Five Commonly Held Myths of Medical Malpractice

Due to the large number of medical malpractice claims a year - for everything from mistakes in treatment to an uninformed patient - the topic has wide currency in medical circles. But can you really believe everything you read?

One can easily find common malpractice myths that are both mistaken and misleading in a variety of media, from op-eds and blog postings, to public statements by physicians of all specialties, including those designated as spokespersons for organized medicine.

The 5 Myths of Medical Malpractice are as follows:

1. Malpractice crises are caused by spikes in medical malpractice litigation (i.e., sudden rises in payouts and claim frequency). While this may be natural to believe, both federal and state studies have found that both the frequency of malpractice claiming and the frequency of paid medical malpractice claims per physician has been dropping steadily since 1992, and is now less than one-half the level it was in 1992.


2. The tort system delivers "jackpot justice." This basic charge is that the system doles out compensation randomly - uninjured patients take home millions, whereas those who suffer grievously receive little or nothing at all. A far larger and more realistic problem, however, is that an enormous fraction of patients who are harmed by medical negligence either make no effort to recover damages or cannot find lawyers willing to take their cases. These patients, who are entitled to compensation, never initiate claims. Thus, the liability system is simultaneously beset by overclaiming and underclaiming.


3. Physicians are one malpractice verdict away from bankruptcy. Many physicians seem to believe that malpractice verdicts threaten to wipe out their savings. In reality, out-of-pocket payments by physicians are extraordinarily rare, particularly when physicians have policy limits of or above $500,000. When payments above the policy limits are made, whether in tried or settled cases, they almost always come from insurers.


4. Physicians move in large numbers to states that adopt damages caps. If physicians relocate because of liability risk, damages caps are an obvious strategy for attracting more physicians, particularly in lawsuit-prone specialties. Although a nationwide cap would actually reduce relocations by making this incentive disappear, studies have shown that physician supply was not measurably stunted prior to reform, and it did not measurably improve after reform. While damages caps may play a small role in attracting and keeping physicians practicing in rural areas and in high-risk specialties, the evidence is mixed, and some studies have found no effect.


5. Tort regorm will lower health-care spending dramatically. When it comes to the malpractice liability system, it is important to distinguish between the direct costs (cost of malpractice awards and settlements and all costs associated with defending against such claims) and indirect costs (incurred when providers take steps to reduce their perceived likelihood of being sued, such as by running extra tests). Because tort reforms make lawsuits less likely and less expensive, they may reduce defensive medicine and thereby reduce healthcare spending, but since the direct costs of the malpractice system are on the order of 2% of health-care spending, any costs would not be affected dramatically.