Study: Over-Testing, Too Many Unnecessary Procedures, Not Medical Malpractice Payouts, Drive Up the Cost of Health Care

Newly released study findings reveal that medical malpractice payouts are not contributing to rising health care costs in the United States. Rather, said the researchers, costs are rising due to the many tests and procedures being conducted as so-called “defensive medicine,” said The Insurance Journal.

“The notion that frivolous claims are routinely resulting in $100 million payouts is not true,” study leader Marty Makary, M.D., M.P.H., an associate professor of surgery and health policy at the Johns Hopkins University School of Medicine, told The Insurance Journal. “The real problem is that far too many tests and procedures are being performed in the name of defensive medicine, as physicians fear they could be sued if they don’t order them. That costs upwards of $60 billion a year. It is not the payouts that are bankrupting the system—it’s the fear of them,” Makary added.

When reviewing malpractice payouts over $1 million—catastrophic claims—the researchers found that the payments totaled about $1.4 billion annually, significantly less than 1 percent of the medical expenditures in the U.S. Catastrophic claim payouts are typically seen when a patient under one year of age is injured or killed; if a patient develops quadriplegia, brain damage or requires, lifelong care as a result of malpractice; or when the claim is over an anesthesia problem, according to the research, which is published online in the Journal for Healthcare Quality, the Insurance Journal indicated.

Attempts to reduce health care costs in the U.S. have long involved making changes to the medical malpractice system. In fact, some studies have indicated that it has been “frivolous” payouts associated with medical malpractice payouts that have led to health care drains; however the new review of these claims points to over-testing and too many procedures, The Insurance Journal report indicates.

Nationwide medical malpractice claims were analyzed using the National Practitioner Data Bank, which electronically houses all malpractice settlements or judgments since 1986. The team specifically reviewed data from 2004 to 2010 because data on patient age and gender and severity of injury first became available, The Insurance Journal report explained. Makary notes that payout amounts are likely underestimated and by about 20 percent, as information only reflects payments made on behalf of individual providers, not hospitals or other corporations.

In the period studied, 77,621 claims were paid; catastrophic claims comprised 7.9 percent or 6,130 payouts totaling $9.8 billion, which is 36.2 percent of the $27 billion worth of total claims paid over the period studied, said The Insurance Journal. Most catastrophic claim payouts were diagnosis-related (34.2 percent), followed by obstetrics-related (21.8 percent) and surgery-related (17.8 percent) events. Diagnosis errors were associated with a two-fold likelihood of a catastrophic payout that was about $83,000 greater, when compared with equipment- or product-related errors. Physician age was not a factor, which means that inexperience was also not a factor; however, 37 percent of catastrophic payouts involved a doctor who had a prior claim.

Makary says that reducing diagnostic testing and procedure overuse will result in the greatest cost reductions, according to The Insurance Journal.

We recently wrote that another study revealed that diagnostic errors are the most common, as well as the most expensive and dangerous, errors United States physicians make, and lead to roughly 160,000 permanent patient injuries or deaths, according to researchers from Johns Hopkins University. The study was published online in the journal BMJ Quality and Safety.

The researchers reviewed more than 350,000 malpractice claims over 25 years and discovered that diagnostic errors comprised nearly 29 percent of claims and also accounted for the largest chunk of claim payments—35.2 percent of total payments.

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