In Depth
The Facts about Medical Malpractice Liability
10.12.2009
In a vital new study, “The Facts About Medical Malpractice Liability Costs,” Pacific Research Institute economist Dr. Lawrence McQuillan and researcher Hovannes Abramyan reveal the crushing costs of medical liability in the context of the national debate over health care reform. The report provides a methodology for calculating the true costs of medical liability issues, which are ultimately paid by patients and consumers in the form of higher insurance costs, fees for services, drugs, and the availability of services and insurance overall. The various categories analyzed include:
- $5.84 billion annually for medical malpractice tort losses – payments to compensate individuals for injuries and damages claimed as a result of medical negligence.
- $16 billion annually for direct tort costs, which include legal defense costs, underwriting costs, and general administrative expenses for insured and self-insured.
- $10.888 billion annually for medical malpractice liability insurance premiums, which cause physicians and facilities in the worst states to close or leave, causing extreme availability issues in many regions.
- $191 billion annually for defensive medicine costs, or those costs associated with tests and studies ordered by physicians for the sole purpose of protecting against potential lawsuits.
- $41.65 billion annually in lost output and lower productivity from workers either uninsured or lacking access to adequate health care. At least 3.4 million Americans are squeezed out of the health insurance market due to higher insurance premiums tied to defensive medicine costs.
The report concludes with 14 sound proposals for medical liability reforms that could be enacted by the states to reduce the $265.38 billion annual losses outlined above. Click above to read the report.
