Medical liability payouts for surgeries vary widely by state

Steven Fleischman, MD, was not surprised to hear about a recent study finding that Connecticut was among the states with the highest medical liability payments related to surgeries.

For years, Connecticut doctors have experienced higher-than-average jury awards and settlements and struggled with a lack of tort reforms, said Dr. Fleischman, an obstetrician-gynecologist and council chair of the Connecticut State Medical Society.

“We live in a wealthy state, and I think when juries are presented with the cost-of-living increases and providing for housing and health care, it all goes into the equation” of awards, he said. “The numbers are staggering. In general, physician practices are very concerned about where things are headed, given we already pay some of the highest insurance premiums.”

Connecticut ranked second among states with the highest predicted medical liability payments involving physicians or residents in surgically related cases, according to a study in the October Journal of the American College of Surgeons. Payments in Illinois were predicted to be the highest in the country for such payments.

Researchers queried surgery-related medical liability payments in the National Practitioner Data Bank from 1990 to 2006. They examined payments made in and out of court, including jury awards and settlements. Adjusting for inflation, the average payment nationally was $262,727.

The study did not measure average payments in individual states. Instead, researchers analyzed the likelihood of high payments in each state.

They arrived at their predictions by conducting an analysis of the NPDB data and controlling for variables such as age, gender, liability allegation and patient outcome. When analyzing state trends, they found that Illinois payments were most likely to reach multimillions of dollars compared with similar cases in other states.

Connecticut doctors were the second-most likely to pay claims above $1 million compared with similar cases in other states. Wisconsin ranked third in having predicted payments of more than $1 million.

The states least likely to have $1 million or higher payments were Kansas, Michigan and Texas. Predicted payments in these states were considerably lower than nearly all other jurisdictions.

“The most interesting part of the study was the wide variability in medical malpractice payments across states,” said study co-author Ryan Orosco, MD, an otolaryngology resident in the Dept. of Surgery at the University of California, San Diego Health System.

Tort reforms make a difference

States with the lowest medical liability payments generally had stronger tort reforms, Dr. Orosco said. For example, Texas and Kansas have $250,000 caps on noneconomic damages. In October, the Kansas Supreme Court upheld the Kansas cap as constitutional.

In Illinois, the state Supreme Court declared unconstitutional the state’s cap of $500,000 in 2010. Connecticut has no damages cap and few other tort reforms, Dr. Fleischman said.

During the study period, the annual number of claims decreased by 154 per year. However, individual case payments increased by $3,200 a year.

Patient outcomes were the strongest predictor of payment size, the study said. Plaintiffs who experienced quadriplegia because of an alleged medical mishap generally received $806,000 more than patients with minor, temporary injuries. Cases involving death were $294,000 more than minor injury claims.

About 95% of payments were made by an insurance company, with the remainder paid by state funds. Most claims were settled out of court, with only 4% proceeding to a formal court judgment.

The study’s findings illustrate the fact that the court system is not working properly for physicians or patients involved in lawsuits, said study co-author Mark A. Talamini, MD, a professor and chair of the Dept. of Surgery at the University of California, San Diego, Health System.

“Such variability from state to state in terms of awards and settlements just says to me that the system is broken,” he said. “It’s not working for patients who have been harmed, and it’s not working for [doctors] for whom [having] a medical malpractice claim is a devastating personal and professional event.”