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Study Finds Costly Med Mal Claims Represent Less Than 1 Percent Of Healthcare Expenditures

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Interesting new research out of Johns Hopkins makes the clear point that the costs of medical malpractice claims are not to blame for increasingly costly healthcare in the United States. Researchers found that while costly medical malpractice payouts receive a lot of media attention, the fact is such huge settlements are relatively rare and account for only a tiny fraction of total healthcare spending each year.

According to the lead researcher, Marty Makary, the idea that frivolous or costly payouts are draining the healthcare system of money is flatly untrue. Makary says that catastrophic claims, those with payouts over $1 million, are very rare and add up to roughly $1.4 billion in payments each year. This accounts for less than one percent of the annual national healthcare expenditures in the U.S.

The study focused on data compiled after examining more than 77,000 med mal claims filed over a period of seven years. Of these tens of thousands of med mal claims, 6,000 were for catastrophic payouts, amounting to 7.9 percent of the total. The research found that the most common allegations in these catastrophic complaints were of misdiagnosis. In fact, errors in diagnosis had twice the odds of a catastrophic payout and averaged $80,000 more than other categories of med mal claims.

Makary says that many times the large medical malpractice payouts occur in cases that are truly horrifying. Though doctors and insurance companies point to absurd cases as being the rule, Makary says that the truth is that most cases that receive high payouts involve patients who suffered incredible harm. In fact, the study found that catastrophic med mal claims with over $1 million payouts are most likely to occur in people who have died as a result of their medical care. Other groups that are likely to receive such large payouts include cases where the injured patient is under the age of one, when a patient is paralyzed as a result of his or her medical care or when severe brain damage occurs. In such extraordinary cases like these it seems fitting that the payouts should be correspondingly high.

CA