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MYTHBUSTER

THE TRUTH ABOUT MEDICAL MALPRACTICE LITIGATION

 

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 reporting.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. “With about ten times as many injuries as malpractice claims, the only conclusion possible is that injured patients rarely file lawsuits.”3  

FAR FROM BEING “BROKEN,” 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 “portraits of a malpractice system that is stricken with frivolous litigation are overblown.”4  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.
• “The profile of non-error claims we observed does not square with the notion of opportunistic trial lawyers pursuing questionable lawsuits in circumstances 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.”
• “Disputing and paying for errors account for the lion’s share of malpractice costs.”
• “Previous research has established that the great majority of patients who sustain a medical injury as a result of negligence do not sue. … [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.” 

THE VAST MAJORITY OF TRUE MEDICAL MALPRACTICE CASES SETTLE; “FRIVOLOUS” 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
• • According to a Bureau of Justice report 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, “Research 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.….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.”8
• Vidmar testified, “In interviews with liability insurers that I undertook in North Carolina and other states, the most consistent theme from them was: ‘We do not settle frivolous cases!’ 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.”9
• Vidmar further testified, “Without 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’s 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’s 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’s analysis of National Practitioner Data Bank (NPDB) data, “the 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 — a decline of 8 percent since 1991.”15
• 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 “the number of payments per 100,000 people in the U.S. also fell since 2001 – from 5.82 to 4.73 – a decline of 18.6 percent. Since 1991, the number of payments per 100,000 people declined more than 10 percent.”16
• According to a Bureau of Justice report 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 “research evidence indicates that outlier verdicts seldom withstand post verdict proceedings.… Post-trial reductions have been documented 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. … 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’ 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’s 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, “the magnitude of jury awards in medical malpractice tort cases positively correlated with the severity of the plaintiffs’ 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.”22

• 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 proportional 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 “vast majority of punitive dollars were uncollectible due to post-trial reversals, settlements, and defendant insolvency.”27
  

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 “rarely won damages at trial, prevailing in only 21 percent of verdicts as compared with 61 percent of claims resolved out of court.”29
• Duke University Law professor Neil Vidmar testified before Congress, “Interviews with North Carolina jurors who decided medical malpractice cases showed that jurors viewed the plaintiffs’ 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’s 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. ”30 

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, “In the absence of a comprehensive social insurance system, the patient’s right to safety can be enforced only by a legal claim against the hospital. … [M]ore liability suits against hospitals may be necessary to motivate hospital boards to take patient safety more seriously.… 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.”

 

A SMALL PERCENTAGE OF DOCTORS ARE RESPONSIBLE FOR MOST MALPRACTICE PAYMENTS.

• From 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 – 82 percent – never made a malpractice payment.34 

FEAR OF LITIGATION IS NOT THE MAIN REASON DOCTORS DO NOT REPORT ERRORS.

• According to a recent study by Dr. Thomas Gallagher, a University of Washington internal-medicine physician and co-author of two studies published in the Archives of Internal Medicine, “Comparisons of how Canadian and U.S. doctors disclose mistakes point to a ‘culture of medicine,’ not lawyers, for their behavior.” 35  In Canada, there are no juries, non-economic awards are severely capped and “if patients lose their lawsuits, they have to pay the doctors' legal bills… yet “doctors are just as reluctant to fess up to mistakes.”  Moreover, “doctors' thoughts on how likely they were to be sued didn't affect their decisions to disclose errors.” The authors believe “the main culprit is a ‘culture of medicine,’ which starts in medical school and instills a ‘culture of perfectionism’ that doesn't train doctors to talk about mistakes.”36
• Research by George J. Annas, J.D., M.P.H. “found that only one quarter of doctors disclosed errors to their patients, but “the result was not that much different in New Zealand, a country that has had no-fault malpractice insurance” [i.e., no litigation against doctors] for decades. In other words, “There are many reasons why physicians do not report errors, including a general reluctance to communicate with patients and a fear of disciplinary action or a loss of position or privileges.”37 

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 “losses” (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 “Malpractice costs account for less than 2 percent of [health care] spending,” and that all the provisions of the federal medical malpractice bill, including a $250,000 cap on non-economic damages, “would 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.”39 

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, “To Err is Human” (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’s 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 “Medical Liability: New Ideas for Making the System Work Better for Patients,” June 22, 2006 at 5.)

3 David A. Hyman and Charles Silver, “Medical Malpractice Litigation and Tort Reform: It's the Incentives, Stupid,”59 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., “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,” New England Journal of Medicine, May 11, 2006.

5 David M.  Studdert, Michelle Mello, et al., “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,” 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, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” June 22, 2006 at 17. (citations omitted).

7 Bureau of Justice Statistics, U.S. Department of Justice, “Medical Malpractice Insurance Claims in Seven States, 2000-2004,” 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 report analyzes data in the National Practitioner Data Bank Public Use File, dated 31 December 2005.)

12 Ibid. at 4.

13 “Tort Trials and Verdicts in Large Counties, 2001,” U.S. Department of Justice, Bureau of Justice Statistics, 206240 (November 2004), at 4.

14 “Tort Trials and Verdicts in Large Counties, 2001,” 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 report 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, “Medical Malpractice Insurance Claims in Seven States, 2000-2004,” 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, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” 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/reference_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, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” June 22, 2006 at 10.

23 Bureau of Justice Statistics, U. S. Department of Justice, “Selected Findings, Civil Justice Survey of State Courts, 2001, Punitive Damage Awards in Large Counties, 2001,” NCJ 208445 (March 2005) at 3.

24  Thomas Koenig & Michael Rustad, “Reconceptualizing Punitive Damages in Medical Malpractice: Targeting Amoral Corporations, Not ‘Moral Monsters,’” 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, “Tort Trials and Verdicts in Large Counties, 2001,” NCJ 206240 (Nov. 2004) at 4, 7.

29 David M.  Studdert, Michelle Mello, et al., “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,” 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, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” 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, “Hearing on Medical Liability: New Ideas for Making the System Work Better for Patients,” June 22, 2006 at 10 (“The overwhelming number of the judges gave the civil jury high marks for competence, diligence, and seriousness, even in complex cases …Systematic 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.… We also found that jury awards of prevailing plaintiffs in malpractice cases were correlated with the severity of the injury.”)(citations omitted);  Peters Jr., Philip G., “Doctors & Juries,” U of Missouri-Columbia School of Law Legal Studies Research Paper No. 2006-33 Available at SSRN: http://ssrn.com/abstract=929474 (“Four important 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 ‘profiting’ from an injury, and the jury's willingness to give physicians the "benefit of the doubt" when the evidence of negligence is conflicting.”)  See also, Marc Galanter, “Real World Torts: An Antidote to Anecdote,” 55 Md. L. Rev.1093, 1109, note 45 (1996), citing Michael J. Saks, Small-Group Decision Making and Complex Information Tasks (1981); Robert MacCoun, “Inside the Black Box: What Empirical Research Tells Us About Decisionmaking by Civil Juries,” in Verdict: Assessing the Civil Jury System 137 (Brookings Institution, Robert E. Litan ed., 1993); Christy A. Visher, “Juror Decision Making: The Importance of Evidence,” 11 Law & Hum. Behav. 1 (1987); Richard O. Lempert, “Civil Juries and Complex Cases: Let’s Not Rush to Judgment,” 80 Mich. L. Rev. 68 (1981).

32 George J. Annas, J.D., M.P.H., “The Patient’s Right to Safety – Improving the Quality of Care through Litigation against Hospitals,” New England Journal of Medicine, May 11, 2006.

33 Public Citizen, The Great Medical Malpractice Hoax, at 12.

34 Ibid.

35 Carol M. Ostrom, “Lawsuit fears aren't reason for docs' silence, studies say,” Seattle Times, August 17, 2006 , citing from Thomas Gallagher, M.D., et al, “Choosing your Words Carefully: How Physicians Would Disclose Harmful Medical Errors to Patients,” Archives of Internal Medicine, Aug. 14, 2006.

36 Ibid.

37 George J. Annas, J.D., M.P.H., “The Patient’s Right to Safety – Improving the Quality of Care through Litigation against Hospitals,” New England Journal of Medicine, May 11, 2006.

38 See, Americans for Insurance Reform, “Think Malpractice is Driving Up Health Care Costs? Think Again,” http://www.insurance-reform.org/pr/AIRhealthcosts.pdf

39 Congressional Budget Office, Limiting Tort Liability for Medical Malpractice 1, 6 (Jan. 8, 2004).