Healthcare News & Insights

2011 medical malpractice payments experience a new low

Believe it or not, medical malpractice payments aren’t responsible for soaring healthcare costs.

At least that’s what a new Public Citizen Report found.

In fact, medical malpractice payments have been on the decline for the past eight years.

The report, “Malpractice Payments Sunk to Record Low in 2011,” analyzed data from the federal government’s National Practitioner Data Bank (NPDB), which tracks malpractice payments on behalf of physicians. It found that in 2011, the number of medical payments and the inflation-adjusted value of these payments were at their lowest level on record.

The report also revealed that in 2011:

  • Medical malpractice payments’ share (0.12%) of the nation’s total healthcare bill was the lowest on record
  • The average size of medical malpractice payments (around $327,000) declined from previous years
  • Eighty percent of medical malpractice awards compensated for death, catastrophic harm or serious permanent injuries — putting to rest the claim that these lawsuits , for the most part, involve minor mishaps, and
  • Healthcare costs continued to rise despite the fact that medical malpractice payments went down.

Reason for decline?

While many hospital executives and physicians would like to attribute the decline in medical malpractice payments to safer conditions in their facilities, there’s no evidence to support that.

Quite the contrary.

In 2010 and 2011, three studies found that medical errors were prevalent in the hospital setting:

  • The Office of the Inspector General (OIG) for the Department of Health and Human Services (HHS) in 2010 concluded that one-in-seven Medicare patients in hospital care experienced a serious adverse event. The OIG found these events contributed to the deaths of 1.5% of patients, and 5% of the adverse events were preventable.
  • A 2010 study of patients treated in North Carolina hospitals found that 18% experienced adverse events and 63% of these adverse events were preventable.  And of these adverse events, 2.4% caused or contributed to a patient’s death.
  • An April 2011 study in Health Affairs found that errors or adverse events occur in almost one-in-three hospital admissions.

What it all means

So if medical errors/adverse events aren’t decreasing, why are medical malpractice payments decreasing?

Simply, the vast majority of patients injured by medical malpractice aren’t being compensated.

To put it in perspective, out of the hundreds of thousands of annual avoidable adverse events (and tens or hundreds of thousands of deaths) the above studies attribute annually to medical mistakes, only 9,758 medical malpractice payments were made on behalf of doctors in 2011.

On average, half the value of medical malpractice payments is intended for future medical expenses. So when victims of medical malpractice aren’t financially compensated their future medical costs must be paid by someone. According to the Public Citizen report, that someone is the victims themselves or the medical system in the form of unreimbursed care.

The conclusion of the report:  “Policy makers and physicians need to dedicate themselves to pursuing patient safety measures with the same vigor they’ve applied to limiting patients’ legal rights.”

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