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Medical Malpractice Payments Hit Record Lows

Injured patients receiving less compensation, report claims

July 7, 2009
Medical malpractice payments were at or near record lows in 2008, but a study released by Public Citizen suggests the decline almost certainly indicates that a lower percentage of injured patients received compensation, not that health safety has improved.

Medical malpractice is so common, and litigation over it so rare, that between three and seven Americans die from medical errors for every one who receives a payment for any malpractice claim, according to Public Citizen’s analysis of medical malpractice payment data and the best available patient safety estimates.

For the third straight year, 2008 saw the lowest number of medical malpractice payments since the federal government's National Practitioner Data Bank began tracking such data in 1990. The 11,037 payments in 2008 were 30.7 percent lower than the average number of payments recorded by the NPDB in all previous years.

Ratios of payments per capita and per physician have fallen even lower compared with historical norms. There were 13.5 payments per million physicians in 2006 (the most recent year for which the number of physicians is available), which is 29.2 percent lower than the average in previous years

The value of payments in 2008 (as distinct from the number of payments) was the lowest or second lowest on record, depending on the method used to adjust for inflation.

The cost of the medical malpractice liability system -- if measured broadly by adding all malpractice insurance premiums -- fell to less than 0.6 percent of the $2.1 trillion in total national health care costs in 2006, the most recent year for which the necessary data to make such comparisons are available.

The cost of actual malpractice payments fell to 0.18 percent -- one-fifth of 1 percent -- of all health care costs in 2006. Annual malpractice payments have subsequently fallen from $3.9 billion in 2006 to $3.6 billion in 2008, but comparative data on total health care costs are not available.

"Any way you measure it, medical liability accounts for less than 1 percent of the country's health care costs, and the vast majority of victims receive no compensation whatsoever," said David Arkush, director of Public Citizen's Congress Watch division. "These are people who died or were left with serious permanent injuries -- out of work, with enormous medical costs for the rest of their lives -- and they and their families are getting nothing from the doctors and hospitals responsible."

The amount paid out for medical malpractice generally goes to patients with the most serious injuries. More than 80 percent of the money paid out for medical malpractice in 2008 was for cases involving "significant permanent injuries"; "major permanent injuries"; injuries resulting in quadriplegia, brain damage or the need for permanent care; or death, according to NPDB reporting.

Despite the hysteria surrounding debates over medical malpractice litigation, experts have repeatedly concluded that several times as many patients suffer avoidable injuries as those who sue.

The best known such finding was included in the Institute of Medicine's (IOM) 1999 study, "To Err Is Human," which concluded that between 44,000 and 98,000 Americans die every year because of avoidable medical errors.

Fewer than 15,000 people (including those with non-fatal outcomes) received compensation for medical malpractice that year, and in 2008, the number receiving compensation fell to just over 11,000.

There is no evidence that there are fewer errors today. Most of the IOM’s safety recommendations have been ignored. Meanwhile, various safety indicators continue to raise alarms.

For example, the Joint Commission, which accredits hospitals, learned about 116 occasions in which surgeons operated on the wrong part of a patient’s body in 2008 and 71 times in which foreign objects were left inside patients’ bodies. Health experts call these "never events," meaning that they simply should not happen at all.

Proposals to limit patients’ legal rights have sprung up in the debate over health reform. The most popular idea this year is to establish special tribunals that would theoretically offer payments to more patients but in smaller amounts.

Policy makers who wish to cut costs should steer clear of these proposals, Arkush said. The high volume of medical errors and the current infrequency of payments to victims ensure that proposals to increase the number of payments would inevitably cost far more than the current system.

The only economically feasible and, indeed, humane way to improve the system is to reduce the number of senseless and tragic medical errors in our hospitals. In its report, Public Citizen calls on Congress to put safety measures in place that would set the nation on course to meet the IOM’s goal of cutting the number of avoidable deaths in half in five years.

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