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Monetary Payouts for Medical Malpractice Claims Hits an All-Time Low, Despite Rising Healthcare Costs

The number of successful medical malpractice lawsuits and settlements, and the amount awarded in those successful claims hit an all-time low in 2012, continuing a decade of decline, according to the consumer advocacy group Public Citizen. Since healthcare costs rose dramatically during this period, proponents of tort reform who blame lawsuits for the rise are misinformed, said the report's author, Taylor Lincoln of the group’s Congress Watch division

There were about 9,000 payouts handed out in 2012 compared with about 16,000 in 2001. When adjusted for inflation, the total value of the payouts was about $3 billion compared to $5.5 billion in 2001. Although the group did not single out one reason for the decline, an article in MedPage Today offered several explanations. Some pointed to efforts by physician groups to curb the amount of suits. Others cited the fact that overall doctors visits are down due to the uncertainty of the national healthcare law.

The leading injury type associated with malpractice payments was wrongful death, accounting for 32% of payments by number and by total value. "Significant permanent injury" was the next most common, listed in 15% of payments and accounting for 19% of the total value of payments.

The study did not compare the changes in individual states, so it cannot definitively suggest whether tort reforms enacted over the past 10 years in states like Texas have been beneficial to healthcare costs. But the study’s authors pointed out that over the past 10 years medical costs have exploded. Yet as a percentage of overall national healthcare expenditures, the total amount of such payments was the smallest on record, disproving the argument that malpractice litigation is an important promoter of skyrocketing healthcare costs.

"If medical malpractice litigation were truly the 'biggest cost driver' in medicine" -- as stated by House Speaker John Boehner (R-Ohio) in 2010 -- "...then declining payments should have pulled overall healthcare costs down. But the nation's healthcare bill has risen 58.3% since 2003," Lincoln said. The report's findings were consistent with those in a study published earlier this week in Health Affairs, which found that malpractice claims are less common than many physicians believe and that huge settlements are rare.

As I stated in previous blog posts, the tort reforms being suggested for New York may have grave unintended consequences. For instance, legitimately injured victims will be unable to obtain sufficient compensation that may require them to go on governmental assistance programs such as Medicare and Medicaid. This article seems to back up that fear. Texas enacted a cap on medical malpractice awards in 2003 and malpractice payments have since declined by 65%. However, health care costs in Texas rose faster than the national average during that time.

Lincoln argued that without lowering health care costs, less litigation due to “state-based tort restrictions has no doubt prevented many malpractice victims from receiving just compensation."


Gerry Oginski
NY Medical Malpractice & Personal Injury Trial Lawyer