Study: 'Frivolous' lawsuits account for 40% of claims, 16% of costs
A study of malpractice litigation claims, published in the May 11, 2006 issue of the New England Journal of Medicine, concluded that 40% of claims were without merit, including those with no evidence of injury (3%) and claims that were not associated with medical errors (37%). However, the study showed that costs associated with these claims represented only 13-16% of the total medical torts costs, and that most claims without merit were denied compensation.
"The vast majority of expenditures go toward litigation of errors and payment of them," the study authors, led by a team of researchers from Harvard School of Public Health, concluded. "The overhead costs of malpractice litigation are exorbitant."
The researchers examined 1,452 claims from five malpractice insurance companies in four regions of the
"Overall, 73% (1,054 of 1,441) of all claims for which determinations of merit were made had outcomes concordant with their merit," the authors reported. However, "nonpayment of claims with merit occurred more frequently (16%) than did payment of claims that were not associated with errors or injuries (10.4%)."
Fifty-six percent of the claims received compensation, at an average of $485,348. "However, plaintiffs rarely won damages at trial, prevailing in only 21% of verdicts as compared to 61% of claims resolved out of court," the study reported. Nearly 80% of administrative expenses related to the resolution of claims that the researchers determined to have merit due to "harmful errors."
In conclusion, the authors stated that "moves to combat frivolous litigation will have a limited effect on total costs. Substantial savings depend on reforms that improve the system's efficiency in handling of reasonable claims for compensation."
Source: "Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,"