A recent report by the consumer watchdog group Public Citizen exposes the falsity of the oft cited myth that medical malpractice payments and defensive medicine are principal factors behind out of control healthcare costs. The report is based on data released by the National Practitioner Data Bank (NPDB), a federal “confidential information clearinghouse” that maintains and tracks adverse actions against healthcare providers, including medical malpractice indemnity payments, licensure actions, loss of clinical privileges and other administrative discipline.
Among the highlights of the report are the following:
- The number of malpractice payments made on behalf of physicians to injured patients has fallen for the past nine (9) consecutive years, and the gross number of such payments in 2012 is the lowest since 1990 (the year the NPDB began tracking these payments);
- Likewise, the value of payments dropped for the 9th straight year in 2012 and was the lowest since 1998. When adjusted for inflation, the value of malpractice payments was the lowest in the history of the NPDB;
- The total cost of medical malpractice litigation, including payments to claimants as well as litigation and insurance administrative costs, constituted just 0.11% (just over one tenth of one percent) of total U.S. health care costs in 2012;
- 81% of the money paid to compensate victims or their families for harms defined by the NPDB as “significant permanent injuries” – that is, quadriplegia, brain damage, injuries requiring lifelong care, and death;
- Despite a 28.8% drop in medical malpractice payments between 2003 and 2012, national health care spending nevertheless rose by 58.3%.
The reduction in lawsuits, paid claims and value of those paid claims is due in no small part to the fact that there are caps on compensatory damages in nearly 30 states. In addition to reducing payouts, so-called “tort reform” has likely had a chilling effect on filings in general for other reasons. One factor is the use of the ubiquitous and false sound bites used to advance this kind of legislation such as “frivolous lawsuits” and “biggest cost driver” that has become so ingrained in the public psyche that any potential claimant in a malpractice suit will almost invariably confront a jury panel at least somewhat biased against him or her.
The findings in the report certainly beg the question – “if medical malpractice reform and reducing payouts are necessary to rein in healthcare costs, why do those costs keep going up when malpractice payments and associated expenses keep going down?” In other words, where is the connection? The data simply does not support the notion that existing tort reform – no matter how draconian (see, Texas) – has had any effect on actual healthcare costs or that any additional tort reform is needed.