Truths and Myths About Malpractice

These are important political and insurance issues that affect YOU


The truth is: Medical Malpractice is not driving up the cost of health care.
Medical malpractice costs (this includes awards paid to victims, attorneys fees for both plaintiffs and defendants, and malpractice insurance premiums) are less than 1% of total health care costs. (Congressional Budget Office, October 1992) The cost of malpractice has, in fact, remained steady at less than 1% of health care costs since 1976. (Statistical Abstract of the United States, and Best's Aggregates & Averages). This means that if we eliminated the entire malpractice system (removed malpractice insurance and threw out people's rights to sue) we would decrease the cost of health care by less that 1%. Is this really the solution to bringing down the cost of health care? Nationally, in 1992, malpractice insurance premiums fell, but the cost of health care rose by 11.5%. (National Association of Insurance Commissioners, 1989 Profitability Study, 1990 Profitability Study) Did doctors pass their savings onto consumers? In Maine, between 1988 and 1991, medical malpractice insurance premiums in Maine dropped by 22%. (A.M. Best Custom Database). Nationally, doctors spend only 3.7% of their gross income on malpractice insurance premiums. As a comparison, doctors are spending 14% of their gross income on office payroll (including salaries, bonuses, and retirement plan contributions). Doctors are also spending 5.7% on office space. (These are median figures. Medical Economics, Feb. 3, 1992.)                 Top

Don’t be misled by false advertising: The Litigation Explosion is a myth!
A Harvard University Study found that 1 out of every 6 people injured by a doctor ever files a claim. Of those few, only 1 in 16 ever receive any compensation. (Harvard Medical Practice Study, 1990). According to the New England Journal of Medicine in July 1991, only 1 person in 65 injured by a doctor's negligence ever files suit. This is in line with the findings of an article which appeared in Judicature. It outlined the findings of a Duke University study, and stated that juries find in favor of plaintiffs only about one_third of the time. ( Judicature, October_Nov., 1992.) The same study provided material for an experiment in jurors' handling of non_economic damage questions. As an example, a case involving a pain and suffering question was presented to 21 experienced North Carolina arbitrators (former judges and senior plaintiff and defense lawyers), and to 89 jurors who were awaiting assignment to trials. The arbitrators' median award was $57,000. The juror's median was $47,850, which was not considered a statistically significant difference. Juries are not biased in favor of plaintiffs. Even the American Medical Association (AMA) concluded in 1992 that nationally since 1985, the rate of medical malpractice claims has declined at an average annual rate of 8.9%. (Gonzalez, Medical Professional Liability Claims and Premiums, 1985 _ 1990, Socioeconomic Characteristics of Medical Practice, AMA, 1992, p.23) Between 1988 and 1991, medical malpractice premiums in Maine dropped by 22%. (A.M. Best Custom Database) Between 1962 and 1991, there have been a total of only 9 cases in Maine in which a victim has been awarded one million dollars or more. This is the total for ALL civil suits, not just medical malpractice. Maine is ranked 47th in the nation in terms of frequency of million dollar verdicts. (Jury Verdict Research Series, Current Award Trends in Personal Injury, 1992).

What is really happening: Only the insurance companies are getting rich from our medical malpractice system.
“In Maine, between 1979 and 1991, malpractice insurers have taken in $238 million in premiums, and have only paid out $70 million in claims." (A.M. Best Custom Database). This means that of every premium dollar earned by insurance companies, only 30 cents was paid out to victims. From 1989 to 1991, medical malpractice claims paid out to victims in Maine dropped a whopping 67%. (A.M. Best Custom Database.). After being forced to cut premiums in 34 states in 1989, the St. Paul Companies transferred $250 million from reserves (amounts set aside for future claims), and moved it to their surplus account. This followed a $14.5 million transfer in 1988. One financial columnist observed that, "In recent years the company has begun to recognize __ sometimes it's been forced to do so __ that the dire predictions it and other insurers made in the mid_1980s about trends in malpractice claims and legal settlements were, to put it bluntly, alarmist." Another news account added that "more and more decisions are going against plaintiffs, and insurers will continue to profit." ("Those Newly Cash Rich Insurers" The New York Times, April 1, 1990; Caridea, "Can [St. Paul] Continue Putting Reserves Into Earnings?", Minneapolis Star_Tribune, April 16, 1990, p.1D.) Medical malpractice insurers in Maine were the 7th most profitable in the country in 1991. (A.M. Best Custom Database)

AND THERE IS MORE: “Defensive medicine” is a myth!
According to Gordon Smith of the Maine Medical Association: "we all know how soft the data are on defensive medicine and how much of it is really done purely out of defense of the physician as opposed to the benefit of the patient. But the notion of defensive medicine sells very well politically..." (Source: Journal on Quality Improvement, Volume 19, Number 8 (August, 1993). When does extensive testing stop being merely thorough and careful and become "defensive"? When does a certain test or procedure stop being unnecessary and start being unwarranted? (For example, a test to determine if a particular growth is cancerous may well turn out to have been unnecessary if the results confirm no cancerous cells. But whether or not it was unwarranted will depend entirely upon the circumstances existing before the test was taken.). "Defensive medicine" has not been, and most likely never will be, adequately defined by the medical community, and it is therefore impossible to quantify its impact. A recent study of a large number of New Jersey medical malpractice cases reached similar conclusions. Based on records of a doctor_owned insurance company that insures 60% of New Jersey physicians, the study found that unjustified payments in malpractice cases are rare. Doctors' care was substandard in most cases in which patients won payment for injuries. In other words, "physicians usually win cases in which physician care was deemed to meet community standards." ("The Influence of Standard of Care and Severity of Injury on the Resolution of Medical Malpractice Claims," 117 Annals of Internal Medicine 780_784, Nov. 1, 1992.). So, if doctors are conducting tests to avoid losing lawsuits, and are then winning these lawsuits, doesn't this just mean that the tort system is working? In an ideal world, doctors would conduct prudent tests out of concern for their patients' health. By crying "defensive medicine", doctors are telling us that they'd rather not meet these standards, and are only doing so out of fear of losing lawsuits. The Wall Street Journal in January 1993, explained that "Hospitals are prescribing a variety of new operating room procedures from computerizing the way they keep track of surgical tools, to bearing down on doctors who seem overly eager to close up a patient before all tools have been accounted for. Along with concern about patient safety, the threat of suit has prodded hospitals and nurses to take all reasonable actions to prevent foreign objects from being left in patients. " Kind of makes you wonder what "non_defensive" medicine would be like, doesn't it? Some of the other "defensive" changes doctors and hospitals report they have had to make because of the malpractice system, and are grousing about, include: peer review; quality assurance plans; use of written informed consent; explanations to patients of results of recommended procedures; and more frequent consultation with other doctors. One of the biggest complaints is that fear of lawsuits leads doctors to spend more time with their patients. (American College of Obstetricians and Gynecologists, "Professional Liability and its Effects", a Report of a study of ACOG Membership).        Top

Established truths: The only crisis surrounding malpractice is the malpractice itself.
If there is a malpractice "crisis", a just society should focus on the doctors who commit malpractice in the first place. The 1990 Harvard Medical Practice Study estimated that there were over 27,000 cases of negligence in New York State hospitals in 1984, including 7,000 deaths related in some way to malpractice and 877 instances of permanent disability of more than 50%. This is the real “cost” of malpractice, and no discussion of this issue is complete without these figures. A Harvard Study conducted in 1992, shows nearly 155,000 Americans die in hospitals each year as the result of medical accidents such as drug overdoses and infected wounds. This 155,000 is three times higher than the number of people killed each year in traffic accidents. "Medical injury is indeed a hidden epidemic. More than 1.3 million hospitalized Americans __ nearly one in 25 __ are injured annually by medical treatment." (Dr. Lucien Leape, of Harvard University in a Chicago speech to the American Association for the Advancement of Science, February, 1992.). As many as 75% of the 2,000 or more anesthesiology_related deaths in the United States each year are the result of malpractice or mistakes by doctors. (Dallas Morning News, December 1986.) None of this means that all doctors are committing rampant malpractice. In fact, there are a few bad apples who are causing most of the damages. In Illinois, many doctors who are sued for malpractice already have a track record of negligence. "2% of all physicians practicing in Cook County, Illinois, were defendants in 36% of the medical negligence litigation filed over the last fourteen years." (Coalition for Consumer Rights Study, 1987). In Pennsylvania, 1% of physicians practicing in the state were responsible for 25% of the losses paid out by s state excess liability fund since it was created in 1976. (Management Analysis Center, 1985.). In Texas, 7.5% of all practicing physicians in the state account for 65% of all malpractice claims filed between 1978 _ 1984. (Public Citizen, 1987.). In Florida, from 1975 through 1984, only 3% of all the doctors accounted for nearly half (45%) the money paid to malpractice victims in the state. (Orlando Sentinel, series of reports beginning April 13, 1986.) "Illinois renewed the licenses of a couple of doctors who were at that time sitting in a federal penitentiary in Indiana." (B.J. Anderson, Associate General Counsel to the AMA, quoted in Medical Economics, March 18, 1985.). In 1990 the federal government began maintaining a National Practitioner Data Bank to track malpractice and disciplinary histories of individual physicians. Under the 1986 law which created the system, malpractice judgments and settlements are required to be reported to the data bank, and hospitals, licensing and disciplinary authorities are required to check the data bank before giving credentials to physicians. Physicians have access at no cost to their own files in the data bank, but the information is not available to consumers of medical services or to malpractice insurers. Some insurers, however, reportedly now require doctors to "self_query" the data bank and provide a copy of the record as a condition of renewing their malpractice policy. A major loophole in this system, however, allows doctors who are dismissed from lawsuits before settlement to avoid appearing in the data bank. This is a powerful inducement to defense lawyers to negotiate the dismissal of all individual medical malpractice defendants before cases are settled.

Remember: Tort reforms are unfair to victims !
By placing an arbitrary cap on non_economic damages, laws target a very small portion of malpractice actions. As we have seen, very, very few people ever receive damages very large. Why should these severely injured people become victims a second time by having their rights limited? We need to think about these few victims of severe negligence. They and their families often face decades of personal and financial costs associated with providing care, supervision, housing and companionship for these victims who will never be able to care for themselves. These are not frivolous cases. Capping non_economic damages is also discriminatory against the following groups of people: women, children, the elderly, and the poor. These people tend to have lower incomes and, therefore, lower economic damages. If their non_economic damages are arbitrarily capped, they will be eligible for less compensation. For example, if a wealthy executive and a newborn child are both victims of the same crippling malpractice, the wealthy executive would receive compensation for his medical expenses, lost wages, and pain and suffering. However, it?s impossible to accurately calculate the earning potential of an infant. Juries currently have the freedom to compensate these types of cases through non_economic damages such as pain and suffering. If we cap this portion of the damages, the wealthy executive is granted greater compensation, while it's the infant who will need an entire lifetime of care. Is this fair? Tort "reforms" don't bring down the cost of health care! We've already seen that: Total medical malpractice costs amount to less than 1% of total national health care spending. (Congressional Budget Office, 1992) Only 1 out of every 8 victims of malpractice ever files a claim. (Harvard Medical Practice Study, 1990). Out of those who file claims, only 1 in 16 ever receives any compensation. (Harvard Medical Practice Study, 1990). Between 1962 and 1991, there were only 9 cases in Maine which resulted in a payment of $1 million. (Jury Verdict Research Series, 1992). Doctors' malpractice premiums have been falling, while health care costs continue to rise. (A.M. Best Custom Database). Limiting the rights of a small number of people, and it's small effect on a tiny portion of health care costs will not make health care more affordable! California exemplifies that tort "reform" does not lower health care costs. Weakening our tort system is not sound government policy. The tort system has traditionally been viewed as serving two functions: compensation for those who have been injured and deterrence of future injuries. Because of the unique makeup of the health care system, the tort system replaces traditional market forces in enforcing quality control and disciplining those providers who are careless. This role was recognized and described by Dr. William Ira Bennett, editor of the Harvard Medical School Health Letter, this way: Malpractice is often denounced, especially by doctors, as an atrocity visited on them by the legal system. Public discussion of malpractice is clouded by the belief that malpractice suits are a vulgar effort to capitalize on misfortune. But the malpractice system can by dispassionately analyzed as though it were a form of medical testing, a way to find out whether something unhealthy is happening, and to correct it. The irony is that the system wouldn't exist if doctors weren't experts. If lay people were competent to assess a physician's competence and diligence, there would be no need for malpractice litigation. Good doctors would get the patients, and bad doctors would go out of business. But because the principle of caveat emptor breaks down when the buyer can't reasonably be expected to know what to look out for, the market cannot be relied on to signal physicians when they are incompetent or careless. The court, then, serves, as a substitute for the marketplace, imposing financial penalties _ the equivalent of income that would have been lost if patients know how to avoid a poor doctor in the first place. But, piling paradox on irony, the court must call on the judgment of lay people to decide whether the expert has done a reasonable job. (W. Bennett, "The Pluses of Malpractice Suits," The New York Times Magazine, July 24, 1988.)

The Idea of Joint and Several Liability is an important part of our legal rights.
The legal doctrine of joint and several liability derives from time_tested principles of tort law that reflect the civil justice system's concerns over the past few centuries for the need of a victim to "be made whole" for injuries and damages. The system is designed to protect the tort victim from the possibility that , in cases involving two or more defendants (negligent parties), one will be unable to pay, thereby leaving the victim partially uncompensated. When a victim has no responsibility for her or his injuries, the law has strongly held that the victim should not pay, or suffer financial hardship. Removal of the doctrine would only serve to unfairly protect negligent people or companies from responsibility for their actions. The demise of joint and several liability would make it "difficult to hold businesses liable for the cleanup of toxic wastes and pollution, because companies would identify countless other defendants to dilute their own proportional responsibility." (Joan Claybrook, Consumers and Tort Law) The current policy recognizes that we do not live in a perfect world, and that under these circumstances, an innocent victim has more rights that defendants who have already been held to have caused harm to the victim. Removing this policy reverses this belief. The insurance industry has been unable to prove that removing this doctrine would affect rates.       Top

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