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Study casts doubt on claims that the medical malpractice system is plagued by frivolous lawsuits

May 11, 2006

System does a good job of rejecting claims without merit, but administrative costs are exorbitant

Boston, MA - The debate over medical malpractice litigation, which raged during the last presidential campaign, continues as a hot-button political and health care issue in the U.S. The Senate is expected to vote soon on legislation to impose a federal cap on noneconomic damages in malpractice suits, following on similar bills that passed the House of Representatives but stalled in the Senate last year. One popular justification for tort reform is the claim that "frivolous" medical malpractice lawsuits-those lacking evidence of substandard care, treatment-related injury, or both-enrich plaintiffs' attorneys and drive up health care costs. A new study by researchers from the Harvard School of Public Health (HSPH) and Brigham and Women's Hospital challenges the view that frivolous litigation is rampant and expensive.

The researchers analyzed past malpractice claims to judge the volume of meritless lawsuits and determine their outcomes. Their findings suggest that portraits of a malpractice system riddled with frivolous lawsuits are overblown. Although nearly one third of claims lacked clear-cut evidence of medical error, most of these suits did not receive compensation. In fact, the number of meritorious claims that did not get paid was actually larger than the group of meritless claims that were paid. The findings appear in the May 11, 2006 issue of The New England Journal of Medicine.

"Some critics have suggested that the malpractice system is inundated with groundless lawsuits, and that whether a plaintiff recovers money is like a random 'lottery,' virtually unrelated to whether the claim has merit," said lead author David Studdert, associate professor of law and public health at HSPH. "These findings cast doubt on that view by showing that most malpractice claims involve medical error and serious injury, and that claims with merit are far more likely to be paid than claims without merit."

The authors reviewed 1,452 closed claims from five malpractice insurance companies across the country. They focused on four clinical categories: surgery, obstetrics, medication and missed or delayed diagnosis, areas that collectively account for about 80% of all malpractice claims filed in the U.S. Specialist physicians in each of these clinical areas reviewed the claims and the associated medical records to determine whether the plaintiff had sustained an injury from care. If an injury had occurred, the physicians judged how likely it was to have been due to medical error.

The reviewers found that almost all of the claims involved a treatment-related injury. More than 90% involved a physical injury, which was generally severe (80% resulted in significant or major disability and 26% resulted in death). The reviewers judged that 63% of the injuries were due to error. The remaining 37% lacked evidence of error, although some were close calls.

Most claims (72%) that did not involve error did not receive compensation. When they did, the payments were lower, on average, than payments for claims that did involve error ($313,205 vs. $521,560). Among claims that involved error, 73% received compensation. "Overall, the malpractice system appears to be getting it right about three quarters of the time," said Studdert. "That's far from a perfect record, but it's not bad, especially considering that questions of error and negligence can be complex." The 27% of cases with outcomes that didn't match their merit included claims that went unpaid even though the injury was caused by an error (16%); claims that were paid but did not involve error (10%); and claims that were paid but did not appear to involve a treatment-related injury (0.4%).

However, the study did not paint a uniformly positive picture of the current malpractice system. The costs of litigating claims, including defense costs and contingency fees paid to plaintiffs' lawyers, averaged $52,521 per claim. Overall, these administrative costs amounted to 54% of the compensation paid to plaintiffs. "Deciding negligence is a very expensive process," said Studdert. The authors also found that it took an average of five years from injury to resolution of the claim-a long time for plaintiffs to wait for compensation and for defendants to endure the uncertainty that litigation entails.

Finally, the authors found that the claims that did not involve errors absorbed a relatively small piece of the costs of compensation. Eliminating those claims would decrease the system's compensation and administrative costs by no more than 13% to 16%. "Many of the current tort reform initiatives, such as caps on noneconomic damages, are motivated by a perception that 'jackpot' awards in frivolous suits are draining the system," explained Michelle Mello, an associate professor of health policy and law at HSPH and a co-author of the study. "But nearly 80% of the administrative costs of the malpractice system are tied to resolving claims that have merit. Finding ways to streamline the lengthy and costly processing of meritorious claims should be in the bullseye of reform efforts."

Harvard School of Public Health