THE TRUTH ABOUT MEDICAL MALPRACTICE LITIGATION
MEDICAL MALPRACTICE PAYOUTS ARE FAR SMALLER THAN COMMONLY BELIEVED AND
COMPENSATE FOR SERIOUS INJURIES.
MEDICAL MALPRACTICE CASES REPRESENT A TINY PERCENTAGE OF TORT CASES
FILED EACH YEAR. In 2004, medical malpractice cases accounted for an
average of only four percent of tort cases in 13 states re****ting.1
CONTRARY TO POPULAR MYTH, FEW INJURED PATIENTS FILE LAWSUITS.
Between 44,000 and 98,000 Americans die each year (and 300,000 are
injured) due to medical errors in hospitals alone. Yet eight times as
many patients are injured as ever file a claim; 16 times as many
suffer injuries as receive any compensation.2
At the highest level, the estimated number of medical injuries (in
hospitals and otherwise) is more than one million per year;
approximately 85,000 malpractice suits are filed annually. =93With about
ten times as many injuries as malpractice claims, the only conclusion
possible is that injured patients rarely file lawsuits.=943
FAR FROM BEING =93BROKEN,=94 THE CURRENT MEDICAL MALPRACTICE SYSTEM WORKS
WELL. The Harvard School of Public Health recently found that the
current system works: legitimate claims are being paid, non-legitimate
claims are generally not being paid, and =93****traits of a malpractice
system that is stricken with frivolous litigation are overblown.=944
The authors found:
Sixty-three percent of the injuries were judged to be the result of
error and most of those claims received compensation; on the other
hand, most individuals whose claims did not involve errors or injuries
received nothing.
Eighty percent of claims involved injuries that caused significant or
major disability or death.
=93The profile of non-error claims we observed does not square with the
notion of op****tunistic trial lawyers pursuing questionable lawsuits
in cir***stances in which their chances of winning are reasonable and
prospective returns in the event of a win are high. Rather, our
findings underscore how difficult it may be for plaintiffs and their
attorneys to discern what has happened before the initiation of a
claim and the acquisition of knowledge that comes from the
investigations, consultation with experts, and sharing of information
that litigation triggers.=94
=93Disputing and paying for errors account for the lion=92s share of
malpractice costs.=94
=93Previous research has established that the great majority of patients
who sustain a medical injury as a result of negligence do not sue. =85
[F]ailure to pay claims involving error adds to a larger phenomenon of
underpayment generated by the vast number of negligent injuries that
never surface as claims.=94
THE VAST MAJORITY OF TRUE MEDICAL MALPRACTICE CASES SETTLE;
=93FRIVOLOUS=94 CASES DO NOT SETTLE.
In the Harvard closed claims study, only fifteen percent of claims
were decided by trial verdict.5 Other research shows that 90 percent
of cases are settled without jury trial, with some estimates
indicating that the figure is as high as 97 percent.6
=95 According to a Bureau of Justice re****t that examined medical
malpractice insurance claims in seven states, between 2000 and 2004,
about 95 percent of medical malpractice insurance claims settled prior
to trial. 7
As Duke Law professor Neil Vidmar, who has extensively studied medical
malpractice litigation, recently testified in the U.S. Senate,
=93Research on why insurers actually settle cases indicates that the
driving force in most instances is whether the insurance company and
their lawyers conclude, on the basis of their own internal review,
that the medical provider was negligent.=85.An earlier study by
Rosenblatt and Hurst examined 54 obstetric malpractice claims for
negligence. For cases in which settlement payments were made there
was general consensus among insurance company staff, medical experts
and defense attorneys that some lapse in the standard of care had
occurred. No payments were made in the cases in which these various
reviewers decided there was no lapse in the standard of care.=948
Vidmar testified, =93In interviews with liability insurers that I
undertook in North Carolina and other states, the most consistent
theme from them was: =91We do not settle frivolous cases!=92 The insurers
indicated that there are minor exceptions, but their policy on
frivolous cases was based on the belief that if they ever begin to
settle cases just to make them go away, their credibility will be
destroyed and this will encourage more litigation.=949
Vidmar further testified, =93Without question the threat of a jury trial
is what forces parties to settle cases. The presence of the jury as an
ultimate arbiter provides the incentive to settle but the effects are
more subtle than just negotiating around a figure. The threat causes
defense lawyers and the liability insurers to focus on the acts that
led to the claims of negligence.10
THE NUMBER OF MEDICAL MALPRACTICE PAYMENTS IS DECLINING.
According to Public Citizen=92s analysis of National Practitioner Data
Bank (NPDB) data, between 1991 and 2005, the total number of
malpractice payments made on behalf of doctors declined 15.4 percent
(with judgments and settlements).11
Public Citizen=92s analysis also found that between 1991 and 2005, the
number of malpractice payments per 100,000 Americans dropped more than
ten percent.12
MEDICAL MALPRACTICE PAYOUTS ARE FAR SMALLER THAN COMMONLY BELIEVED AND
COMPENSATE FOR SERIOUS INJURIES.
Verdicts and Payouts.
In 2001, the latest year studied by the U.S. Department of Justice,
median awards in medical malpractice cases (jury and bench trials) was
$422,000.13 In jury trials, the median was $431,000.14
According to Public Citizen=92s analysis of National Practitioner Data
Bank (NPDB) data, =93the annual average payment for a medical
malpractice verdict has not exceeded $1 million in real dollars since
the beginning of the NPDB. The average payment for a medical
malpractice verdict in 1991 was $284,896. In 2005, the average was
$461,524. Adjusting for inflation, however, shows that the average is
actually declining. The 2005 average adjusted for inflation is only
$260,890 =97 a decline of 8 percent since 1991.=9415
Public Citizen also found that the total number of malpractice
payments made on behalf of doctors, including judgments and
settlements, declined 15.4 percent from 2001-2005 (from 16,588 in 2001
to 14,033 in 2005) and =93the number of payments per 100,000 people in
the U.S. also fell since 2001 =96 from 5.82 to 4.73 =96 a decline of 18.6
percent. Since 1991, the number of payments per 100,000 people
declined more than 10 percent.=9416
According to a Bureau of Justice re****t that examined medical
malpractice insurance claims in seven states between 2000 and 2004,
most medical malpractice claims were closed without any compensation
provided to those claiming a medical injury.17
Vidmar testified =93research evidence indicates that outlier verdicts
seldom withstand post verdict proceedings.=85 Post-trial reductions have
been do***ented in a number of studies. I and two colleagues found
that some of the largest malpractice awards in New York ultimately
resulted in settlements between five and ten percent of the original
jury verdict. A study that I conducted on medical malpractice awards
in Pennsylvania and a study of Texas verdicts found similar
reductions. =85 My recent research on medical malpractice verdicts in
Illinois found that, on average, final payments to plaintiffs were
substantially lower than the jury verdicts. This does not mean that
the original verdict was too high. Rather, needing money immediately
and wanting to avoid a possibly lengthy appeal process the plaintiffs
settled for the health providers=92 insurance policy limit. Generally
speaking, the larger the award, the greater the reduction in the
settlement following trial.18
Total Payouts. Total medical malpractice payouts, for injuries and
deaths caused by medical negligence in the nation, have recently
hovered between $5 billion and $6 billion annually.19 This is less
than half of what Americans pay for dog and cat food each year.20
Severity of injuries.
Public Citizen=92s analysis of NPDB statistics shows that patients do
not win large jury awards for insignificant claims and that payments
usually correspond with injury severity. In 2005, more than 64 percent
of payments involved death or significant injury, less than one-third
were for insignificant injury, and less than three percent were for
million-dollar verdicts.21
According to Duke University Law Professor Neil Vidmar, =93the magnitude
of jury awards in medical malpractice tort cases positively correlated
with the severity of the plaintiffs=92 injuries, except that injuries
resulting in death tended to result in awards substantially lower than
injuries resulting in severe permanent injury, such as quadriplegia. I
and two colleagues conducted a study of malpractice verdicts in New
York, Florida, and California. We also found that jury awards of
prevailing plaintiffs in malpractice cases were correlated with the
severity of the injury.=9422
Punitive damages.
In medical malpractice cases in 2001, the most recent year studied by
the U.S. Department of Justice, punitive damages were awarded in only
4.9 percent of cases with plaintiff winners.23
In medical malpractice cases between 1963 and 1993 studied by
professors Koenig and Rustad, punitive verdicts were largely
pro****tional to compensatory awards, with the median ratio of punitive
damages to compensatory damages awarded at trial 1.21 to 1.24 They
also found that punitive damages were only levied in instances of
outrageous behavior.25 In addition, judges changed 42 percent of
punitive verdicts after trial. Nearly ten percent (26 out of 270) of
cases involving punitive damages were reversed by appellate courts.26
Moreover, the =93vast majority of punitive dollars were uncollectible
due to post-trial reversals, settlements, and defendant
insolvency.=9427
CONTRARY TO POPULAR NOTIONS, IT IS DIFFICULT FOR PATIENTS TO WIN
MEDICAL MALPRACTICE CASES BEFORE JURIES.
In 2001, the latest year studied by the U.S. Department of Justice,
patients won before judges 50 percent of the time, while only winning
26.3 percent of cases before juries, dropping from 30.5 percent in
1992.28
According to the Harvard School of Public Health, patients =93rarely won
damages at trial, prevailing in only 21 percent of verdicts as
compared with 61 percent of claims resolved out of court.=9429
Duke University Law professor Neil Vidmar testified before Congress,
=93Interviews with North Carolina jurors who decided medical malpractice
cases showed that jurors viewed the plaintiffs=92 claims with great
skepticism. Jurors expressed their attitudes in two main themes:
first, too many people want to get something for nothing, and second,
most doctors try to do a good job and should not be blamed for a
simple human misjudgment. This does not mean that in every case jurors
held these views. Sometimes, evidence of the doctor=92s behavior caused
jurors to be angry about the negligence. However, even in these latter
cases the interviews indicated that the jurors had approached the case
with open minds. =9430
JURIES ARE COMPETENT AND ABLE TO HANDLE MEDICAL MALPRACTICE CASES.
Consistent empirical studies show juries to be competent, effective,
and fair decision makers able to handle complex cases.31
LITIGATION IMPROVES PATIENT SAFETY. The New England Journal of
Medicine confirmed in a breakthrough article by George J. Annas, J.D.,
M.P.H., that litigation against hospitals improves the quality of care
for patients.32 The author wrote, =93In the absence of a comprehensive
social insurance system, the patient=92s right to safety can be enforced
only by a legal claim against the hospital. =85 [M]ore liability suits
against hospitals may be necessary to motivate hospital boards to take
patient safety more seriously.=85 Anesthesiologists were motivated by
litigation to improve patient safety. As a result, this profession
implemented 25-years-ago a program to make anesthesia safer for
patients and as a result, the risk of death from anesthesia dropped
from 1 in 5000 to about 1 in 250,000.=94
A SMALL PERCENTAGE OF DOCTORS ARE RESPONSIBLE FOR MOST MALPRACTICE
PAYMENTS.
=46rom 1991 to 2005, only 5.9 percent of doctors were responsible for
57.8 percent of malpractice payments. Each of those doctors made at
least two payments.33
Since the creation of the National Practitioner Data Bank in 1990, the
large majority of doctors =96 82 percent =96 never made a malpractice
payment.34
FEAR OF LITIGATION IS NOT THE MAIN REASON DOCTORS DO NOT RE****T
ERRORS.
According to a recent study by Dr. Thomas Gallagher, a University of
Wa****ngton internal-medicine physician and co-author of two studies
published in the Archives of Internal Medicine, =93Comparisons of how
Canadian and U.S. doctors disclose mistakes point to a =91culture of
medicine,=92 not lawyers, for their behavior.=94 35 In Canada, there are
no juries, non-economic awards are severely capped and =93if patients
lose their lawsuits, they have to pay the doctors' legal bills=85 yet
=93doctors are just as reluctant to fess up to mistakes.=94 Moreover,
=93doctors' thoughts on how likely they were to be sued didn't affect
their decisions to disclose errors.=94 The authors believe =93the main
culprit is a =91culture of medicine,=92 which starts in medical school and
instills a =91culture of perfectionism=92 that doesn't train doctors to
talk about mistakes.=9436
Research by George J. Annas, J.D., M.P.H. =93found that only one quarter
of doctors disclosed errors to their patients, but =93the result was not
that much different in New Zealand, a country that has had no-fault
malpractice insurance=94 [i.e., no litigation against doctors] for
decades. In other words, =93There are many reasons why physicians do not
re****t errors, including a general reluctance to communicate with
patients and a fear of disciplinary action or a loss of position or
privileges.=9437
MEDICAL MALPRACTICE CLAIMS AND PREMIUMS ARE A TINY PERCENTAGE OF THE
TOTAL COSTS OF HEALTH CARE IN THIS COUNTRY.
Medical malpractice payouts are less than one percent of total U.S.
health care costs. All =93losses=94 (verdicts, settlements, legal fees,
etc.) have stayed under one percent for the last 18 years. Moreover,
medical malpractice premiums are less than one percent of total U.S.
health care costs as well. Dropping for nearly two decades,
malpractice premiums have stayed below one percent of health care
costs.38
The Congressional Budget Office found that =93Malpractice costs account
for less than 2 percent of [health care] spending,=94 and that all the
provisions of the federal medical malpractice bill, including a
$250,000 cap on non-economic damages, =93would lower health care costs
by only about 0.4 percent to 0.5 percent, and the likely effect on
health insurance premiums would be comparably small.=9439
January 2007
NOTES
1 Examining the Work of State Courts, 2005, A National Perspective
from the Court Statistics Project (2006) at 29.
2 National Academy of Sciences Institute of Medicine, =93To Err is
Human=94 (1999); Harvard Medical Practice Study (1990). In 2004,
HealthGrades, Inc., which rates hospitals for insurers and health
plans, concluded, from a study of Medicare records for all fifty
states from 2000-2002, that the Institute of Medicine=92s high figure of
98,000 was too low and that a figure of 195,000 annual deaths was more
accurate. (Testimony of Neil Vidmar of Duke Law School before The
Senate Committee on Health, Education, Labor and Pensions, Hearing on
=93Medical Liability: New Ideas for Making the System Work Better for
Patients,=94 June 22, 2006 at 5.)
3 David A. Hyman and Charles Silver, =93Medical Malpractice Litigation
and Tort Reform: It's the Incentives, Stupid,=9459 Vand. L. Rev. 1085,
1089 (May 2006) (citing Brian Ostrom, Neal Kauder & Neil LaFontain,
Examining the Work of State Courts (2003) at 23).
4 David M. Studdert, Michelle Mello, et al., =93Claims, Errors, and
Compensation Payments in Medical Malpractice Litigation,=94 New England
Journal of Medicine, May 11, 2006.
5 David M. Studdert, Michelle Mello, et al., =93Claims, Errors, and
Compensation Payments in Medical Malpractice Litigation,=94 New England
Journal of Medicine, May 11, 2006.
6 Testimony of Neil Vidmar, Russell M. Robinson, II Professor of Law,
Duke Law School before The Senate Committee on Health, Education,
Labor and Pensions, =93Hearing on Medical Liability: New Ideas for
Making the System Work Better for Patients,=94 June 22, 2006 at 17.
(citations omitted).
7 Bureau of Justice Statistics, U.S. Department of Justice, =93Medical
Malpractice Insurance Claims in Seven States, 2000-2004,=94 NCJ 216339
(Mar. 2007) at 7.
8 Ibid. at 17-18, 22.
9 Ibid. at 23.
10 Ibid. at 21.
11 Public Citizen, Congress Watch, The Great Medical Malpractice Hoax:
NPDB Data Continue to Show Medical Liability System Produces Rational
Outcomes, (January 2007) at 2. (This re****t analyzes data in the
National Practitioner Data Bank Public Use File, dated 31 December
2005.)
12 Ibid. at 4.
13 =93Tort Trials and Verdicts in Large Counties, 2001,=94 U.S. Department
of Justice, Bureau of Justice Statistics, 206240 (November 2004), at
4.
14 =93Tort Trials and Verdicts in Large Counties, 2001,=94 U.S. Department
of Justice, Bureau of Justice Statistics, 206240 (November 2004), at
7.
15 Public Citizen, Congress Watch, The Great Medical Malpractice Hoax:
NPDB Data Continue to Show Medical Liability System Produces Rational
Outcomes, (January 2007) at 5, 9. (This re****t analyzes data in the
National Practitioner Data Bank Public Use File, dated 31 December
2005.)
16 Ibid. at 2-5.
17 Bureau of Justice Statistics, U.S. Department of Justice, =93Medical
Malpractice Insurance Claims in Seven States, 2000-2004,=94 NCJ 216339
(Mar. 2007) at 1.
18 Testimony of Neil Vidmar, Russell M. Robinson, II Professor of
Law, Duke Law School before The Senate Committee on Health, Education,
Labor and Pensions, =93Hearing on Medical Liability: New Ideas for
Making the System Work Better for Patients,=94 June 22, 2006 at 13.
19 See, Americans for Insurance Reform, Stable Losses/Unstable Rates,
2004, http://www.insurance-reform.org/StableLosses04.pdf.
20 The Pet Food Institute puts these figures at $13 to $14 billion
annually over the past few years. See,
http://www.petfoodinstitute.org/refe=
rence_pet_data.cfm
21 Public Citizen, Congress Watch, The Great Medical Malpractice Hoax:
NPDB Data Continue to Show Medical Liability System Produces Rational
Outcomes, (January 2007) at 2.
22 Testimony of Neil Vidmar, Russell M. Robinson, II Professor of Law,
Duke Law School before The Senate Committee on Health, Education,
Labor and Pensions, =93Hearing on Medical Liability: New Ideas for
Making the System Work Better for Patients,=94 June 22, 2006 at 10.
23 Bureau of Justice Statistics, U. S. Department of Justice,
=93Selected Findings, Civil Justice Survey of State Courts, 2001,
Punitive Damage Awards in Large Counties, 2001,=94 NCJ 208445 (March
2005) at 3.
24 Thomas Koenig & Michael Rustad, =93Reconceptualizing Punitive
Damages in Medical Malpractice: Targeting Amoral Cor****ations, Not
=91Moral Monsters,=92=94 47 Rutgers L. Rev. 975, 1009 (1995).
25 Ibid. at 15, 50-51.
26 Ibid. at15, 24, 43.
27 Ibid. at 15, 43.
28 Bureau of Justice Statistics, U.S. Department of Justice, =93Tort
Trials and Verdicts in Large Counties, 2001,=94 NCJ 206240 (Nov. 2004)
at 4, 7.
29 David M. Studdert, Michelle Mello, et al., =93Claims, Errors, and
Compensation Payments in Medical Malpractice Litigation,=94 New England
Journal of Medicine, May 11, 2006.
30 Testimony of Neil Vidmar, Russell M. Robinson, II Professor of
Law, Duke Law School before The Senate Committee on Health, Education,
Labor and Pensions, =93Hearing on Medical Liability: New Ideas for
Making the System Work Better for Patients,=94 June 22, 2006 at 8.
31 For an extensive list of studies demonstrating the competence of
juries, see, e.g., Testimony of Neil Vidmar, Russell M. Robinson, II
Professor of Law, Duke Law School before The Senate Committee on
Health, Education, Labor and Pensions, =93Hearing on Medical Liability:
New Ideas for Making the System Work Better for Patients,=94 June 22,
2006 at 10 (=93The overwhelming number of the judges gave the civil jury
high marks for competence, diligence, and seriousness, even in complex
cases =85Systematic studies of jury responses to experts lead to the
conclusion that jurors do not automatically defer to experts and that
jurors have a basic understanding of the evidence in malpractice and
other cases. Jurors understand that the adversary system produces
experts espousing opinions consistent with the side that called them
to testify. Moreover, jurors carefully scrutinize and compare the
testimony of opposing experts. They make their decisions through
collective discussions about the evidence.=85 We also found that jury
awards of prevailing plaintiffs in malpractice cases were correlated
with the severity of the injury.=94)(citations omitted); Peters Jr.,
Philip G., =93Doctors & Juries,=94 U of Missouri-Columbia School of Law
Legal Studies Research Paper No. 2006-33 Available at SSRN:
http://ssrn.com/abstract=3D929474
(=93Four im****tant findings emerge from
the data. First, negligence matters. Plaintiffs rarely win weak cases.
They have more success in toss-up cases, and fare best in cases with
strong evidence of medical negligence. Second, jury verdicts are most
likely to square with the opinions of experts hired to evaluate the
jury's performance when the evidence of provider negligence is weak.
This is the very set of cases that most worries critics of malpractice
litigation. Juries agree with expert reviewers in 80 to 90 percent of
these cases - a better agreement rate than physicians typically have
with each other. Third, jury verdicts are much more likely to deviate
from the opinion of an expert reviewer when there is strong evidence
of negligence. Doctors consistently win about 50 percent of the cases
which experts believe the plaintiffs should win. Fourth, the poor
success of malpractice plaintiffs in these cases strongly suggests the
presence of factors that systematically favor medical defendants in
the courtroom. The most promising explanations for that advantage are
the defendant's superior resources, the social standing of physicians,
social norms against =91profiting=92 from an injury, and the jury's
willingness to give physicians the "benefit of the doubt" when the
evidence of negligence is conflicting.=94) See also, Marc Galanter,
=93Real World Torts: An Antidote to Anecdote,=94 55 Md. L. Rev.1093, 1109,
note 45 (1996), citing Michael J. Saks, Small-Group Decision Making
and Complex Information Tasks (1981); Robert MacCoun, =93Inside the
Black Box: What Empirical Research Tells Us About Decisionmaking by
Civil Juries,=94 in Verdict: *****sing the Civil Jury System 137
(Brookings Institution, Robert E. Litan ed., 1993); Christy A. Visher,
=93Juror Decision Making: The Im****tance of Evidence,=94 11 Law & Hum.
Behav. 1 (1987); Richard O. Lempert, =93Civil Juries and Complex Cases:
Let=92s Not Rush to Judgment,=94 80 Mich. L. Rev. 68 (1981).
32 George J. Annas, J.D., M.P.H., =93The Patient=92s Right to Safety =96
Improving the Quality of Care through Litigation against Hospitals,=94
New England Journal of Medicine, May 11, 2006.
33 Public Citizen, The Great Medical Malpractice Hoax, at 12.
34 Ibid.
35 Carol M. Ostrom, =93Lawsuit fears aren't reason for docs' silence,
studies say,=94 Seattle Times, August 17, 2006 , citing from Thomas
Gallagher, M.D., et al, =93Choosing your Words Carefully: How Physicians
Would Disclose Harmful Medical Errors to Patients,=94 Archives of
Internal Medicine, Aug. 14, 2006.
36 Ibid.
37 George J. Annas, J.D., M.P.H., =93The Patient=92s Right to Safety =96
Improving the Quality of Care through Litigation against Hospitals,=94
New England Journal of Medicine, May 11, 2006.
38 See, Americans for Insurance Reform, =93Think Malpractice is Driving
Up Health Care Costs? Think Again,=94
http://www.insurance-reform.org/pr/AI=
Rhealthcosts.pdf
39 Congressional Budget Office, Limiting Tort Liability for Medical
Malpractice 1, 6 (Jan. 8, 2004).
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