Medical Malpractice


Preventable injuries caused by medical errors are widespread and costly, with estimates as high as one million injuries per year. They result from flaws in the complex interactions among health care professionals, sophisticated technologies, medical products, and organizational systems. They also can arise from individual negligence, impairment, and incompetence. A 1999 report (To Err Is Human: Building a Safer Health System) by the Institute of Medicine, which changed its name in 2015 to the National Academy of Medicine, attributes most preventable medical injuries to system failures, not to an individual practitioner’s negligence or incompetence.

Preventable medical injuries may be subject to redress under medical professional liability law—also known as medical malpractice—which is a subset of tort law that deals with professional negligence. There are other areas of tort liability that may pertain to users of health and long-term services and supports (LTSS) but are distinct from medical malpractice. These include product liability (e.g., for defective drugs or devices) and liability for injury resulting from neglect or abuse, such as in a nursing home or other LTSS setting.

A systems-oriented approach to preventing medical injury focuses on learning how and why errors occur and developing and implementing systems to avoid them. Yet, most discussions concerning preventable medical error and injury have so far focused on medical malpractice law instead of on the error or injury itself. Tort liability continues to be attacked as a source of problems in America’s health care system. However, medical malpractice premiums make up less than 1 percent of total health care expenditures. The systemic cost of the medical liability system, including defensive medicine, has been estimated at 2.4 percent of total health care spending.

The estimated number of medical injuries nationally may be as high as one million per year, but only about 85,000 malpractice suits are filed annually. Since the early 1990s, the number of settlements and judgments of malpractice claims reported to the National Practitioner Data Bank (NPDB) has remained at fewer than 15,000 per year. Physician-advocacy groups say that 60 percent of liability claims against physicians are dropped, withdrawn, or dismissed without payment. Most malpractice claims that are settled (73 percent) involve medical error. Only about 3 percent of claims are not associated with injuries. According to the NPDB, just 5 percent of physicians account for 54 percent of malpractice payouts.

From a patient’s perspective, the most important purposes of the medical malpractice system are to compensate negligently injured patients and to deter unsafe health care practices that lead to injury. A variety of solutions to the current problems in the medical malpractice system have been proposed and, in some cases, implemented. Perhaps the most controversial is a limit or cap on nonfinancial damage awards. Nonfinancial damages are likely to constitute a larger share of awards to older or retired individuals or people with low incomes. Thus, such caps would exclude a larger portion of their legitimate potential claims and, therefore, would disadvantage these groups the most. Caps of varying levels on nonfinancial damages have been imposed in more than half the states. But several have been struck down as unconstitutional or have been repealed.

To be effective in the long run, approaches to address problems in the current medical malpractice system must both reduce the number of preventable medical injuries and offer appropriate compensation for those who are injured despite improved safety efforts. One alternative approach to malpractice reform would be a non-judicial injury compensation system as described by the National Academy of Medicine (formerly Institute of Medicine). Such a system would compensate people and their families for avoidable injuries based on a predetermined award schedule. Providers would be required to report and analyze medical errors, implement programs to reduce medical injury, and involve patients in safety improvement efforts.

Another approach to malpractice reform has been to encourage providers to openly acknowledge their errors, apologize to patients, and quickly offer compensation. This approach, often referred to as “sorry works,” helps patients find answers to what went wrong in their care and how the problem has been addressed. In one example of this approach, the University of Michigan Health System adopted new policies on medical errors in 2002. Since then, the health system has cut its litigation costs in half, while the number of new claims and the time required to resolve claims have both plummeted. The “sorry works” approach has been facilitated in several states that have adopted laws preventing a doctor’s apology or expression of remorse from being used against him or her in court.

The Affordable Care Act authorized grants to states to establish demonstrations to evaluate alternatives to the current tort litigation approach to medical malpractice. The Department of Health and Human Services has allocated $25 million for three-year grants allowing states to test models that emphasize patient safety, disclosure of medical errors, and alternative dispute resolution. Patients will be allowed to opt out of these alternatives at any time.



Malpractice reform

Any efforts to address medical malpractice concerns should begin with a patient-centered focus on reducing errors and promoting fair compensation.

Pre-dispute mandatory arbitration should be prohibited. If such contracts exist, they should be unenforceable.

Statutes of limitation should be no shorter than two years and should not begin until the injury is discovered or should reasonably have been discovered.

All health care providers and hospitals should be required either to carry adequate levels of medical malpractice insurance or to demonstrate an ability to pay potential malpractice claims. If malpractice exclusions or waivers are established for providers, states should not single out Medicaid beneficiaries or recipients of uncompensated care for reduced protection.

States should require that malpractice insurance premium increases are approved by state regulators, and that proposed rates are justified by claims-loss ratios. States should also require that insurance companies report filed claims to the state insurance commissioner on an annual basis (see also Long-Term Services and Supports—Quality and Consumer Rights Across All Licensed Residential Care Settings and Private Enforcement of Legal Rights).

States should initiate demonstration projects to explore and evaluate promising methods of patient compensation, such as mediation and “accelerated-compensation events” systems. States should be careful to avoid restricting patient access to fair and just compensation. Insurance mechanisms that make liability insurance coverage available should be supported. Insurance regulators should identify and collect additional, mutually beneficial data necessary to further the understanding of conditions in current and future medical malpractice markets. Malpractice reform proposals that do not reduce errors, or that would impair the right of injured patients to full and just compensation for injuries resulting from inappropriate medical care, should not be instituted.

The recommendations of the National Academy of Medicine—formerly the Institute of Medicine or IOM—for exploring alternatives to the tort system should be implemented. Of particular importance are:

  • reforms that would promote access to the courts for all legitimate claims, including smaller malpractice claims, and accelerate the resolution of cases;
  • the further exploration of alternative dispute resolution systems for medical malpractice cases that could serve injured patients better than the current system does, such as “sorry works” approaches;
  • malpractice insurance rates that fairly and accurately reflect claims experience; and
  • the development and evaluation of demonstration projects for other promising systems of compensation for preventable medical injuries, such as the comprehensive, patient-centered, safety-focused, and non-judicial injury compensation system proposed by IOM. Such projects should be conducted under government auspices, with strong oversight, adequate funding and staffing, and rigorous evaluation, and should apply schedules of damages that do not result in disproportionately low or otherwise unfair awards to older, nonworking patients.