only 7.4% of physicians face the risk of medical malpractice claims each year. Only one out of every five claims result in a settlement or monetary award.

Rather than focusing efforts on limiting access to the courts for individuals and families impacted by preventable medical mistakes, attention and focus should be placed on making sure that steps are being taken to avoid the injury in the first place. Payments in medical malpractice claims should be dropping due to fewer injuries associated with preventable errors and mistakes, not by limiting the ability of those injured by mistakes from securing financial compensation.

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