Medical Liability

At a time of mounting concerns about health care costs, America’s broken medical liability system stands as a major culprit – raising costs and hampering quality of care for millions. While many states have adopted successful reforms, sky-high medical liability costs remain a significant problem nationally. read more...

In 2010, medical malpractice costs were approximately $29.8 billion.  According to research by Towers Watson, medical malpractice costs have increased at an average annual rate of 9.7 percent since 1975 versus 7.5 percent for all other tort costs.

The costs of medical liability are exacerbated by the filing of meritless lawsuits.  A study from the Harvard School of Public Health found that as many as 40 percent of medical malpractice lawsuits they reviewed were groundless, meaning there was no evidence that a medical error was committed or that the patient suffered any injury.  These cases waste court resources and force defendants to expend unnecessary funds to defend themselves – thus increasing the costs of medical liability, and ultimately, healthcare costs generally. 

Further, healthcare costs continue to rise because of the practice of “defensive medicine.”  In response to increasing medical liability risks, doctors are ordering unnecessary tests and procedures as a way to protective themselves from liability.  A 2010 survey by Mount Sinai School of Medicine researchers found that 91 percent of physicians believe concerns over malpractice lawsuits result in “defensive medicine.”

And it is not just the cost of healthcare that is affected by medical liability costs – healthcare quality is also impacted.  The availability of some higher-risk medical specialties, such as OB-Gyn physicians, is becoming scarce as a result of high insurance premiums resulting from lawsuits.

According to a 2009 analysis by the Congressional Budget Office, the healthcare savings from proposed medical liability reforms, such as caps on non-economic damages and other reforms, would lower healthcare costs by as much as two percent–or about $35 billion per year. 

While Congress has tried to pass meaningful medical liability reform in recent years, many states have successfully lowered their medical costs and increased the availability of care by passing medical liability reforms.

California was a pioneer when in 1975 it passed the Medical Injury Compensation Reform Act (MICRA), which placed a $250,000 cap on non-economic damages in medical malpractice lawsuits and limits on attorney contingency fees. Since its passage, claims in California are settled in one-third less time than in states without caps on non-economic damages. The law has been so successful that plaintiffs’ lawyers are threatening to run a ballot initiative that would obliterate the caps.

Many states have passed reforms modeled after MICRA, perhaps most notably Texas. Facing an extreme shortage of physicians and medical facilities and soaring medical liability costs, Governor Rick Perry signed into law sweeping medical liability reforms in 2003 that placed a $250,000 limit on non-economic damages against doctors and healthcare providers and an overall cap of $500,000 against healthcare facilities. Since Texas passed the reforms, lawsuits against hospitals have decreased by more than two-thirds, and the state added more than 80 practicing obstetricians in one year.

About 30 states have enacted some type of law placing limits on medical malpractice awards:

Alabama, Michigan, Alaska, Minnesota, Colorado, Missouri, Delaware, Montana, Florida, Nebraska, Hawaii, New Hampshire, Idaho, New Mexico, Illinois, North Dakota, Indiana, Ohio, Kansas, Oklahoma, Louisiana, Oregon, Maryland, South Dakota, Utah, Massachusetts, Virginia, West Virginia, Washington


 

Research

101 Ways to Improve State Legal Systems: A User's Guide to Promoting Fair and Effective Civil Justice

September 10, 2015 | 101 Ways to Improve State Legal Systems offers some of the many options available to foster a sound legal system. It considers fair and effective measures to improve the litigation process, promote rational liability rules, and rein in excessive awards.

The ILR Research Review - Volume 2

May 18, 2015 | The ILR Research Review offers valuable insights from our preeminent experts and specialists on key topics addressed in the latest of ILR's research reports.

All Results for Medical Liability

The Trial Lawyer Underground: Covertly Lobbying the Executive Branch

Author: Victor E. Schwartz and Cary Silverman, Shook, Hardy & Bacon L.L.P. | September 30, 2015 | Research

This report highlights examples of the quiet and effective influence the American Association for Justice, the organization that lobbies on behalf of the plaintiffs' bar, exerts within the Executive Branch. Read More »

101 Ways to Improve State Legal Systems: A User's Guide to Promoting Fair and Effective Civil Justice

Author: Victor E. Schwartz and Cary Silverman, Shook, Hardy & Bacon L.L.P. | September 10, 2015 | Research

101 Ways to Improve State Legal Systems offers some of the many options available to foster a sound legal system. It considers fair and effective measures to improve the litigation process, promote rational liability rules, and rein in excessive awards. Read More »

The ILR Research Review - Volume 2

May 18, 2015 | Research

The ILR Research Review offers valuable insights from our preeminent experts and specialists on key topics addressed in the latest of ILR's research reports. Read More »

Laboratories of Tort Law: A Three-Year Review of Key State Supreme Court Decisions

Author: Victor E. Schwartz & Cary Silverman, Shook, Hardy & Bacon LLP | December 04, 2014 | Research

This report highlights significant tort law decisions over the past three years that are examples of particularly sound or unsound rulings. Each analysis examines the tort law principles involved, whether the court followed or deviated from these principles, and the court's reasoning in reaching its decision. Read More »

In The News Today - November 6, 2014

November 06, 2014 | Insights

An op-ed in the Wall Street Journal by House Speaker John Boehner and Senate Minority Leader Mitch McConnell highlights "excessive regulations and frivolous lawsuits that are driving up costs for families and preventing the economy from growing" as one of the top priorities for reform under the newly elected Republican majority in the House and Senate. Read More »

Texas Legal Reforms to Play a Part in 'Ebola Lawsuits'?

October 27, 2014 | Insights

The Associated Press today writes about expected litigation from the family of Thomas Eric Duncan, the man who was initially misdiagnosed but then passed away from Ebola after returning from West Africa. Read More »

Judge Refuses to Toss $9 Billion Verdict in Pharmaceutical Bellwether Case

August 29, 2014 | Insights

In a case that sets the tone for future litigation regarding drugmaker liability, U.S. District Judge Rebecca Doherty in Lafayette, Louisiana rejected a bid by Takeda Pharmaceutical Co. and Eli Lilly & Co. to toss a $9 billion judgment against over claims that the companies did not properly disclose the cancer risks of their Actos medicine. Read More »

The Anti-Vaccine Movement And A Trial Lawyer-Funded Climate Of Fear

Author: Lisa A. Rickard | April 28, 2014 | Insights

The most savvy plaintiffs' lawyers understand that in order to create new fields of litigation, up-front investments are often required. Read More »

WATCH: Washington Legal Foundation Briefing on Lawsuit-Generating FDA Generics Labeling Proposal

Author: Harold Kim | April 11, 2014 | Insights

The Washington Legal Foundation, in cooperation with the Generic Pharmaceutical Association and the American Enterprise Institute, held a media briefing to discuss the consequences of the FDA's proposed generic labeling requirement. Read More »

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