July 12, 2012 — The number and total value of malpractice payments made on behalf of physicians declined in 2011 for the eighth consecutive year, according to a new study released yesterday by the consumer group Public Citizen.
The study analyzes information from the National Practitioner Data Bank (NPDB), a federal clearinghouse on malpractice payments. Malpractice insurers and other organizations that pay a malpractice claim on a physician's behalf must report it to the NPDB. Payments include jury awards and settlements.
Public Citizen said that the downward trend in payments discredits the argument made by organized medicine and Republican politicians that "medical malpractice litigation is responsible for rising healthcare costs." Also discredited, Public Citizen said, is the push by GOP members of Congress to enact tort reform measures, such as a cap on noneconomic damages, which the watchdog group considers an unnecessary restriction on patients' legal rights.
In turn, tort reform advocates say the annual Public Citizen analysis of NPDB data is misleading because malpractice payments on behalf of physicians frequently go unreported.
The number of those payments in 2011 was 9758, the lowest since the NPDB began tracking them in 1991. The peak year was 2001, when 16,565 payments were reported.
"There is no evidence that the decline...is due to safer medical care," Public Citizen said.
The total dollar value of the 2011 payments was roughly $3.2 billion. Adjusted for inflation, this figure also represents an all-time low. The payments constituted 0.12% of total healthcare costs in 2011, another all-time low. The all-time high was in 1992, when malpractice payments made up 0.3% of healthcare costs.
The average payment in 2011 was $327,561, the lowest amount since 2000 after adjustment for inflation.
Public Citizen said that all these trends undermine the notion that physicians widely practice defensive medicine to avoid malpractice litigation. When the risk of litigation is sharply declining, the group said, "such a conclusion does not stand to reason."
Eighty percent of total malpractice payments were made for death; a major or significant permanent injury; or quadriplegia, brain damage, or other conditions requiring life-long care, "disproving the claim that medical malpractice litigation is frivolous," said Public Citizen.
Are Hospital-Employed Physicians Evading the Data Bank?
Critics of the Public Citizen report have long called the NPDB a poor source of information about malpractice litigation. For one thing, they say, many payments on behalf of physicians never make it into the system. This happens when someone sues both a hospital and a physician and then drops the physician as a defendant before a final settlement or jury award, making the hospital the only responsible party. Payments made on behalf of hospitals do not have to be reported to the NPDB.
Brian Atchinson, president and chief executive officer of the Physician Insurers Association of America (PIAA), said that that this kind of underreporting is increasing as more and more physicians become hospital employees.
Atchinson also said that by relying on NPDB data, Public Citizen ignores malpractice claims filed against physicians that do not result in any payment. They represent the majority of all claims and "can cost $150,000 or more to successfully defend," Atchinson said in an email to Medscape Medical News. "There is obviously a significant monetary cost associated with these meritless claims — not to mention the significant time and emotional toll they take on healthcare practitioners."
To Tom Baker, a law professor and medical liability expert at the University of Pennsylvania in Philadelphia, the NPDB has "the best information there is." He said that citing unreported payments is an unfair public policy argument.
"It's a violation of law not to report claims paid on behalf of doctors," Baker told Medscape Medical News. "If you're doing that, shame on you."
Baker said he agreed with the upshot of the Public Citizen report, calling the campaign for tough tort reforms "an effort to shift responsibility away from people who injure [others] and pretend there's an easy fix to the cost of healthcare." He nevertheless credits tort reform in states such as Texas and California with helping to reduce the number of malpractice payments.
"It's no secret that in the last 20 to 30 years, there's been an assault on people's ability to bring lawsuits," said Baker, author of the 2005 book The Medical Malpractice Myth. "It seems plausible to me that these efforts are partly responsible [for the decline]."
Michael Matray, editor of the Medical Liability Monitor newsletter, agrees. State tort-reform laws are "having a noticeable impact on claims frequency," which are at all-time lows, Matray told Medscape Medical News.
Medscape Medical News © 2012 WebMD, LLC
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Cite this: Malpractice Payments Continue Downward Slide - Medscape - Jul 12, 2012.