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New Report Finds No Link Between Spike in Doctors’ Insurance Rates and Medical Malpractice Lawsuits by Injured Patients

April 19, 2005

New Report Finds No Link Between Spike in Doctors’ Insurance Rates and Medical Malpractice Lawsuits by Injured Patients

Most Recent Government Data Reveal Declining Malpractice Payouts;
Real Crisis Continues to Be Inadequate Measures for Guaranteeing Patient Safety

WASHINGTON, D.C. – The latest national data on physician malpractice payments show no evidence that the spike in doctors’ insurance rates is due to lawsuits by patients, a new study by Public Citizen confirms.

At the same time that insurance rates in some areas have been climbing, the number and total value of malpractice payouts to patients have been flat since 1991 and, in fact, show a significant decline since 2001, when the spike in insurance rates began, the study found.

“The hard, factual evidence cannot be any clearer: We have no medical malpractice lawsuit crisis in America,” said Joan Claybrook, president of Public Citizen. “Insurance companies may be padding their bottom lines by jacking up rates on doctors, but it is not because of patients seeking relief for bad medical care through our courts. The true crisis continues to be in inadequate measures for patient safety and incompetent medical care by a small number of physicians.”

The data show that from 1990 to 2004, only 5.5 percent of doctors account for 57.3 percent of all malpractice payments. In addition, only 11.4 percent of doctors who have made three or more malpractice payouts have ever been disciplined.

The report, Medical Malpractice Payment Trends 1991-2004; Evidence Shows Lawsuits Haven’t Caused Doctors’ Insurance Woes, is available online by clicking here.

Meanwhile, Public Citizen today also released its annual rankings of state medical boards. The rankings, found online here, are based on data from the Federation of State Medical Boards and specify the number of disciplinary actions taken against doctors from 2002 to 2004.

The medical malpractice payment trends report analyzes the most current information from the federal government’s National Practitioner Data Bank (NPDB). The NPDB reports on malpractice payments made on behalf of doctors by malpractice payers, such as insurance companies, state-run insurance funds and self-insured health care providers. Those making malpractice payments are required by federal law to report them to the NPDB. 

The NPDB also contains information about disciplinary actions taken against doctors and provides a repository of data that those employing doctors can query for background checks.

 In analyzing records from the NPDB, Public Citizen found that:

  • The annual number of malpractice payments is down. Despite alarms by doctors and insurers about a “crisis,” the number of malpractice payments paid on behalf of doctors – chiefly by their insurance companies – has fallen over the past three years, from 16,682 in 2001 to 14,441 in 2004, a drop of 13.6 percent. The 2004 number is only 5.5 percent higher than the 13,687 payments recorded for 1991. Adjusting for population growth, the number of payments per 100,000 people has fallen from 5.85 to 4.91 from 2001 to 2004, a decline of 16.1 percent. Since 1991, the number of payments per 100,000 people has dropped by 9.2 percent, from 5.41.
  • The total value of malpractice payments has been flat since 1991. Total malpractice payments increased from $2.1 billion in 1991 to $4.2 billion in 2004. However, from 1991 to 2004, the inflation-adjusted amount has changed little, rising from $2.1 billion to $2.3 billion – an average annual increase of only 0.8 percent.
  • Jury verdicts are not out of control. The median size of payments from judgments appears to have soared, from $125,000 in 1991 to $265,000 in 2004. But adjusted for inflation, the median payment grew from $125,000 in 1991 to $146,100 in 2004 – an average annual increase of only 1.2 percent.
  • There has been a 56 percent decline in million-dollar payouts. The incidence of payments of $1 million or more, adjusted for inflation, is down 56 percent from 1991 to 2004, from 2.25 percent of all payments to just 1 percent of all payments. Even during the so-called “crisis” years between 2001 and 2004 when insurance rates were spiking, the incidence of large payments declined 31 percent, from 1.44 percent of payments to 1 percent.
  • The incidence of surgical and obstetrics payouts has not increased. Although surgeons and obstetricians complain the loudest about malpractice insurance rate hikes, the incidence of surgical and obstetrics payouts is virtually unchanged from 1991 to 2004. In 1991, 9.5 percent of all payouts were for obstetrics cases; in 2004, the figure was the same. Surgical cases accounted for 25.6 percent of payments in 1991, and 26.1 percent of payouts last year.
  • Cases of serious injury to patients continue. Three-quarters of payments for 2004 involved major or significant injuries, or death, and these most severe cases account for 89 percent of the value of payouts made. “Failure to diagnose” cases have grown from 16 percent of payouts in 1991 to 20 percent in 2004, while “improper performance” cases have grown from 10 percent to 15 percent of payouts.

“The evidence shows that the system is working as it should, with minor injuries receiving little compensation and the great bulk of malpractice awards going to cases of major, debilitating injuries – or death,” said Frank Clemente, director of Public Citizen’s Congress Watch.  “Rather than complain about medical malpractice lawsuits, the medical community should address its own failings and strive aggressively to improve the performance and competency of its doctors and better protect patients. That is the surest way to keep both doctors and patients out of the courtroom.”