Medical Malpractice Payments Have Fallen for Eighth Year: Report

A new report by the consumer watchdog group Public Citizen indicates that medical malpractice payments dropped to an all-time low last year, despite claims by tort reform proponents that medical malpractice lawsuits are a driving force behind the increasing cost of health care. 

The new report on medical malpractice payments (PDF) was released on July 11, finding that both the number of malpractice payments and their value were the lowest they have been since 1991, the earliest year such numbers were tracked.

The report also found that litigation reform measures, such as overriding jury decisions on damage awards with arbitrary legislative caps on payments, did nothing to bring down healthcare costs or protect patients.

Researchers found that in actuality, so-called tort reform measures likely increased healthcare costs by passing on the price of uncompensated medical errors to taxpayers, instead of having those responsible pay the proper compensation for injuries and disability they caused.

According to data from the National Practitioner Data Bank, the overall value of all medical malpractice payments made in 2011 accounted for only 0.12 percent of the nation’s healthcare costs. That is just slightly more than one-tenth of one penny for every dollar spent. The payments fell for the eighth straight year, despite some claims that medical malpractice costs were on the rise.

Some proponents of medical malpractice reform have suggested that most claims are frivolous, but Public Citizen’s analysis determined that 80% of claims that actually resulted in payments were the result of cases where patients suffered death, catastrophic harm or serious permanent injury.

Despite the reality of falling medical malpractice costs, the health care industry failed to pass those savings on to customers, the report found. From 2000 to 2011, the cost of health care in the United States has increased about 97%. During the same time period, the value of medical malpractice payments dropped about 12%.

The report highlights the impact of medical malpractice reforms introduced in Texas in 2003, which included a $250,000 cap on non-economic damages. Despite malpractice payments by doctors dropping 65% since the cap was put in place, health care insurers have been raising premiums on Texas physicians faster than the national average.

The reforms were sold to Texans as a means of making healthcare more affordable and accessible, but the only apparent result has been an inability of Texans to be compensated for the full value of medical malpractice-based injuries, and higher health care costs.

Last month, the Journal of Empirical Legal Studies issued a study supporting Public Citizen’s conclusions on Texas health care costs. The report concluded that the “accumulation of recent evidence finding zero or small effects suggests that it is time for policymakers to abandon the hope that tort reform can be a major element in health-care cost control.”