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Medical Malpractice Payouts Account for Only a Small Portion of Healthcare Expenditures

A study by a group of researchers at the Johns Hopkins University Medical School, recently published in the Journal for Healthcare Quality, found that large medical malpractice payouts by healthcare professionals only account for a small fraction of U.S. healthcare expenditures. Such payouts receive significant attention from the public, media outlets, and tort reform advocates. This has led to the presumption that medical malpractice payouts have largely contributed to rising U.S. healthcare expenditures. The recent study challenges this belief.

The researchers analyzed data from the National Practitioner Data Bank, a government database which compiles a list of all monetary awards given in medical malpractice claims, spanning from 2004 to 2010. They defined large or “catastrophic” payouts as anything over $1 million. In total, large payouts amounted to approximately $1.4 billion in U.S. healthcare expenditures. This amount only represented about .05 percent of annual U.S. healthcare expenditures.

Defensive medical practices, not large payouts, are to blame for rising healthcare expenditures.

Marty Makary, one of the study’s researchers, explained that large payouts from medical malpractice lawsuits are not responsible for high healthcare expenditures. Rather, it’s the cost of defensive medical practices such as, needlessly tests and procedures, that physicians perform in to avoid legal liability that is to blame. Such medical procedures amount to nearly $60 billion a year.

Tort reform should focus on re-defining the standard of care.

Makary suggests shifting the focus of tort reform efforts away from reducing payouts by imposing medical malpractice caps, to re-defining the standard of care against which the conduct of medical professionals is measured during malpractice litigation. He believes the standard of care look at what is reasonable, rather than the average doctor’s practice.

According to Christopher Robinette, a tort law professor at Widener Law School, the issue is that the law is very vague about whether a physician’s conduct is reasonable under the circumstances. Not only does this drive medical professionals to needlessly order tests and perform procedures, it also results in lengthy court battles. The average medical malpractice case can take between four to six years to resolve.

According to Robinette, it is rare for a jurisdiction to focus tort reform efforts on the physician’s standard of care. Georgia is an aberration from this norm. For example, the state has passed legislation requiring plaintiffs to provide “clear and convincing” evidence that an emergency room physician was grossly negligent in medical malpractice cases.

If you or a loved one have been injured as a result of medical negligence or malpractice, you should contact an attorney immediately. An attorney will be able to protect your legal rights and ensure that you receive the compensation you deserve.