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Myths vs. Facts: The American Medical Associations' Numbers Don't Add Up

The American Medical Association ("AMA") has published an ad in support of H.R. 5, claiming that the medical liability system is "broken" and "frivolous" lawsuits are driving up health care costs. Nothing could be further from the truth.

  • AMA Myth : 64% of medical liability claims in 2009 were dropped, withdrawn, or dismissed.

FACT : "Claims" are not lawsuits; and medical malpractice lawsuits are dropping dramatically.

A "claim" is defined as "A demand to the insurer by, or on behalf of, the insured person for the payment of benefits under a policy." (i) Conversely, a lawsuit is an action before a court to recover damages for a harm suffered. Recognizing that important difference, the number of medical malpractice lawsuits dropped 15 percent between 1999 and 2008. (ii) Indeed, medical malpractice cases are only a small portion of a state's civil caseload. According to the NCSC, "Despite their continued notoriety, rarely does a medical malpractice caseload exceed a few hundred cases in any one state in one year." (iii)

The threat of the litigation is sometimes the only way to uncover what transpired when a medical error occurs. A Kaiser Family Foundation survey found that 70 percent of patients who experience medical errors are not told by their doctors. (iv) By filing a "claim" with the physician's insurer, patients learn quickly what happened when an error occurs. In fact, very few patients who experience a preventable medical error ever sue.

Further, the Institute of Medicine, in its seminal study, found that 98,000 people die every from preventable medical errors. (v) Recent research shows that this may be a low estimate. A 2011 Institute for Healthcare Improvement study estimates that one in three patients who are admitted to the hospital will experience a medical error. (vi)

  • Myth: 88% of tried medical liability claims in 2009 were won by the physician.

FACT: Only 3% of people harmed by a doctor's negligence ever file a lawsuit, and most negligence claims are meritorious, with 97 percent of claims involving medical injury and 80 percent involving physical injuries resulting in major disability or death. (vii)

First, because preventable medical errors are so common, and negligence is often times clear-cut, many claims are settled by an insurance company, without having to go before a judge or jury (also referred to as "tried" by the AMA). In fact, Harvard researchers concluded that "portraits of a malpractice system that is stricken with frivolous litigation are overblown" and that the reverse-nonpayment of claims where error was involved-was a bigger problem. Other health leaders agree, "[T]he major problem out there is medical errors that are not compensated, rather than frivolous claims that are compensated." (viii)

  • Myth: Many physicians pay $150,000 every year for medical liability insurance.

FACT: Nothing on H.R. 5, including caps on damages, will lower insurance premiums.

An examination of malpractice premiums in states with caps shows there is no correlation between malpractice payouts and physician malpractice premiums. In fact, insurance premiums for doctors are lower in states without caps on damages . (ix) As well, the average malpractice premium has been dropping since 2006. (x)

  • Myth : CBO estimates that the federal deficit will reduce by $54 billion over a 10-year period if medical liability reform is enacted.

FACT : Enacting H.R. 5 will only cause preventable medical errors to rise, increasing the cost of healthcare and increasing the burden on taxpayer-funded programs.

CBO noted that if medical liability reforms are enacted, the U.S. mortality may increase by 0.2%, killing an additional 48,250 Americans, (xi) and, even with CBO's most generous estimate, medical malpractice reform will achieve only a 0.5% reduction in health costs. That's one half of one penny of every dollar spent on healthcare.

The best way to reduce malpractice costs is to reduce medical malpractice. The IOM estimates that preventable medical errors cost the medical system an extra $290 billion over 10 years. Further, if patients cannot recover from wrongdoers, they will have to rely on taxpayer programs such, Medicare, Medicaid and Social Security Disability Insurance to cover their costs.


References:

(i) According to the Health Insurance Association of America (HIAA)

(ii) Examining the Work of State Courts: An Analysis of 2008 State Court Caseloads, National Center for State Courts 2010.

(iii) Id.

(iv) National Survey on Consumers' Experiences With Patient Safety and Quality Information, Kaiser Family Foundation, November 17, 2004.

(v) Institute of Medicine released To Err Is Human (Nov. 1999)

(vi) David C. Classen, Roger Resar, Frances Griffin, Frank Federico, Terri Frankel, Nancy Kimmel, John C. Whittington, Allan Frankel, Andrew Segar and Brent C. James, 'Global Trigger Tool' Shows That Adverse Events in Hospitals May Be Ten Times Greater Than Previously Measured, Health Affairs, April 2011.

(vii) David M. Studdert, Michelle M. Mello, Atul A. Gawande, Tejal K. Ghandi, Allen Kachalia, Catherine

Yoon, Ann Louise Puopolo, Troyen A. Brennan, Claims, Errors and Compensation Payments in Medical Malpractice Litigation, New England Journal of Medicine, 354;19, May 11, 2006.

(viii) Amanda Gardner, Frivolous Claims Make Up Small Share of Malpractice Suits, HealthDay, May 10, 2006.

(ix) Medical Liability Monitor (October 2010).

(x) Id. (various editions)

(xi) CBO Letter to Senator Hatch Regarding Analysis of the Effects of Proposals to Limit Costs Related to Medical Malpractice, page 5 (October 9, 2009) (citing "Lakdawalla and Seabury (2009) found that a 10 percent reduction in costsrelated to medical malpractice liability would increase the nation's overall mortality rate by 0.2 percent.").

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