Please wait while the search results are loading...

Malpractice Suits Are Blamed for Rising Health Care Costs/Tort Reform Is Capping Awards for Damages, Business and Industry Trends Analysis

Health care costs have long been a hot political topic, and many people have pointed at malpractice lawsuits as a primary cause of rising costs.  For years, punitive lawsuits for pain and suffering have levied huge settlements from doctors, hospitals and their insurers.  In reaction, premiums for malpractice insurance have burgeoned, growing far faster than the costs for any other type of insurance.  Doctors and hospitals, in order to offset malpractice insurance premiums, may raise their own fees and conduct extensive, and often unnecessary, tests in order to protect themselves from legal claims.  These factors contribute significantly to the overall cost of health care in the U.S., and a political battle has ensued, particularly between lobbyists for plaintiffs’ lawyers and lobbyists for the health care industry.
There is wide disagreement about the causes and actual yearly combined costs of malpractice insurance, litigation, lawsuit awards and defensive medical procedures and tests intended to lessen the likelihood of a malpractice lawsuit loss.  A 2013 Jackson Healthcare survey found that 75% of doctors order more tests, medications and procedures than are medically necessary to protect themselves from lawsuits.
In addition to adding immense costs to the health care system, malpractice lawsuits have done much to erode the relationship between doctors and their patients.  At the same time, fear of malpractice suits can discourage young physicians from pursuing higher-risk specialties, such as obstetrics and emergency room care, rather than fields where they are much less likely to be sued.  Relations between doctors and lawyers have also become strained, with many doctors blaming the situation on some lawyers’ willingness to take even the most frivolous cases.  Malpractice insurance premiums vary widely, according to the type and location of the practice.
Self-interest has caused some physicians to respond.  Reports have been published of physicians refusing to treat attorneys, their families or their employees except in cases of emergency.  Meanwhile, many would-be patients have learned how hard it can be to get a physician in high-risk fields, such as obstetrics and gynecology, to take a new client.
Many states are tackling the malpractice awards issue through referenda and legislation that limit total damage awards.  Texas, after suffering years in which more than 50% of practicing physicians were hit with malpractice suits, passed legislation to limit awards given to plaintiffs for “non-economic” damages, which include pain, inconvenience, suffering and disfigurement.  Dozens of states have now limited non-economic damages in medical malpractice cases, generally to amounts between $250,000 and $500,000 dollars.  The statutes also generally limit the amount that lawyers can make off such cases via contingency fees, making sure that the plaintiff receives a substantial portion of the reward.  Some critics of this move see such laws as contributing to a failure of the justice system.  Others feel that a $250,000 to $500,000 award cap is not fair payment for a patient who has been severely disfigured for life.
On the other hand, there may be few limits on the amount of “economic” damages awarded to a patient—that is, loss of earnings due to the inability to function fully at a job or profession.  Patients who earn extremely high salaries may seek damages that are proportionately high—even multimillion-dollar amounts.  However, attorneys may be discouraged from taking, on contingency, clients who work in low-paying jobs or have very complicated cases.
As in any other legal matter, there are two sides to the story; arguments for and against malpractice award limits abound.  California is often named as the poster child for how effective such legislation can be in lowering insurance premiums and health care costs in general.
Texas enjoyed stunning success as a result of its tort reform.  Malpractice rates fell with more than 30 malpractice insurance firms competing for business in the state.  Texas experienced a resurgence in the numbers of practicing physicians as well since malpractice insurance premiums dropped significantly.  The number of malpractice lawsuits in Texas has been cut dramatically.
Meanwhile, the costs and challenges of lawsuits are not limited to physicians.  Every sector of the health chain, from equipment makers to hospitals to drug makers, is swamped by lawsuits, and they are forced to pass along the costs of insurance and litigation in the form of higher fees charged to patients.  Tort reform is beginning to take hold for these sectors as well.  It is worth noting that the 2010 Patient Protection and Affordable Care Act (ACA) did not make any provision for limiting malpractice damages.

Internet Research Tip:  Malpractice Awards
The National Practitioner Data Bank, www.npdb.hrsa.gov, is a federal initiative that collects data on malpractice lawsuit awards and license revocations, on a state-by-state basis.  It publishes annual reports that provide detailed information.


A Representative List of Organizations that Have Used our Research and Products:

Testimonials

I’m amazed at how much information is available and the various ways to access it. This will be a major resource for our serious job seekers.

Career Services, Penn State University

Plunkett Research Online provides a great ‘one stop shop’ for us to quickly come up to speed on major industries. It provides us with an overall analysis of the market, key statistics, and overviews of the major players in the industry in an online service that is fast, easy to navigate, and reliable.

Wendy Stotts, Manager, Carlson Companies

I really appreciate the depth you were able to get to so quickly (for our project). The team has looked through the material and are very happy with the data you pulled together.

Hilton Worldwide, Marketing Manager

We are especially trying to push Plunkett since all of our students have to do so much industry research and your interface is so easy to use.

Library Services, St. John’s College

We are especially trying to push Plunkett’s since all of our students have to do so much industry research and your interface is so easy to use.

Gary White, Business Materials Selector, Penn State University

Your tool is very comprehensive and immensely useful. The vertical marketing tool is very helpful, for it assists us in that venue, as well as targeting customers’ competition for new sales…The comprehensive material is absolutely fabulous. I am very impressed, I have to say!

Tammy Dalton, National Account Manager, MCI

The more I get into the database, the happier I am that we’ll have it–REALLY happy!!! Between the quality and affordability of your product, its appeal to and value for our users, and the inestimably ethical and loyalty-guaranteeing conduct of your business, I will always have more than sufficient praises to sing for Plunkett Research.

Michael Oppenheim, Collections & Reference Services, UCLA

Plunkett Research Online is an excellent resource…the database contains a wealth of useful data on sectors and companies, which is easy to search and well presented. Help and advice on how to conduct, export and save searches is available at all stages.

Penny Crossland, Editor, VIP Magazine
Real Time Web Analytics