Health Care Costs Not Driven Up By Medical Malpractice


Medical malpractice reform is often the focus of efforts to lower health care costs. Some researchers have asserted that large, headline-grabbing, and “frivolous” payouts are driving up health care costs. However, researchers at Johns Hopkins have reviewed malpractice claims and suggest that these assertions are wrong.

However the idea that $100 million payouts routinely result in frivolous claims is not true. A review of medical malpractice payouts over $1 million (catastrophic payouts) showed that they added up to about $1.4 billion a year. This is less than one percent of all medical expenditures in the United States. The real drain on health care is the excessive use of tests and procedures by doctors practicing defensive medicine for fear that they could be sued if they do not order them. This costs the health care system upwards of $60 billion every year. Therefore it is not the actual payouts of medical malpractice lawsuits that are the problem; it is the fear of being sued.

The researchers reviewed medical malpractice claims nationwide using an electronic repository of settlements or judgments called National Practitioner Data Bank. They focused on data from 2004 to 2010. However the information in this repository includes only the payments made by individual providers. Hospitals and other corporations are not included; therefore the number of payouts may have been underestimated by 20 percent.

Over this 7 year period 77,621 claims were paid, and claims over $1 million made up 7.9 percent of payouts. The amount of payouts for catastrophic claims totaled $9.8 billion, which was 36.2 percent of the $27 billion worth of claims paid over that period of time. The data showed that payouts for catastrophic claims were more likely to occur when a patient who is killed or injured was younger than 1 year; the patient developed quadriplegia, suffered brain damage or then needed lifelong care because of the malpractice; or problems related to anesthesia resulted in the claim.

Diagnosis-related, obstetrics-related, and surgery-related events were the most common allegations that catastrophic payouts were associated with. Errors related to equipment or products were significantly less likely to have a payout exceeding $1 million. Catastrophic payouts tended to involve physicians with a previous claim, 37 percent of the payouts.

One researcher has suggested that legal reform should be on doctor protections that aim at reducing defensive medicine. Not the creation of medical malpractice caps. More research needs to be done to determine what needs to be done to prevent the types of errors that lead to catastrophic payouts. In the end the overall goal needs to be improving the safety of patients while reducing costs.

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