Medical Malpractice Tab Now Greater Than $55B Annually, Study Finds

The medical liability system was responsible for $55.6 billion, or 2.4%, of total U.S. health spending in 2008, according to a study published on Tuesday in the journal Health Affairs, the New York Times reports.

The study found that more than eight of every 10 dollars spent on medical liability -- or $45.6 billion -- were attributed to defensive medicine practiced by physicians concerned about potential malpractice lawsuits (Sack, New York Times, 9/7).

The study found that total malpractice payments were $5.72 billion in 2008.

Study Limitations

The researchers -- from the Harvard School of Public Health and the University of Melbourne in Australia -- noted that the study was compromised in several ways. For example, there is no comprehensive system for tracking damage costs related to malpractice.

The researchers used the National Practitioner Data Bank, compiled by the Health Resources and Services Administration, which they wrote "comes closest" to compiling those numbers.

In addition, the researchers noted that they did not include the actual cost of malpractice insurance premiums in their calculations because such premiums estimate insurers' estimates on damages and legal defense costs -- along with operating expenses and profits -- which would make counting them redundant (Fox, Reuters, 9/7).

Malpractice Costs in the Reform Debate

The researchers wrote that while costs associated with liability are "not trivial," they are "less than some imaginative estimates put forward in the health reform debate."

The health reform law does not make substantial changes to the medical liability system. The study authors wrote, "Reforms that offer the prospect of reducing these costs have modest potential to exert downward pressure on overall health spending," adding, "Reforms to the health care delivery system, such as alterations to the fee-for-service reimbursement system and the incentives it provides for overuse, probably provide greater opportunities for savings" (New York Times, 9/7).