Doctors Detail High Costs of Fighting Malpractice Claims
Expenses reach tens of thousands even when patient receives no payout, researchers say
WEDNESDAY, April 4, 2012 (HealthDay News) -- For doctors defending medical malpractice claims, costs vary widely across specialties and can run into the tens of thousands, even when a patient did not receive a payout, new research shows.
The upshot: Patients end up paying the price in the end, the researchers concluded in their letter published April 5 in the New England Journal of Medicine.
"Higher defense costs and higher malpractice premiums are ultimately passed down to patients through higher physician fees," said co-author Dr. Anupam Jena, a physician at Massachusetts General Hospital, Harvard Medical School, and a senior fellow at the Schaeffer Health Policy Center at the University of Southern California.
According to Jena and his co-authors, cardiologists shell out the most when it comes to malpractice claims -- averaging more than $83,000 for paid claims -- while ophthalmologists spend nearly $24,000 for paid claims.
Expert witnesses, research costs, lawyers' fees and funding overhead costs, such as filing fees, are among the expenses that rack up bills, Jena said.
"The average malpractice claim in our study cost approximately $23,000," he said, adding that the claims that result in payments are more expensive because they take longer to defend, typically up to two years or more.
To come up with defense costs of paid and unpaid malpractice claims by specialty, the authors analyzed costs associated with nearly 27,000 malpractice claims that closed between 1995 and 2005. The claims involved nearly 41,000 physicians who were covered by a national liability insurer.
Jena and his colleagues had examined the same data in a 2011 NEJM study that compared malpractice risk by medical specialty, he said.
"We wanted to follow-up our earlier study by studying the magnitude of defense costs in medical malpractice and to explore how those costs vary by specialty," said Jena.
Why did some specialists rack up defense bills almost four times higher than others? Jena said the chart-toppers, heart and cancer physicians, are more likely to deal with claims linked to a failure to diagnose, and possibly death.
"The damages from malpractice vary, ranging from a missed diagnosis that delays treatment to the unexpected loss of life," he said. "Many cases are complex and those cases can stretch out longer," he said, noting that time is money.
Sonia Suter, an associate professor of law at George Washington University Law School in Washington, D.C., said the letter contains useful information. "It helps inform the ongoing debate about health-care costs and whether or not medical malpractice is contributing to higher costs overall," she said.
"I don't think this letter tells me the whole story, though. It's only one piece of the puzzle," said Suter, adding that she thought obstetrics would have landed higher up on the list. (It's sixth of 25 specialties.)
Dr. Jeffrey Segal is a neurosurgeon and founder and CEO of Medical Justice, a for-profit company that helps physicians deter and manage frivolous medical malpractice lawsuits. He said the letter in NEJM points out not just costs of claims, but the significant number of cases that come through the legal system that aren't won by the patient.
"We see here many claims are coming through that don't have merit. In a perfect legal system, you'd have the dollars going to a patient who is injured by medical negligence," he said. "This reaffirms that it's a system that takes a lot of time and is very expensive."
Segal added, "We've proposed legislation in Florida -- I'm part of a nonprofit that suggests a better way of doing things -- that would help move cases through faster. I'm talking weeks and months instead of years."
Jena said there are some cases where the patient was clearly harmed and, in those cases, it's important that the patient is compensated and compensated early on.
"Waiting two years is not fair," Jena said, and added that a quicker resolution would reduce not just the financial cost to those injured, but the emotional expense as well.
Jena described another solution that might hold promise for reducing malpractice claim costs.
"The University of Michigan hospital system tested a program where they identified errors early on and proactively approached patients and said, 'This is an error that occurred and we apologize, and we'd like to compensate you,'" he said. "Malpractice lawsuits, defense costs, and the time required to resolve claims all went down." He added that this approach of early disclosure needs to be studied further.
Cardiologist Dr. Chip Lavie, medical director of cardiac rehabilitation and prevention at the John Ochsner Heart and Vascular Institute in New Orleans, also weighed in on the new findings.
"I believe if there was substantially less threat of medical malpractice, physicians could practice medicine in a different way, trying to be cost-effective and trying to do the right thing with what is truly best for the patient as opposed to what is the best way to maintain a good defense against any potential subsequent lawsuit," Lavie said.
Visit the Institute of Medicine to see its landmark report on reducing preventable medical errors.