Report: Medical malpractice costs $55B

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Report: Medical malpractice costs $55B

by Heather Mayer, DOTmed News Reporter | September 07, 2010
Medical malpractice costs reach $55 billion every year, or 2.4 percent of annual health care spending, according to a new Health Affairs report. While high, it fell short of previous estimates, the researchers said.

According to a 2006 report, medical malpractice costs were estimated to be 10 percent of total annual health care spending, said Michelle Mello, professor of law and public health at Harvard School of Public Health.

Lead researcher Mello and fellow researchers at Harvard and Brigham and Women's Hospital in Boston studied various components of the medical liability system, including payments made to malpractice plaintiffs, defensive medicine costs, administrative costs, such as lawyer fees, and costs of lost clinician work time.

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Defensive medicine costs alone were estimated to be $45.6 billion per year, without assessing emotional costs or injury to reputation, according the Health Affairs paper published today.

When it comes to defensive medicine, the costs may be high, but in some cases it buys patients health, explained Mello.

"Sometimes, these services, extras you don't have to have, might be harmful. Sometimes they might have neither harms nor benefits. In a lot of cases, they might have benefits," Mello told DOTmed News.

While tort reform, such as capping noneconomic damages, could reduce liability costs, it is unlikely to greatly affect overall health care spending, the researchers said in their report.

As it is, explained Mello, medical liability is a small part of overall health care spending.

"Even if you reduce a small number by a lot, it's still a small number," she said. "If you reduce [liability costs] by one-third, which is unheard of, it's still less than 1 percent of overall spending."

What may work, the researchers said, are reform proposals such as moving away from fee-for-service reimbursement.