It is often claimed that fear of medical malpractice litigation raises medical costs. The logic underlying this argument is that doctors order unnecessary tests or procedures simply to protect themselves in the event of a lawsuit. These pointless and legally-motivated medical procedures end up increasing the overall cost of healthcare for patients and insurers.
This theory is sometimes used to criticize law firms that specialize in medical malpractice, implying that these attorneys are responsible for America’s increasing problem with high healthcare costs. However, a new study from the RAND corporation shows some compelling evidence that fear of malpractice litigation has no real impact on healthcare costs.
The RAND study analyzed millions of medical records from the states of Georgia, Texas, and South Carolina. These are states which have changed their medical malpractice laws to make it nearly impossible for patients to sue emergency department doctors for medical malpractice. In these states, the standard for a malpractice lawsuit has been changed to “gross negligence”, meaning that a patient can only sue a doctor if that doctor knew that a treatment would cause serious injury, and chose to perform it anyway. This is a nearly impossible legal standard to meet.
The study found that before and after the move to a “gross negligence” legal standard, medical costs basically did not change. Texas and South Carolina experienced no change at all in medical costs based on the change to malpractice law, and Georgia experienced only a 3.6% decline in costs.
This discovery completely deflates the idea that physicians practicing “defensive medicine” in response to legal fears are to blame for high healthcare costs. The lead author of the study Dr. Daniel Waxman directly confirmed this conclusion, stating, “If you’re looking at ways to decrease our national spending on health care or reduce waste, then you’re going down a blind alley if you’re spending your time thinking about malpractice reform.”
It turns out that in general, doctors “are less motivated by legal risk than they themselves believe,” and that really most doctors are motivated to provide quality care. As Reuters notes, “No doctor wants to be sued. But doctors also don’t want to make mistakes. They don’t want to cause harm. They don’t want to say no to patients. So everything favors doing more. There are reasons to be faulted for not doing more, and very little pushback if you don’t.”
The bad news in this equation is that although limiting malpractice laws does not reduce healthcare costs, it does reduce malpractice lawsuits and payouts. Since the move to a “gross negligence” standard in Texas in 2003, malpractice lawsuits have dropped by 60% and payouts have dropped by 70%. This means that patients and healthcare consumers now have less options to receive compensation for negligent care, without receiving any real benefits in terms of cost savings.
In other words, restrictive medical malpractice laws hurt the average patient by weakening legal options in the event of malpractice. Since there’s no real cost savings in return for these lost legal options, consumers are ultimately hurt by worsened malpractice protections.
At Wormington & Bollinger, we believe that every hospital patient and healthcare consumer has the right to quality care and compassionate legal representation. If you or a loved one has been a victim of medical negligence or malpractice, our team of attorneys is standing by to help you find peace and closure and get the settlement you deserve. Contact us today to learn more and receive a free legal consultation.