A study says 'not much,' but makes a case for reducing errors that lead to claims
Clik here to view.
of ConsumerAffairsImage may be NSFW.
Clik here to view.
You rarely hear a conversation about the cost of healthcare without the subject of "frivolous" malpractice payouts coming up. But just how much of a drain on healthcare resources are they?
Even though such payments sometimes make big headlines, Johns Hopkins researchers suggest they don't amount to that much when looking at the big picture.
The researchers, who reviewed malpractice payouts over $1 million, say those payments added up to roughly $1.4 billion a year -- far less than 1% of U.S. national medical expenditures.
"The notion that frivolous claims are routinely resulting in $100 million payouts is not true," says study leader Marty Makary, M.D., M.P.H., an associate professor of surgery and health policy at the Johns Hopkins University School of Medicine. "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."
Big payments for a reason
Payouts over $1 million -- called catastrophic claims -- are more likely to occur when a patient who is killed or injured is under the age of 1; develops quadriplegia, brain damage or the need for lifelong care as a result of the malpractice; or when the claim results from a problem related to anesthesia, the researchers found in a study published online in the Journal for Healthcare Quality.
Makary and his colleagues reviewed nationwide medical malpractice claims using the National Practitioner Data Bank, an electronic repository of all malpractice settlements or judgments since 1986. They looked at data from 2004 to 2010, choosing a 2004 start date because that is when data regarding the age and gender of patients and severity of injury became available for the first time.
The information includes only payments made on behalf of individual providers, not hospitals or other corporations, meaning the number of payouts may be underestimated by 20 percent, Makary says.
Over that period, 77,621 claims were paid, with catastrophic claims making up 7.9% (6,130 payouts). The seven-year nationwide total of catastrophic payouts was $9.8 billion, representing 36.2% of the $27 billion worth of total claims paid over that time period.
Diagnosis-related claims
The most common charges associated with a catastrophic payout were diagnosis-related (34.2%), obstetrics-related (21.8%) and surgery-related (17.8%) events. Errors in diagnosis showed twice the odds of a catastrophic payout compared with equipment- or product-related errors and were associated with a roughly $83,000 larger payment.
The age of the physician was unrelated to the likelihood of a claim, suggesting inexperience is not necessarily a factor. But 37% of catastrophic payouts involved a physician with a previous claim in the database. The largest payout in the study was $31 million.
Defensive medicine
Makary says the data suggest that the focus of legal reform efforts should be on doctor protections aimed at reducing defensive medicine rather than the creation of malpractice caps.
He says his findings argue for more research to determine what interventions might prevent the type of errors that result in catastrophic payouts, with the overall goal of improving patient safety and reducing costs at the same time.
But real cost reductions, he says, will come from reducing the overuse of diagnostic tests and procedures.