Malpractice claims make up small percent of medical costs in U.S.

As health care costs continue to rise in the U.S., some argue that high medical malpractice payouts are partially to blame. In an effort to lower our nation’s health care expenses, medical malpractice reform efforts have included putting caps on different types of medical malpractice awards.

Although reformers may argue that limiting what medical malpractice victims can recover in compensation for their injuries will help to minimize the financial effect these payouts are having on the health care industry, some researchers claim that medical malpractice payouts, even the high payouts, only make up a small percent of the nation’s heath care expenses.

A study conducted by researchers at Johns Hopkins revealed that medical malpractice payouts in excess of $1 million don’t even make up 1 percent of the nation’s medical expenditures.

For the study, researchers analyzed data on medical malpractice payouts that were recorded between 2004 and 2010. Researchers only reviewed data on payouts that were made on behalf of individual providers. The number of payouts that were reviewed totaled more than 77,500. Of these payouts, only 7.9 percent resulted in awards of $1 million or higher. The nation’s health care costs total more than $60 billion per year, researchers noted. However, high medical malpractice awards only total about $1.4 billion per year, based on the study.

Researchers from Johns Hopkins reported that medical malpractice claims are more likely to result in awards in excess of $1 million when patients’ injuries lead to fatalities or when victims are under the age of 1. Malpractice awards that exceed $1 million are also more likely when patients suffer brain injuries or other injuries that may require patients to receive special medical treatment for the rest of their lives.

Instead of focusing on limiting what patients and their families can recover after being harmed by doctors’ errors, nurses’ mistakes and hospitals’ negligence, the study’s results suggest that better ways of reducing rising health care costs include preventing medical mistakes from happening and cutting back on overusing medical resources when the use of such resources is not necessary.

Source: Claims Journal, “Catastrophic malpractice payouts add little to health care’s rising costs,” May 2, 2013

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