Malpractice Payouts Don’t Drain Health-Care Resources

For years now, medical professional organizations and insurers have waged war on the legal system for redressing medical malpractice that harms patients. They claim that too often payouts are so large and frivolous that they force clinicians to practice “defensive medicine” in order not to get sued and that they deplete health-care resources.


As reported on, medical malpractice reform, whose misguided, unfair and misleading campaign we regularly cover, is addressing phantom problems.

Researchers from Johns Hopkins University School of Medicine reviewed malpractice payouts of more than $1 million and concluded that they added up to approximately $1.4 billion a year. That’s much less than 1% of medical expenditures in the U.S.

“The notion that frivolous claims are routinely resulting in $100 million payouts is not true,” said study leader Marty Makary, M.D., M.P.H., at Johns Hopkins. “The real problem is that far too many tests and procedures are being performed in the name of defensive medicine, as physicians fear they could be sued if they don’t order them.

“That costs upwards of $60 billion a year. It is not the payouts that are bankrupting the system — it’s the fear of them.”

The study was published in the Journal for Healthcare Quality.

Malpractice payouts of more than $1 million are more likely to occur if:

  • the injured or killed patient is an infant;
  • the patient develops quadriplegia, brain damage or the need for lifelong care as a result of the malpractice; or
  • the malpractice is related to anesthesia.

The review involved medical malpractice claims from 2004 to 2010 as recorded in the National Practitioner Data Bank. In 2004, data about the age and gender of patients and severity of injury became available for the first time. The payout information pertains only to individual providers, not hospitals or corporations, so it’s probably underestimated.

In that seven-year period, 77,621 claims were paid; catastrophic claims ($1 million or more) made up only 7.9%. The national total of catastrophic payouts was $9.8 billion, or 36.2% of the $27 billion of total claims.

We wrote recently about misdiagnosis as the most common medical mistake. It follows, then that in this analysis, the most common claims associated with catastrophic payouts were about misdiagnoses-more than 1 in 3. Obstetrics-related claims were slightly more than 1 in 5, and and surgery-related were about 18 in 100. As summarized by Science Daily, errors in diagnosis were twice as likely to result in a catastrophic payout as those related to equipment or products-related errors, and they had larger amounts.

About 37 in 100 catastrophic payouts involved physicians who had previous claims in the database.

Like other clear-eyed observers of what’s really-what’s provably–happening in medical malpractice, Makary concluded that the focus of legal reform should be reducing the practice of defensive medicine, which encourages overtesting and overtreating, not capping the amount that patients who have been harmed can recover from the people who caused it.

More research, Makary said, can determine what interventions might prevent the kind of errors that result in catastrophic payouts, the overall goal being to improve patient safety while cutting the cost of care.

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