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What Good Is Medical Malpractice Insurance?

Injury litigation hounds doctors — but we haven’t built better options for pursuing medical mistakes.

By Elena Gooray


Joan Rivers in 2004. (Photo: Astrid Stawiarz/Getty Images)

The family of Joan Rivers reached a medical malpractice settlement last week over the legendary comedian’s death. Rivers was placed in a medically induced coma in late August of 2014 and died a week later after undergoing routine procedures at an outpatient clinic, whose doctors have accepted responsibility for the death. Rivers’ daughter, Melissa, said she hopes the settlement will encourage better safety practices in outpatient clinics. But the broader landscape of medical malpractice — and the billions of dollars going toward insurance and medical mistakes — is muddier.

Although states vary in their requirements for malpractice insurance, many doctors buy coverage for protection against lawsuits. Throughout the early 2000s, costs to doctors soared, leading some to declare an emerging “crisis” for medical professionals.

While physicians’ overall malpractice payments have actually declined in recent years, concerns remain over bloat in the system and potential negative effects on quality of care. The vast majority of malpractice-related spending has been found to go toward litigation and other overhead costs, rather than payments to harmed parties, according to one 2004 study.

Maybe we over-litigate in medicine, but our medical system also produces a lot of mistakes.

Health-care professionals have expressed concern that fears of litigation encourage “defensive medicine,” where physicians make decisions based not on what’s best for the patient, but on what will help them avoid a lawsuit. And malpractice claims are frequent: A 2011 study found that one in 14 doctors faced a claim each year. In fact, by the time they turned 65 years old, 75 percent of doctors in lower-risk specialties — such as family medicine — and 99 percent of doctors in higher-risk specialties — like emergency care — had received at least one claim.

Relatively high rates of malpractice suits point to a two-sided problem: Maybe we over-litigate in medicine, but our medical system also produces a lot of mistakes. A report released last month estimates that medical errors may be the third leading cause of death in the United States (though whether all those deaths were truly preventable is up for debate). As long as lawsuits remain the primary means for injured parties or their loved ones to get recourse, a beefed-up medical litigation business will be here to stay.

Different proposals for reforming malpractice insurance have bounced around over the years, with some states adjusting their civilian laws, by capping the amount of non-economic damages someone can claim in a malpractice case. This April, Republican lawmakers in Alabama proposed a less common approach: a “Patient Compensation Board,” a controversial solution considered in Maine, Georgia, Florida, and Tennessee, and lobbied for by a Georgia-based non-profit. Administered by state health departments and consisting mostly of physicians, such boards would take the place of the courts in determining payments for medical injuries (a sort of cousin to state-run medical insurance funds, whose success has been mixed).

Some lawmakers are so fed up with the litigation side of medical disputes that they’re trying to get rid of it altogether. But these bills have yet to pass in any state, meaning medical malpractice fights probably won’t start going (legally) rogue any time soon.