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NEJM: Analysis tallies cost of medical malpractice claims

Study finds lawsuits cost tens of thousands and vary across specialties

April 06, 2012

Defense costs associated with resolving medical malpractice claims can cost tens of thousands of dollars and vary considerably across physician specialties, according to a letter published in NEJM.

For the analysis, Massachusetts General Hospital researchers analyzed defense costs associated with 26,853 malpractice claims closed between 1995 and 2005 among 40,916 physicians covered by a nationwide professional liability insurer. Defense costs included expert witnesses, lawyers' fees, research costs, and overhead costs like filing fees.

The analysis showed that the average malpractice claim cost about $23,000. However, cases that resulted in indemnity payments cost about $45,000, compared with roughly $17,000 for other cases. According to letter coauthor Anupam Jena, claims that lead to payment typically cost more because closing takes longer—sometimes two years or more.

Costs vary by specialty
In addition, the results showed that costs varied substantially by specialty, with paid claims averaging $83,056 in cardiology and $78,890 in oncology, compared with $24,007 in dermatology and $23,780 in ophthalmology. Claims that involved no patient payments were lower on average but still varied widely, according to the analysis.

"Although the costs of dispute resolution are higher for claims that result in indemnity payments, there is still a meaningful cost of resolving claims that never result in payment," the researchers wrote. "Lowering the costs of dispute resolution could lead to considerable savings for physicians and insurers."

For example, Jena noted that a disclosure, apology, and compensation program at the University of Michigan Health System helped the organization reduce the number of malpractice lawsuits, in addition to reducing costs and the time it takes to resolve claims (Marcus, HealthDay, 4/4; Fiore, MedPage Today, 4/4).

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