1. Too Many “Frivolous” Lawsuits
The reality is that there is not an epidemic of medical negligence lawsuits. According to researchers at Harvard University, only one in eight people injured by medical negligence files a malpractice claim.[i]
The number of medical negligence filings has steadily declined in the last decade. Between 1997 and 2006, the number of medical negligence filings dropped eight percent. For those that do file, researchers at the Harvard School of Public Health examined 1,400 closed medical negligence claims and found that 97 percent were meritorious and 80 percent involved death or serious injury. [ii] The truth is medical malpractice claims are costly for the plaintiff and long and hard fought cases. Those that are filed are meritorious and worth the time and money to help the victim. In the long run, these suits help the system.
2. Malpractice Myth – Lawsuits Increase Healthcare Costs
One of the principal myths surrounding medical malpractice is its effect on overall health care costs. Medical malpractice is actually a tiny percentage of health care costs. According to the Congressional Budget Office, it is less than 2 percent of overall health care spending.
Compare this to the profits of the hospital and insurance industries. Heath care insurance industry profits rose by 56% in 2009. The top five for-profit health insurers made $12.2 billion. Similarly, the medical malpractice insurance industry has also enjoyed remarkable profits in recent years. The top ten medical malpractice insurance companies made over $1 billion in profit in 2009. The average profit rate of the top 10 medical malpractice companies was eight times greater than the average for Fortune 500 companies.[iii]
One real and undisputed driver of health care costs that can and should be reduced is medical error. Each year, 98,000 people die from preventable medical errors in American hospitals, adding $29 billion in additional costs to the U.S. health care system.
3. Tort reform and Insurance Rates
Tort reforms are passed under the guise that they will lower physicians’ liability premiums. This does not happen. While insurers do pay out less money when damage awards are capped, they do not pass the savings along to doctors by lowering premiums. Researchers at the National Bureau of Economic Research (NBER) report that malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums. [iv] There is little variance in premium levels between states that cap damages and those that do not. In fact, in 2009, the average liability premium in states without caps on damages was lower than the average premium in states with caps on damages.[v] The way to keep down cost and effect medical errors is not to reform the legal system by depriving injured patients of just compensation from companies that have agreed to insure doctors for risk.
[i] Too Err is Human, Institute of Medicine, November 1999..
[ii] Claims, Errors & Compensation Payments in Medical Malpractice Litigation, New England Journal Of Medicine, May 11, 2006.
[iii] Congressional Budget Office, October 9, 2009
[iv] Adverse Events in Hospitals: National Incidence Among Medicare Beneficiaries, Department of Health and Human Services Office of the Inspector General, November 2010.
[v] Annual Report, 2006, National Practitioner Databank.