New Report Finds Medical Malpractice Payments at Record Low

A new report from Public Citizen, a national non-profit organization representing consumer interests on a broad range of issues, has found that medical malpractice payments made on behalf of doctors reached a record low in 2012. Written by Taylor Lincoln, research director for Public Citizen’s Congress Watch Division, the report, titled “No Correlation: Continued Decrease in Medical Malpractice Payments Debunks Theory That Litigation Is to Blame for Soaring Medical Costs,” analyzed data from the federal government’s National Practitioner Data Bank (NPDB), which has tracked medical payments since the fall of 1990. Among other conclusions, Public Citizen claims its findings debunk the myth that medical malpractice lawsuits are to blame for rising health care costs.

Report highlights

Conclusions of the report include:

• A Drop in Medical Malpractice Payments: The number of malpractice payments on behalf of doctors in 2012 was the lowest on record, falling for the ninth consecutive year. This is the lowest annual total since the NPDB was created in the fall of 1990 to track medical malpractice payments.
• A Decrease in Inflation-Adjusted Total Value of Payments: The cumulative value of malpractice payments in 2012 was the lowest in the history of the NPDB, when adjusted for inflation by the consumer price index (CPI) or the medical services index.
• Reduced Costs to the Nation’s Healthcare Bill: Medical malpractice payments’ share of the nation’s total health care bill reached an all-time low in 2012, totaling just 11% of the year’s national health care costs.
• Lower Costs for Liability Insurance Premiums Paid by Doctors and Hospitals: Total costs for medical malpractice lawsuits, as measured by insurance premiums paid by doctors and hospitals, were the lowest in 2012, since 2003, which is the first year for which relevant data is available. Liability insurance premiums cover payments to victims, defense litigation costs, liability insurers’ profits, and insurers’ administrative costs.
• Malpractice Awards Compensate Patients with Severe Harm: Four-fifths of medical malpractice awards were paid to patients and their families who experienced catastrophic harm, serious permanent injuries, or even death. According to Public Citizen, this refutes claims that medical malpractice lawsuits are largely “frivolous,” as 81% of payments were made to patients or surviving loved ones who experienced severe harm due to medical negligence.
• A Drop in Litigation Doesn’t Mean Lower Costs for Consumers: During the period between 2003 to 2012, the value of medical payments fell by 28.8% while national health care spending rose by 58.3%.
• No Indication that the Decline in Medical Malpractice Payments is Due to Better Medical Care: A 1999 Institute of Medicine report, “To Err is Human,” found that 44,000 to 98,000 patients were dying each year due to avoidable medical errors, meaning that several times as many were dying from medical errors as the total number receiving compensation for medical malpractice.

Interpreting the facts

During the health care reform debate, John Boehner (R-Ohio), who was serving as the House Minority Leader at the time, claimed medical malpractice was the “biggest cost driver” in medicine. Public Citizen claims that its findings dispute this allegation. According to the report, the drop in medical malpractice lawsuits is likely due to state laws reducing patients’ legal rights, rather than to its improvements in medical care. In recent years, studies have found that between 1-in-4 and 1-in-7 hospital patients suffer adverse events while under the supervision of medical professionals, which is defined as undesirable and unanticipated developments leading to death or serious injury.