Mar 18, 2013 | 3 min read

Myth: Spikes in Litigation Cause Medical Malpractice Crises

In a recently-published article in Chest, David A. Hyman, M.D., and Charles Silver, J.D. examine what they call "five myths of medical malpractice," the first of which is that medical malpractice crises are caused by a deluge of lawsuits against bad doctors. The data, according to the authors, just doesn’t support that assertion.

Myth—Spikes in Malpractice Litigation Cause Malpractice Crises

This myth says that "malpractice crises"—those times in history when malpractice premiums become too high for many doctors and hospitals to afford, and fewer insurance companies remain willing to offer coverage—is caused by sudden rises in payouts or claim frequencies.

Even the American Medical Association (AMA) perpetuates this belief, stating in March 2006 that, "Excessive meritless lawsuits against neurosurgeons and ER physicians threaten access to emergency care." Earlier, in 2002, Richard Corlin, M.D., past president of the AMA, stated that multi-million-dollar awards handed out by juries drive up the premiums, which then drives insurers out of the malpractice insurance market, while the remaining ones increase rates to try to cover future awards.

Research Doesn’t Support the Conclusion

According to Hyman and Silver, however, "extensive research indicates that these highly salient anecdotes of run-away jury verdicts are thoroughly unrepresentative." They assert that since most lawsuits result in voluntary settlements rather than jury verdicts, one must study closed claims to get a more accurate picture. When reviewing that data, the conclusion is that "both the frequency of malpractice claiming and the payments per claims were either stable or declining during the period that preceded the latest malpractice crisis."

American political activist and attorney Ralph Nader agreed in a 2003 article published by CommonDreams.org, stating, "Malpractice cases filed and actual payments in constant dollars have been level for many years; about nine of ten malpractice claims do not result in any lawsuits being filed, according to various studies. Yet the human toll is deadly. A Harvard study estimated that gross malpractice just in hospitals takes 80,000 American lives a year plus causing hundreds of thousands of serious injuries."

Data Shows Litigation Follows Injuries

Hymen and Silver go on to quote more data, noting that, "Payout per physician was roughly stable from 1992 to 2001, but began dropping in 2003 and is now 46 percent below the 1992 level." They acknowledge that the decline is largest in states that capped total or noneconomic damages, but noted other states without caps have also experienced large and sustained declines.

Should we be surprised that the data doesn’t support the myth? Hyman and Silver say no—the liability system responds to the frequency of serious medical injuries. Outlandish jury verdicts aren’t representative of most lawsuits, and are often dramatically cut by judicial oversight or through other means.

Research by the Robert Wood Johnson Foundation also noted, "The strongest studies have found that the malpractice environment has had only small or no effects on the supply of physician services overall."

What Then, Causes Medical Malpractice Crises?

Here, Hyman and Silver don’t have any real answers for us. They note that insurance scholars have theorized that underpricing and under-reserving in soft market periods may have something to do with it.

Nader asserts that some doctors are paying $50,000 to $100,000 a year to their malpractice insurers because "the companies have learned in the past thirty years to over-classify their risk pools, thereby reducing their number to specific specialties like obstetrics or orthopedic surgery in order to charge much more. In addition, by not surcharging the few bad physicians in these specialties, the good specialists pay as much as the incompetent ones with a large number of payouts to their wounded patients."

Eric T. Chaffin

Chaffin Luhana LLP
(888) 480-1123

Exclusively focused on representing plaintiffs, especially in mass tort litigation, Eric Chaffin prides himself on providing unsurpassed professional legal services in pursuit of the specific goals of his clients and their families. Both his work and his cases have been featured in the national press, including on ABC’s Good Morning America.