Tort litigation brought for medical malpractice cost Americans $85 per person last year and the economy as a whole nearly $25 billion, according to a study released today by consultants Tillinghast-Towers Perrin.
Since 1975, "the increase in medical malpractice costs continues to outpace increases in overall U.S. tort costs, rising an average of 11.9% per year versus an increase of 9.3% per year in all other tort costs," says Russ Sutter, the primary author of the report.
Sutter is a principal with the New York City firm, which has tracked tort costs since 1950.
The report identified $233 billion in U.S. tort costs for 2002, up $27.4 billion from 2001. The largest single component in that rise was what the report called "a significant reassessment of liabilities tied to asbestos claims. At $11 billion, these costs were double the 2001 level and more than one-third of the total cost increase."
But medical malpractice costs rose to $24.6 billion last year, up 9.8% from $22.4 billion in 2001 and that was 9.3% higher than the $20.5 billion tracked in 2000.
Medical malpractice cost estimates in the study were extrapolated from the actual experience of Tillinghast clients plus insurance company filings, Sutter says.
Costs counted in the study include judgments, defense costs, appeals and out-of-court settlements, Sutter says, but they don't tell the whole story.
Not counted are any out-of-pocket expenses or lost-time costs of the plaintiff. Also not counted are lost-time expenses of defendants, or any psychological, social and productivity costs attributed to the impact such suits have on physicians--for example, the loss of physician services in a community when a sued physician retires early or leaves for an area with lower malpractice insurance costs.
Looking long term, tort costs for medical malpractice have "gone up far more than inflation in just about every decade except the 1990s," when costs flattened a bit, Sutter says.