Medical Malpractice Lawsuits and Health Care Spending

Economists estimate that spending on medical malpractice– including administrative costs as well as paying jury awards and confidential settlements– adds up to less than one-half of a percentage point of medical spending. A recent New York Times column explored whether this can really be the reason that American health care is so expensive. Economists who have no vested interest in the malpractice reform debate say that the costs of medical malpractice lawsuits ‘are such a minuscule part of health spending that they barely merit discussion.’ Another result of the economists’ research is the finding that ‘only 2 to 3 percent of cases of medical negligence lead to a malpractice claim.’ The medical malpractice system very well may need reform, but focusing on medical malpractice reform as a way to reduce the cost of heath care is simply irrational.