Medical Malpractice Claim Payments Down

June 16, 2011

According to a recent study, the number of medical malpractice claim payments has dropped by twenty percent from 2005 to 2009. The study, conducted by Dr. Tara Bishop of Weill Cornell Medical College of New York, is based on data from the National Practitioner Data Bank. All physicians who practice in the U.S. must report all medical malpractice claim payments to this data bank.

According to the study, the number of medical malpractice claim payments for inpatients events fell from 6,515 in 2005 to 4,910 in 2009. An "inpatient" event is an incident that occurs to a patient has been admitted to a hospital or clinic for treatment that requires at least one overnight stay. Likewise, the number of medical malpractice claim payments for outpatient events also dropped significantly (from 5,511 in 2005 to 4,448 in 2009). An "outpatient event" is an incident that occurs to a patient who is admitted to a hospital or clinic for treatment that does not require an overnight stay. As a Chicago medical malpractice lawyer, I am skeptical whether this significant drop in malpractice payments necessarily means patient care has also significantly improved.

There are a number of explanations why medical malpractice claim payments have fallen substantially over the years. One optimistic explanation is that patient care has improved over the last few years. While possible, it is doubtful a full 20% reduction in claim payments in just five years is the sole result of improved patient care. This is particularly true in light of the other potential explanations described below.

A second explanation for the reduction in malpractice payments is that physicians are increasingly unwilling to consent to settlement. When a doctor consents to settlement, this often increases their medical malpractice insurance premiums. This occurs much like how an auto accident claim will raise a person's auto insurance rates when they were deemed at fault. Over the last decade, medical malpractice insurance premiums have gone up substantially while medical malpractice payments have declined. Many experts believe these unusual high malpractice premium increases are due to money insurance companies have lost from investments in the stock market. Raising insurance rates for doctors allows the insurance companies to recoup money they have lost in the stock market. Thus, as the stock market goes, so do medical malpractice insurance premiums. A doctors decision to consent to settlement provides insurance companies an excuse to really jack up the doctor's premiums.

Still another explanation for why malpractice claim payments have declined is that jury's have become increasingly conservative--that is, more likely to find for the doctor. Even in areas like Chicago's Cook County, who have been considered relatively favorable to plaintiffs in malpractice cases, jury verdicts for plaintiffs are down considerably over the years. Based on the increasingly conservative jury pool and reduced jury verdicts for plaintiffs, it is no wonder insurance why medical malpractice insurance companies (and their doctors) are increasingly willing to try cases before a jury than settle out of court.

In reality, there is probably no single explanation for the reduction in medical malpractice payments. Instead, the reduction is likely due to a number of factors. These factors probably include an increase in quality patient care, a decrease in the willingness of doctors to consent to settlement, and an increase in the willingness of insurance companies (and their doctors) to try cases to verdict before increasingly conservative jurors.

Sources Used:

Medpage, Outpatient Risk Carries Equal Malpractice Risk, June 15, 2011.

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