Less than 40% of Med-Mal Money Goes to Plaintiffs: Study

Plaintiffs receive only 38% of the total dollars that flow through the malpractice litigation system, according to a recent study by the Employment Policy Foundation (EPF) in Washington, D.C.

EPF says the bulk of the of the money goes to plaintiff's lawyers, expert witnesses, claims adjustment and investigating and defending claims. "The malpractice litigation system is a highly inefficient method for identifying and correcting medical errors," EPF says in a release.

"Its primary impact is to increase costs that employers and employees pay for health insurance, to reduce the number of employees and their families covered by affordable employer sponsored health plans and to reduce access to health care in communities impacted by physician flight from liability risks," the group says.

Studying malpractice insurance data, EPF also finds that:

• Malpractice insurance underwriting losses doubled from $4.1 billion in 1991 to $8.6 billion in 2001.
• Median jury awards in malpractice cases doubled from $500,000 to $1 million for the typical case from 1995 to 2001, with the highest award in the U.S. rising from $5.3 million to $20.7 million over the same period.
• Insurers' underwriting losses exceeded premiums collected in 2001 by $4,033 per physician, assuming that all 744,000 full-time physicians in the U.S. were covered.
• Premium increases since 1999 have been most severe for specialties of obstetrics (46.5%), surgery (58.1%) and internal medicine (62.3%).
• Caps on non-economic damages could save $54.8 billion to $97.5 billion annually.
• Controlling excesses in the malpractice litigation system could reduce current health care costs by 5% to 9% without sacrificing quality of care.
• Excess costs of uncurbed malpractice litigation result in the loss of healthcare coverage for 1.5 million to 2.7 million employees and their families.