There is always lots of talk about how the cost of healthcare is being driven up by the cost of medical malpractice lawsuits and their attendant cost on the system. Doctors frustrated by the situation have cited rising costs of malpractice insurance, insurance companies have blamed it for increasing rates, and facts have become increasingly politicized. This thinking is flawed in a number of ways.
First, the cost of medical malpractice actions have decreased steadily from 2003-2014, according to the National Practitioner Data Bank. Both the numbers of claims and the amounts paid have shown a decreasing trend. In fact, the total estimated amount spent on malpractice in 2010 was $10 billion (including hospital, legal and claim costs). That sounds like a lot, but in reality, that amount represents 1/3 of 1 percent of the $3 trillion spent annually on healthcare. That means that, even if we eliminated the category entirely, it would not make the slightest dent in our collective healthcare costs.
So maybe the culprit is insurance companies gouging doctors? Malpractice insurance premiums have risen in the past decade, but hardly to unaffordable rates. A sampling of doctors in California show nephrologists below $5,000 for the year, a pulmonologist under $6,500, an ophthalmologist less than $7,000, emergency room physicians $11,000-$12,000 this year, anesthesiologists $12,000-$14,000 this year, surgeons (including orthopedics) $20,000-$22,000 this year, and Ob/Gyn about $34,000 (obstetrics always has the highest malpractice premiums). You can judge for yourself, but with many insurance premiums below $15,000/year, and many doctors earning in the mid-six figures, the amounts hardly seem debilitating.
So why is the cost of medical malpractice so frequently cited as the reason for skyrocketing healthcare costs? Probably because it’s so easy to villainize, and those responsible for defending it are also those who participate in the process. Nobody likes to admit when they have made a mistake, and with our process, doctors are forced to both acknowledge mistakes and do it in a very public setting. People see big awards and hear stories about abuse of the system, but never see the victims who are seriously injured, and whose lives have been profoundly (and often permanently) changed. We work for them, and it is an important function to make sure those who are really injured receive appropriate compensation.