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Insurance Premiums Not Influenced by Patient Lawsuits; Doctor Malpractice Payouts to Victims Have Significantly Declined

Sept. 7, 2005

Insurance Premiums Not Influenced by Patient Lawsuits; Doctor Malpractice Payouts to Victims Have Significantly Declined

Overall Number of Doctors, Including Specialists, Has Risen Much Faster Than the Population

SEATTLE – The number and value of medical malpractice payments made to patients on behalf of Washington doctors have declined significantly, according to an analysis of federal government information released today by the national consumer group Public Citizen. Jury verdicts have remained flat, and million-dollar payments – another frequent target of critics – have fallen significantly, not increased, in recent years, according to the analysis.

Meanwhile, the study found that the number of Washington state doctors has increased well beyond the growth in population over the past decade, and there has been even greater growth in board-certified specialists, such as OB-GYNs, emergency room doctors and internists.

“The specter being raised by the insurance industry and others pushing Initiative 330 – that the legal system is forcing increases in malpractice rates – is a ruse,” said Joan Claybrook, president of Public Citizen. “In reality, the insurance industry is jacking up rates because of the normal business cycle and because investment returns have been lower in recent years. Nothing has occurred in the courtroom to justify the rate increases. The best way to reduce malpractice lawsuits is to reduce malpractice. Washington can do that by disciplining the small percentage of repeat offender doctors who are responsible for a large percentage of malpractice payouts.”

The harm from medical errors is astounding and devastating to families. Tens of thousands of Americans die or suffer major injuries each year at the hands of medical negligence or error. A landmark 1999 study by the Institute of Medicine estimated that 44,000 to 98,000 patients die each year following preventable medical errors in hospitals. Based on population, Washington state’s share of this national death toll ranges from 930 to 2,070. Moreover, other research indicates these findings are conservative.

Key findings in the Public Citizen report (Fewer Lawsuits and More Doctors: The Myths of Washington State’s Medical Malpractice “Crisis”) include:

  • The number of malpractice payments made on behalf of Washington doctors declined 35.6 percent between 1999 and 2004, which includes the supposed worst years of the current medical malpractice “crisis,” according to data from the National Practitioner Data Bank (NPDB).
  • There was a 42.2 percent drop in the total value of Washington doctors’ medical malpractice payments between 1997 and 2004, when adjusted for medical inflation. The inflation-adjusted peak in 1997 was $50.7 million, compared with $29.3 million in 2004. The drop between 2002 and 2004 was 30.6 percent.
  • The number of million-dollar payments has declined from a high of 10 in 1997 to two in 2004; jury verdicts have remained flat at about 3.2 percent of all payments since 1991.
  • Rather than providing windfalls to patients with minor injuries, Washington doctors’ malpractice payments overwhelmingly benefit those most seriously injured by doctors. The most serious cases account for 84.9 percent of all payments made, compared to only 15.1 percent of all payments for minor injuries.
  • The population-adjusted number of malpractice filings is down 23.1 percent since 1995, dropping from 9.41 per 100,000 people in 1995 to 7.24 in 2004.
  • Malpractice payouts attributable to obstetrics cases – doctors say OBs are among the hardest hit by lawsuits – are down significantly. The number of payments attributable to OB cases fell 25.4 percent between 1994 and 2004, while the value plummeted by 65.9 percent.

A major finding in Public Citizen’s analysis of NPDB data is that just 4 percent of Washington doctors have been responsible for 48.1 percent of all malpractice payouts to patients between 1990 and 2005. Only 19.9 percent of doctors with three or more malpractice payouts have been disciplined, and less than half (44.7 percent) of doctors with five or more malpractice payouts have been disciplined. About 85 percent of Washington doctors have never had a malpractice payout made on their behalf, the data show.

“Preventing bad medical care, not preventing injured patients from seeking compensation through the legal system, is the real problem that Washington state voters should fix when they vote in November,” said Claybrook. “That means opposing Initiative 330 and supporting Initiative 336, which would take steps to reduce the incidence of medical malpractice, thereby reducing the need for patients to go to court, and would require notices and hearings of malpractice insurance premium increases before they are imposed.”

The study also found that, contrary to claims, doctors are not fleeing Washington state:

  • The number of Washington doctors has increased from 294.3 doctors per 100,000 residents in 1993 to 322.9 per 100,000 in 2005, according to analysis of Washington Department of Health data. And the number of newly licensed physicians has grown 20.2 percent over the past decade, adjusted for population increases.
  • Specialty practices in Washington increased sharply between 1992 and 2004, according to analysis of American Board of Medical Specialties data. The number of obstetricians per person grew by 21 percent, the number of emergency physicians grew by 52 percent, and the number of internists grew by 28 percent. The number of surgeons remained flat.

“It is shocking that doctors have had rallies and protests about insurance rates when the doctors control the major malpractice insurance company that is doctor-owned, and this company recently was ordered to refund $2.25 million in overcharges made between 2003 and 2004,” Claybrook said. “Meanwhile, the number of doctors is growing faster than the population, and bad doctors are rarely disciplined. What doctors are presenting to the public is untrue. Instead of attacking victims, the doctors should clean up their own house.”

On the November ballot, Initiative 330 would generally cap non-economic damages at $350,000 no matter how severe the injury from malpractice, shorten the time limit patients have to file a case, limit patients’ attorney fees but not doctors’ attorney fees, require advance notice of lawsuits and dramatically strengthen health care providers’ ability to enforce mandatory arbitration without trial.

“Washington voters need to know that the business-backed measure, while purporting to protect patients, is really against their best interests,” said Claybrook. “Washington state is simply the latest place where doctors, insurers, HMOs and the pharmaceutical industry are using a trumped-up crisis to try to insulate themselves from accountability, and in the case of insurers, pad their profits.”

The NPDB reports on malpractice payments made for doctors by malpractice payers, such as insurance companies, state-run insurance funds and self-insured health care providers. Those making malpractice payments are required under federal law to report them to the NPDB. The NPDB also contains information about disciplinary actions against doctors. Overall, the NPDB provides information that can be queried by those employing doctors or granting clinical privileges. While the NPDB provides the numbers and amounts of malpractice payments, there is no public disclosure of the names of the doctors.

Anesthesiologists present a remarkable case illustrating how doctors can work to curb malpractice, according to The Wall Street Journal. Concerned about patient safety and malpractice, anesthesiologists have made a systematic effort to improve their performance. The results have been striking, showing that a focus on safety not only significantly improves outcomes for patients but also keeps down malpractice insurance costs for physicians. Anesthesiologists now pay an average of $21,000 a year for malpractice insurance, which is less than what they paid 20 years ago, adjusted for inflation. Meanwhile, use of devices to alert physicians to potentially fatal problems in the operating room have, over the past 20 years, reduced the number of patient deaths due to anesthesia from one death in every 5,000 cases to only one death in 200,000 to 300,000 cases.

To read Public Citizen’s full report, click here.

To read Joan Claybrook’s statement, click here.