'Catastrophic' malpractice payouts add little to health care's rising costs

April 30, 2013

Efforts to lower health care costs in the United States have focused at times on demands to reform the medical malpractice system, with some researchers asserting that large, headline-grabbing and "frivolous" payouts are among the heaviest drains on health care resources. But a new review of malpractice claims by Johns Hopkins researchers suggests such assertions are wrong.

In their review of malpractice payouts over $1 million, the researchers say those payments added up to roughly $1.4 billion a year, making up far less than 1 percent of national medical expenditures in the United States.

"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 , 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."

Called catastrophic claims, payouts over $1 million are more likely to occur when a patient who is killed or injured is under the age of 1; develops quadriplegia, 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 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, and catastrophic claims made up 7.9 percent (6,130 payouts). The seven-year nationwide total of catastrophic payouts was $9.8 billion, representing 36.2 percent of the $27 billion worth of total claims paid over that time period.

The most common allegations associated with a catastrophic payout were diagnosis-related (34.2 percent), obstetrics-related (21.8 percent) and surgery-related (17.8 percent) 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 percent of catastrophic payouts involved a physician with a previous claim in the database. The largest payout in the study was $31 million.

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 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.

Explore further: Diagnostic errors more common, costly and harmful than treatment mistakes

Related Stories

Diagnostic errors more common, costly and harmful than treatment mistakes

April 22, 2013
In reviewing 25 years of U.S. malpractice claim payouts, Johns Hopkins researchers found that diagnostic errors—not surgical mistakes or medication overdoses—accounted for the largest fraction of claims, the most severe ...

Malpractice study: Surgical 'never events' occur at least 4,000 times per year

December 19, 2012
After a cautious and rigorous analysis of national malpractice claims, Johns Hopkins patient safety researchers estimate that a surgeon in the United States leaves a foreign object such as a sponge or a towel inside a patient's ...

Study: Only 1 in 5 medical malpractice cases pay

August 17, 2011
(AP) -- Only 1 in 5 malpractice claims against doctors leads to a settlement or other payout, according to the most comprehensive study of these claims in two decades.

True cost of medical malpractice

August 23, 2011
The debates over health care reform may soon become more informed. A new study undertaken by a group of researchers, including Harvard Kennedy School (HKS) Professor Amitabh Chandra, provides a detailed snapshot of U.S. medical ...

Looming malpractice: Waiting for claims resolution takes up more than ten per cent of the average medical career

January 7, 2013
The average physician can expect to spend nearly 11 per cent of his or her career with a malpractice claim waiting to be resolved. Some specialists will spend nearly a third of their careers with open claims.

Recommended for you

Excess dietary manganese promotes staph heart infection

September 21, 2017
Too much dietary manganese—an essential trace mineral found in leafy green vegetables, fruits and nuts—promotes infection of the heart by the bacterium Staphylococcus aureus ("staph").

Higher manganese levels in children correlate with lower IQ scores, study finds

September 21, 2017
A study led by environmental health researchers at the University of Cincinnati (UC) College of Medicine finds that children in East Liverpool, Ohio with higher levels of Manganese (Mn) had lower IQ scores. The research appears ...

One e-cigarette with nicotine leads to adrenaline changes in nonsmokers' hearts

September 20, 2017
A new UCLA study found that healthy nonsmokers experienced increased adrenaline levels in their heart after one electronic cigarette (e-cigarette) with nicotine but there were no increased adrenaline levels when the study ...

Higher levels of fluoride in pregnant woman linked to lower intelligence in their children

September 20, 2017
Fluoride in the urine of pregnant women shows a correlation with lower measures of intelligence in their children, according to University of Toronto researchers who conducted the first study of its kind and size to examine ...

Researchers see popular herbicide affecting health across generations

September 20, 2017
First, the good news. Washington State University researchers have found that a rat exposed to a popular herbicide while in the womb developed no diseases and showed no apparent health effects aside from lower weight.

India has avoided 1 million child deaths since 2005, new study concludes

September 19, 2017
India has avoided about 1 million deaths of children under age five since 2005, driven by significant reductions in mortality from pneumonia, diarrhea, tetanus and measles, according to new research published today.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.