Medical Malpractice News | Insurance Reform News

Medical Malpractice Payments Not the Cause of Premium Increases

Malpractice Payments Only 0.3% of Health Care Spending
Researchers analyzing data from the National Practitioner Data Bank (NPDB) have found that medical malpractice payments have grown only slightly over the last ten years and that the total dollars paid has remained consistently under 0.3 percent of national health care spending. The researchers concluded that malpractice premiums were only weakly connected to premium increases and that rising medical costs were substantially responsible for the growth in payments.

Malpractice Payments Grow 1.6% Annually
The growth of medical malpractice payments is far less than previously thought, according to the study published in the May edition of Health Affairs. The average payment amount grew at an annual rate of only 4 percent between 1991 and 2003. Over the most recent four years the annual growth rate slowed to just 1.6 percent. Despite anecdotes of an explosion of multimillion dollar awards, the top ten percent of malpractice payments grew only 2.6 percent annually.

Other findings:

• The frequency of malpractice payments remained stable over the ten years of the study period.

• Settlements, which make up 96 percent of all payments, were 1.7-2.4 times smaller than judgments. The average settlement in 2003 was $257,000.

• High-risk specialties did not make up the largest share of malpractice payments. Obstetrics-related payments were the highest but made up only 15 percent of the total. Only 2 percent of malpractice dollars went to extreme cases such as amputation of the wrong body part.

• The cost per person malpractice payments decreased over the most recent three years from nearly $15 per person per year to just over $12.

The National Practitioner Data Bank Only Comprehensive Source
The National Practitioner Data Bank is the most comprehensive source of statistics on malpractice payments. All malpractice payments made on behalf of health care providers must be reported to the NPDB. In contrast, the jury verdict reports highlighted by tort reform proponents such as the American Medical Association discuss only judgments, which make up only 4 percent of all payments and only 5 percent of medical malpractice dollars. Judgments also frequently do not reflect the final payment total, and jury verdict reports tend to skew to the higher, more frequently reported verdicts.

Health Affairs News Release: Malpractice Crisis Under The Microscope

June 2005