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Some observations about medical malpractice payouts

When an individual is harmed as a result of the negligence of a physician or other healthcare provider, they deserve to be compensated. But compensation for medical errors is a complicated thing. A recent Forbes article posted the results of a study of annual medical malpractice payouts on a state-by-state basis. The information, compiled by a company called Diederich Healthcare, does not include medical malpractice payouts to practitioners---this excludes hospitals—nor does it include payouts made after a purely verbal request for payment or payouts during mediations.

The article makes a number of observations about the state-by-state numbers, but two facts stand out in a particular way. First is that most payouts for medical malpractice occur outside the context of litigation. This is important to consider, because patients who are harmed by a negligent doctor are usually not primarily interested in going to court but in being adequately compensated for their pain, suffering, medical costs and other losses. Knowing that payment is more likely to happen as a result of settlement in many cases can certainly affect a patient’s negotiation strategy. 

Another important observation, and one which is related to the last one, is that in cases where physicians go to court over medical malpractice allegations, they usually win. This is the flipside of the last observation. In other words, when a doctor decides to challenge medical malpractice allegations, he or she is more likely to avoid liability. This, of course, could very well be due to the fact that doctors tend to fight medical malpractice cases with weak merits.

Another well-known fact that is not mentioned by the article is that it can be difficult for injured patients to obtain representation for medical malpractice unless they payout is likely to be large. This is an unfortunate consequence of the costs of litigation, and something that many injured patients looking into suing a negligent healthcare provider come to discover.

Source: Forbes, “The Puzzle of Medical Malpractice Payouts,” Michael Krauss, March 27, 2014. 

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