2018 Malpractice Payments

The National Practitioner Data Bank (“NPDB”) was established by Congress in 1986 to be a repository of information about malpractice payments and matters affecting the privileges and licensing of physicians and other health care professionals.  All malpractice payments made on behalf of a health care provider must be reported to the NPDB.  Hospitals, medical boards, insurers and certain others can query the NPDB about health care professionals who are applying for privileges, licenses or insurance.  The public may not review the information kept by the NPDB, except in the most general terms.

What is the NPDB?

LeverageRx is a digital lending and insurance broker for medical professionals.  Every year it analyzes the reports that have been made to the NPDB and produces a report of its own.  Here is a link to its report for payments made in 2018.  The data are quite interesting.

There are a few caveats, however, to the data.  The first is that, as noted, it is based upon reports to the NPDB.  Not all malpractice settlements or judgments are required to be reported to the NPDB.  For example, if a nurse at a hospital makes a mistake that causes an injury and the hospital settles the claim, that settlement need not be reported to the NPDB.  This creates a significant limitation on the ability of the NPDB reports to accurately capture all of the malpractice payments being made in a given year.  Especially in cases involving the most serious injuries, a hospital often plays a role and, given its larger financial ability and insurance, may be making the largest payment of all of the defendants.  It is impossible to determine how many more payments were made that were not reported but the total amount of those payments is likely to be a very large figure.

Another limitation to keep in mind is the effect of insurance limits.  Probably the most common amount of coverage for an individual physician is $1 million.  Certainly, this is the case in Arizona.  Occasionally, if the doctor is a member of a group, there may be a second million but very often $1 million is it.  Since it is almost unheard of for a doctor to make a payment out of his or her personal funds to settle a case, the malpractice policy limit is the maximum that an injured patient will recover, regardless of the magnitude of the injury or the clarity of the malpractice.

Lastly, some states have caps on malpractice recoveries while some do not.  The data does not distinguish between those states with caps and those without.  The caps most often take the form of limiting the amount of non-economic damages (read pain and suffering) a patient can recover.  There is substantial controversy over the fairness of caps (since it is the most seriously injured patients who have their recoveries capped) and the effect of the caps in keeping down costs and payments.

Without further ado, here is the information on reported payments in 2018 with some comparisons going back to 2004.

The total number of payments has been declining since 2004.  There were over 16,000 payments in 2004 and only 11,584 last year.  After gradually declining for a number of years, the total dollars paid out has been gradually rising since 2012.  Last year it was just a little over $4 billion.  In 2004, it had been about $4.6 billion.  The gradual rise in payments is at least in part due to inflation in general and in the cost of medical care in particular.

Total payments in Arizona were on a par with its population.  Last year there were 225 payments totaling almost $84 million.  The average payment in Arizona was $372,397.  This was only slightly over the national average payment of $348,065.

Across the nation, 96.5% of all payments were made by way of settlement.  Only 3.5% were the result of a case that went to trial and resulted in a verdict in favor of the patient.  The data does not tell us how many cases went to trial or how many of those that did resulted in a verdict for the doctor but national statistics are that doctors win about 75% of the cases that go to trial.

The data confirm my experience that the most seriously injured patients are the ones getting paid.  29.7% of the cases arose out of a patient death.  Of those which involved living patients, just over 81% involved a permanent injury.  Of those permanent injuries, only a few were minor in nature.  Most of the permanent injuries which resulted in payments were brain injuries, quadriplegia or other injuries requiring life-long care, or other major or significant permanent injuries.  Not surprisingly, the injuries requiring life-long care were the ones with the highest average payment: $961,185.  The average payment for a death was $386,317.  The smallest payments went to the patients with injuries which were not permanent.

The data show what any experienced medical malpractice attorney will tell you:  These are difficult, expensive cases in which only the most seriously injured are likely to receive significant payments.  Even then, the payments are far less than what one would expect for the serious nature of the injuries involved.  The low numbers reflect the strong bargaining power of doctors in these cases who know they are likely to win if the patient does not take what is offered in settlement.



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