Medical Malpractice Payments Not Behind Soaring Medical Costs

If you are looking for what is behind rising health care costs, the answer is NOT to be found in medical malpractice lawsuits.  A new study by Public Citizen shows no correlation between medical malpractice payments and health care costs.  Since 2003, both the frequency of medical malpractice payments on behalf of doctors and the amount of money paid out have fallen every single year, according to the government’s National Practitioner Data Bank (NPDB), which tracks such payments.

In 2012, the number of payments fell to the lowest level on record, setting a new record low for the sixth consecutive year.

Since 2003, medical malpractice payments have fallen 28.8 percent.

If, in fact, medical malpractice litigation were truly the “biggest cost driver” in medicine, as Speaker of the House Rep. John Boehner (R-Ohio) has stated, then wouldn’t you expect declining payments to have pulled overall healthcare costs down?  Instead the nation’s health care bill has risen 58.3 percent since 2003.  The study says “if health care costs followed the trajectory of litigation trends since 2003, our national health care bill in 2012 would have been $1.3 billion. Instead, it was $2.8 billion.

Here’s somewhere else to look for explanations:  the increase in doctors’ pay.  According to Modern Healthcare , which conducts an annual doctors’ compensation survey, pay for physicians in six specialties (Anesthesiology, Cardiology, General Surgery, Internal Medicine, Ob-Gyn, and Radiology) have seen their pay rise from 24.3 percent (ob-gyn) to 82 percent (radiology) from 2003 to 2013.  For all specialties but one, pay raises have exceeded inflation.  Also, Modern Healthcare reports that compensation for health care system CEOs rose at more than twice the rate of inflation from 2003 to 2012 (to over $1.1 million annually on average).  Pay increases for chief medical officers and chief financial officers also far outpaced inflation.

Medical malpractice has been singled out by many lawmakers (state and federal) as the culprit for rising health care costs.  The data here certainly doesn’t support that.  Lawmakers should instead focus on driving down medical errors and holding responsible those who make them.

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