William Sage, MD, JD recently wrote an editorial in JAMA that malpractice claims are not currently causing disruption of the healthcare system, and the number of claims and average payout for claims is lower today than 10 years ago. Paid claims declined from 18.6 to 9.9 claims per thousand physician, and median payments declined from $218,400 to $195,000. However, statistics show that the number and frequency of medical errors has increased over the same period, with up to 400,000 negligent deaths a year from malpractice not including severely injured patients. The article goes on to discuss the need to compensate injured patients, the use of dispute resolution methods, the Medicare and Medicaid liens that impact settlement costs and the time delay in resolving claims. The article goes on to comment negatively on the significant contingency fee compensation that plaintiff attorneys receive when representing injured patients.
However, the article fails to address the high cost of proving both liability and causation in a malpractice case. On average, a malpractice claim costs between $50,000 and $100,000 for the medical records, the expert reviews, the expert reports, the expert depositions and expert trial appearance. No physician, hospital, defense attorney or insurance carrier will pay a claim unless the medical basis for an error is established. This requires medical specialty experts to look at records at hourly rates upwards of $500 per hour in order to just determine if there is a probable claim. Cases that undergo just a preliminary review and result in a negative review still cost between $2,000 to $5,000 – that money that is not recovered by the attorney or the client (depending on who pays). Cases that go forward then require significant funding for the medical expert testimony, which may include multiple medical specialty areas on liability, additional medical specialties on causation of harm that was avoidable, and life care and economic loss experts.
Injured patients are simply not able to pay for the costs of the experts. Plaintiff attorneys take on significant financial risk in taking on a malpractice case. Not all cases are winners and losses of expended funds occurs. The contingency fee arrangement is appropriate when the attorney has to fund a case in excess of $50,000 without any certainty of recovery. Meritorious cases can be lost for a lot of reasons that have nothing to do with the medicine.
Regardless of the method of resolution, the costs of proving a malpractice case remain substantial. One cannot rely on the physicians to come forward and prove the case for the plaintiff, and one cannot expect insurers to make a payout unless the medical basis for the and demonstration of damages is shown. Dispute resolution can avoid the additional and often excessive trial costs, the expert costs for proving the medical error cannot be significantly reduced. The contingency fee arrangement creates an appropriate risk – benefit proposition for an attorney to take on a plaintiff’s malpractice case. Without a contingency fee that provides for an appropriate attorney fee in proportion to the recovery for the negligently injured patient, no lawyer can take the financial risk of investigating and proving a malpractice claim regardless of whether litigation or a dispute resolution process is used.