Study: Malpractice liability costs $55B a year

By Bruce Japsen
Posted Sep. 8, 2010 at 7:25 a.m.

A new study showing the cost of malpractice at more than $55 billion a year to the U.S. health care system has Illinois medical-care providers once again calling for tort reform.

A comprehensive analysis by researchers at Harvard University figures the annual overall cost of medical liability to be $55.6 billion, or 2.4 percent of total health care spending, according to an article published in the September issue of the journal Health Affairs.

“We cannot debate the potential for medical liability reform to bring down health care costs in any meaningful way without realistic cost estimates,” said Michelle Mello, a professor of law and public health at the Harvard University and lead author of the study. “Some of the numbers bandied about in policy discussions were quite imaginative and we wanted a more defensible estimate.”

To reach their conclusion, Mello’s and her colleagues’ analysis included: payments made to plaintiffs, administrative costs such as attorney fees, the costs of doctors’ lost work time and costs of so-called defensive medicine in which doctors perform medical procedures that are not necessary because of legal concerns.

Two of the largest health care lobbies in Illinois were quick to pounce on the study, which comes seven months after the Illinois Supreme Court struck down the state’s medical malpractice law, saying limits on damages awarded to medical negligence are unconstitutional.

“This study only adds fuel to the fire for those of us who believe medical liability reform is critical for maintaining access to medical care,” said Dr. Steven Malkin, president of the Illinois State Medical Society. “ISMS remains committed to restoring balance in our courtrooms and will continue to support meaningful medical liability protections in Illinois and at the national level. Our health care is at stake.”

State lawmakers in 2005 passed legislation, which was signed into law by then Gov. Rod Blagojevich, that established limits on pain and suffering and other non-economic damages of $500,000 in cases against doctors and $1 million against hospitals. Illinois followed other states, such as California, that capped damages years ago.

The court said the law violates the state’s separation-of-powers clause between the branches of government by allowing lawmakers to interfere with a jury’s right to determine damages.

But medical care providers say they will use the study to help their case before the Illinois legislature to pass a new law.

“The current state Supreme Court has taken a position that limiting non-economic damages is not available, even though that is one of the most important ways to lower the costs of health care and of providing health care,” said Maryjane Wurth, president of the Illinois Hospital Association, which represents some 200 hospitals in the state. ”We hope the General Assembly will take up medical liability reform. To reduce health care costs, such reform must be addressed at the state and federal levels.”



  1. Bopper Sep. 8, 2010 at 8:05 a.m.

    So the total cost to health care malpractice costs is 2.3% of the average bill, yet the health care industry has raised the cost in the area of 8% to 17% or higher per year, just about every year and are making record profits, but somehow denying people the right for recourse when a doctor or hospital maims or kills a family member is the first thought and course of action for these people. Are we supposed to believe that if we stopped all medical malpractice claims, that insurance will go down. My calculator says no way, not a chance, and anyone who says that it will is either themselves incompetent or lying.
    Try this, be honest, make the system as fail safe as possible, don’t allow incompetence to kill people. A real reform would be for oversight and revoking the licenses of someone who is time and again proven they are incompetent, claims go down, med-mal goes down, costs should go down, if we were truly in a free market society.

  2. jack (me) Sep. 8, 2010 at 8:39 a.m.

    As usual for the Tribune, someone cries about the other acts being unconstitutional without addressing the reasons, including a poison pill in the last act, as well as an inseverability clause, which the Tribune later discovered was to assure that the malpractice records, also mandated by that law, get taken off the Internet.

    Maybe this time, Wurth’s clients will do something about reducing malpractice, rather than passing on the cost. That wasn’t suggested in this article, either, and it took Bopper to bring up the issue.

  3. Chi-Girl Sep. 8, 2010 at 9:17 a.m.

    Well said Bopper.

  4. Mike Keating Sep. 8, 2010 at 9:56 a.m.

    Here’s a calculation often left out of the health care industry’s caluculations: fewer avoidable errors = fewer medical malpractice cases = lower costs. Not to mention fewer injuries/deaths from medical malpractice.

    It’s time the health care industry put their time and attention towards best practices and not trying to fight the trial lawyers who are merely doing their jobs by protecting victims of medical malpractice.

  5. Tony Lukac Sep. 8, 2010 at 10:03 a.m.

    Malpractice insurance is $50,000 a year while surgeons make $100,000 on 4 hours work. End the greed and share the wealth. That’s what Obama was going to do anyway.

  6. Mac Sep. 8, 2010 at 11:10 a.m.

    Basically, “reform” means don’t pay people injured through medical negligence. Same idea as pension “reform”. Just don’t pay your bills and you can save money.

  7. Innocent_III Sep. 8, 2010 at 12:19 pm

    “fewer avoidable errors = fewer medical malpractice cases = lower costs.”

    Except, malpractice awards are more a lottery than payment for avoidable errors. Bad medical outcomes lead to lawsuits and awards, because juries just feel bad about the outcome. But, a bad outcome does not mean “avoidable errors.”

    Tort is a horrible way to deal with malpractice, not only because its results are unpredictable but because over half of its cost goes to law firms and court costs. It’s not only unjust but absurdly inefficient.

    Also, the dead weight of civil law on innovation should not be minimized. It’s always legally safer to go with tried-and-true procedures, even if newer procedures are available that are objectively lower in risk. Just as it’s always legally safer to order more tests, even if these are invasive and carry a risk of harm that outweighs the beenfit. Malpractice law as it now exists makes medicine worse, not better.

    Doctors make mistakes, and patients are injured. They should be compensated through a system of arbitration that is informed and predictable– in contrast to civil court, where two plaintiffs may have similar injuries with similar causes, yet one gets nothing and the other is lavishly compensated.

    And, it’s the job of professional regulation to remove bad doctors. If it’s not doing it well, then it needs to be improved. Malpractice law is not and never will be an effective means to regulate the practice of medicine.

  8. Jeremy Engdahl-Johnson Sep. 9, 2010 at 9:16 a.m.

    What pressures face new companies in medical professional liability insurance? More on this, other medmal questions at