Malpractice insurer discusses expenses associated with defending malpractice claims
In a letter to the New England Journal of Medicine, several doctors reviewing data from a national malpractice insurer attempted to quantify the cost of defending malpractice claims. Of course, data from 50 states is inherently misleading in any one state, since there are 50 entirely different systems for proving fault and collecting damages, and 50 different responses to insurers' calls for "tort reform." In many states, "reforms" have granted doctors and their insurers enormous special advantages, and, for example, damages are "capped" at levels ranging from $250,000.00 per injury to $1,000,000.00 per injury. In other states, where consumer advocates have balanced the impact of big-money contributors, "reforms" have been more balanced and precise.
Michigan has adopted most of the consumer-unfriendly "reforms" advocated by insurance interests. It has adopted "caps" on non-economic damages, requires a highly technical "Notice of Intent to Sue" six months before a complaint can be filed, and requires that expensive medical specialist consultants sign an "affidavit of merit" before a legal complaint can be filed. More damning in the long run, however, are the procedural and substantive interpretations that a special-interest majority on Michigan's Supreme Court have imposed on the malpractice system. As a result of the latter bias (which more than one Justice has expressly acknowledged when invited to speak before doctors and insurers), literally more than 9 of 10 malpractice cases that are decided by the Republican Supreme Court majority end in decisions favoring the health care provider or insurer: often on the basis of technicalities that never measure the relative merits of the claim.
As a result of the individual political circumstances inuring to Michigan's jurisprudence, few attorneys will undertake a malpractice claim and few clients with legitimate grievances get a meaningful day in court. On a national level, the letter to the NEJM suggested that insurers spend approximately $17,000.00, on average, to secure the dismissal of claims that ultimately result in no payment to the patient. In cases where the patient is ultimately compensated some amount, the insurer paid on average $45,070.00 in attorneys' fees, expert witness fees and other court costs. Given that most of these cases address catastrophically bad patient outcomes in a complicated medical setting--with complicated legal procedural rules imposed at the request of doctors' insurers---it doesn't seem surprising that the defense of claims is not cheap. The authors did not bother to point out, however, that in relationship to average income, malpractice insurance is a smaller expense than taxi cab drivers pay for liability coverage.
In our firm's experience, the average malpractice claim costs approximately $35,000.00 out-of-pocket, to prepare for trial, with the most complicated cases involving death or catastrophic disability frequently approaching $100,000.00 in out-of-pocket expenses.