The Impact of Defense Expenses in Medical Malpractice Claims

Abstract

The objective of this study was to take a closer look at defense-related expenses for medical malpractice cases over time. We conducted a retrospective review of medical malpractice claims reported to the Physician Insurers Association of America's Data Sharing Project with a closing date between January 1, 1985 and December 31, 2008. On average a medical malpractice claim costs more than $27,000 to defend. Claims that go to trial are much more costly to defend than are those that are dropped, withdrawn, or dismissed. However, since the overwhelming majority of claims are dropped, withdrawn, or dismissed, the total amount spent to defend them surpasses that spent on claims that go to trial. Defense attorney expenses account for the majority of defense-related expenses (74%), while expert witness expenses and other expenses split the remaining 26%. A strong association was also found between the average indemnity payment and the amount it costs to defend individual claims by specialty. Our study found that defense-related expenses for medical malpractice claims are not an insignificant cost. As state and federal governments debate how to repair the malpractice system, addressing the high cost of defending claims should not be ignored.

Otolaryngology and medical malpractice: A review of the past decade, 2001–2011

“…In trial, even a favorable defense verdict may be a pyrrhic victory. Between the years 1985 and 2008, the average allocated loss adjustment expenses (ALAE), which measures expenses paid in the process of administering or adjudicating a claim, plaintiff verdicts cost $107,423 versus defendant verdicts at $81,590 . More troubling than the overall amount was the progressive upward trend in the average ALAE, which showed an approximately three‐fold increase between the years 1985 and 2008 …”

The Receding Tide of Medical Malpractice Litigation: Part 1—National Trends

“…; Carroll et al. ). Data on plaintiff‐side costs are not available, but if plaintiff‐side costs also rose, that could help explain the drop in small paid claims.…”

“…27 Black et al (2008). See also the multistate evidence in Carroll et al (2012). 28 See, e.g., Hyman et al (2013); Shepherd (forthcoming).…”

“…The decline in smaller paid claims is consistent with these claims being squeezed out of the tort system by rising litigation costs. There is evidence that defense costs rose much faster than inflation over this period (Black et al 2008;Carroll et al 2012). Data on plaintiff-side costs are not available, but if plaintiff-side costs also rose, that could help explain the drop in small paid claims.…”

Mandatory presuit mediation: 5‐year results of a medical malpractice resolution program

“…Fewer than 8% of medical malpractice claims go to trial and result in a verdict . Of those cases, approximately 90% result in a verdict for the defendant…”