U.S. Department of Justice
Office of Justice Programs
Bureau of Justice Statistics
Special Report
Medical Malpractice Insurance Claims in Seven States, 2000-2004
March 2007, NCJ 216339
-------------------------------------------------------
This file is text only without graphics and many of the
tables. A Zip archive of the tables in this report in
spreadsheet format (.csv) and the full report including
tables and graphics in .pdf format are available from:
http://www.ojp.usdoj.gov/bjs/abstract/mmicss04.htm
-------------------------------------------------------
By Thomas H. Cohen, Ph.D.
Kristen A. Hughes, MPA
Bureau of Justice Statistics
Insurance companies in Florida, Illinois, Maine, Massachusetts,
Missouri, Nevada, and Texas reported information on about
43,000 closed medical malpractice insurance claims between
2000 and 2004. In these states licensed medical malpractice
insurance providers are required by law to submit data on
closed claims to a central state agency, typically the
Department of Financial and Insurance Regulation. The
collection agency in these states provided the data to the
Bureau of Justice Statistics (BJS).
Most medical malpractice claims were closed without any
compensation provided to those claiming a medical injury
(claimant). About a third of closed medical malpractice
insurance claims in Maine, Missouri, and Nevada resulted in
an insurance payout. In Illinois 12% of closed claims had a
payout.
For closed medical malpractice insurance claims that resulted
in compensation for the claimant, fewer than 10% of the claims
in Florida, Maine, Missouri, and Nevada had a payout of $1
million or more. In Florida, Maine, and Missouri about
two-thirds of the claims were closed with an insurance payout
of less than $250,000.
Among persons receiving compensation, insurance payouts were
highest for claimants who suffered lifelong major or grave
permanent injuries and lowest for claimants who suffered
temporary or emotional injuries. In Florida and Missouri
claimants with major or grave permanent injuries received
median payouts ranging from $278,000 to $350,000. By
comparison, claimants in these states who suffered various
types of temporary or emotional injuries received median
payouts ranging from $5,000 to $79,000.
Medical malpractice insurance payouts increased as the insurance
claims advanced through the legal system. Payouts were typically
lowest for claims closed prior to the filing of a lawsuit and
highest for claims closed after a trial. In Florida, Nevada,
and Texas claims decided by trial resulted in median payouts
that were at least 21/2 times larger than claims that were
settled. Medical malpractice claims that closed after trial
also cost more for insurance firms to defend than claims
settled prior to trial.
In general, claimants did not file medical malpractice claims
with insurance companies immediately after injury. In Florida,
Missouri, and Texas medical malpractice claims were filed
with insurance companies an average of 15 to 18 months after
an injury. After claims were received, it took an average of
26 to 29 additional months to close the claim.
Insurance companies reported that physicians, surgeons, and
hospitals were the most common type of medical provider named
in medical malpractice insurance claims. These claims
indicated that alleged injuries occurred more frequently in
hospital inpatient facilities than in hospital outpatient
facilities, doctors' offices, or emergency rooms.
Seven states provided medical malpractice data to BJS
Medical malpractice has been a major issue in the Nation's
debate over health care costs and tort reform. Seven
states -- Florida, Maine, Missouri, Texas, Illinois,
Massachusetts, and Nevada –- were identified by the National
Association of Insurance Commissioners (NAIC) as having
comprehensive medical malpractice insurance claims databases.
*** Footnote 1: NAIC is a clearinghouse for insurance regulators
in all 50 states and the U.S. territories. Further information
about NAIC may be obtained at .*** The
information collected by these states covered a range of key
items, including the number of claims closed with or without
payouts, types of medical providers named in claims, facilities
where alleged injury occurred, severity of alleged injury, court
disposition of claims, amounts paid to compensate claimants,
costs of defense counsel, and claim processing time.
The number of medical malpractice claims closed between 2000
and 2004 differed considerably across the seven states.
Differences in state population, number of health care providers,
overall litigation environment, and scope of data collected may
contribute to a higher number of closed claims in some states
compared to other states. (See Methodology.)
Florida, Maine, Missouri, and Texas collected medical malpractice
claims data involving physicians, surgeons, hospitals, nursing
homes, dentists, and other health care providers. In
comparison, Illinois, Massachusetts, and Nevada collected
data involving only physicians or surgeons. Also Florida and
Massachusetts did not collect data on claims closed without an
insurance payout. In Texas detailed medical malpractice
insurance claims data were collected only for closed claims that
had an insurance payout of more than $10,000. For these reasons,
data in this report should not be used to compare medical
malpractice insurance litigation across states.
Prior BJS reports on medical malpractice focused on only those
medical malpractice claims that ended in trial. (See box on
page 3.) This report describes a broader scope of medical
malpractice litigation by examining medical malpractice
insurance claims that were settled prior to or after a
lawsuit in addition to those ending in trial.
Few medical malpractice claims were closed
with a payout
Most medical malpractice insurance claims were closed without
a payout to the person seeking compensation for the alleged
medical injury. In Maine (34%), Missouri (31%), and Nevada
(38%), about a third of medical malpractice claims were
closed with a payout. In Illinois about 12% of closed claims
resulted in a payout.
----------------------------------------------
What is a medical malpractice insurance claim?
A medical malpractice insurance claim arises when a person
(the claimant) alleges that negligent medical treatment
resulted in an injury. The treatment may have been provided
by a physician, surgeon, or other health care professional
or an organization, such as a hospital, clinic, or nursing
home.
In a typical medical malpractice claim, the person claiming
an injury or a related family member retains an attorney to
file a claim with the medical provider's insurance carrier
requesting compensation for the injury. After a claim is filed,
the insurance carrier may settle, negotiate with the claimant
over the amount of compensation, or refuse to compensate the
claimant. If the parties do not come to an agreement, the
claimant's attorney may file a lawsuit in the appropriate
court or abandon the claim.
Some states require review of medical malpractice claims
before a panel of experts prior to a lawsuit, while other
states mandate arbitration or alternative dispute resolution
as a means of resolving medical malpractice claims. The
filing of a lawsuit may produce several outcomes. These
include the settlement of the case prior to or during trial,
a trial decision in favor of the claimant or the defendant,
or the dismissal of the case by the court. Claims may also
be abandoned or withdrawn after a lawsuit.
----------------------------------------------
Majority of medical malpractice claims were brought against
physicians or surgeons
Physicians or surgeons were the most common type of individual
medical provider involved in medical malpractice insurance
claims. They made up about half of medical providers involved
in medical malpractice claims closed in Maine(54%)and Missouri
(48%), and two-thirds of those in Texas (68%).
Hospitals were the most frequent institutional party named in
medical malpractice insurance claims. In Maine 27% of claims
were against hospitals, while in Missouri and Texas hospitals
accounted for about 18% of health care providers in closed
claims. The number of institutional providers, such as
hospitals, may be underestimated because these institutions
often self-insure and self-insured institutions are not
required to report closed claims.
Most injuries occurred at hospital inpatient facilities
Most medical malpractice injuries reported in closed insurance
claims occurred in hospital inpatient facilities. About half
of closed claims in Florida and Missouri and 42% of claims
closed in Illinois involved injuries that occurred in hospital
inpatient facilities. Physicians' offices accounted for 10% of
the claims closed in Florida, 20% in Missouri, and 24% in
Illinois.
-----------------------------------------------
Prior BJS medical malpractice data collections
Prior BJS reports on medical malpractice estimated that
about 7% of medical malpractice lawsuits ended in a trial.
(See Tort Cases in Large Counties, 1992.) BJS has also
provided detailed information about medical malpractice
trials in several reports examining civil trial litigation
in the Nation's 75 most populous counties. (See Civil
Trial Cases and Verdicts in Large Counties, 2001; Medical
Malpractice Trials and Verdicts in Large Counties, 2001;
and Tort Trials and Verdicts in Large Counties, 2001.
These reports are available
at .)
These reports highlight three key findings:
* Plaintiffs won in about a quarter of medical malpractice
trials.
* The estimated median trial award was about $425,000.
* Between 1992 and 2001 the number of medical malpractice
jury trials remained fairly stable but median trial awards
increased by about 70%.
-----------------------------------------------
Females made up over half of insurance claimants
For states that provided data on gender, females comprised
between 54% and 56% of medical malpractice claimants.
Few medical malpractice claims resulted in payouts of
$1 million or more
Insurance payouts typically compensate claimants for lost wages
and medical bills (economic damages); pain, suffering and other
emotional damages (noneconomic damages); and attorney fees and
costs. In cases where the medical provider engaged in reckless
or criminal behavior, punitive damages may be awarded to the
claimant.
Overall, medical malpractice insurance claims with payouts of
$1 million or more occurred infrequently. Fewer than 10% of
compensated medical malpractice claims resulted in payouts of
$1 million or more in Florida, Maine, Missouri, and Nevada.
Insurance payouts of $1 million or more accounted for 17% of
paid claims in Illinois and Massachusetts, and 11% of paid
claims in Texas.
----------------------------------------------------
In Missouri fewer claims involved temporary injuries;
larger portions of claims involved wrongful death
In Missouri the percentage of claimants alleging more
serious injuries has increased. In 1990 about half of
closed medical malpractice claims involved temporary
injuries, while wrongful deaths accounted for 20% of
closed claims. By 2004 temporary and wrongful death
injuries each accounted for about a third of closed
medical malpractice claims.
The percentage of claims involving permanent injuries
remained relatively stable between 1990 and 2004. On
average about a third of closed medical malpractice claims
involved permanent injuries. Increased expenses in
litigating medical malpractice claims and changes in the
strategies of plaintiff's lawyers in deciding which claims
to litigate may explain this convergence of claims involving
temporary and wrongful death injuries.
----------------------------------------------------
In states where data were collected on all health care
providers, the majority of compensated medical malpractice
insurance claims resulted in payouts of less than $250,000.
In Missouri 72% of medical malpractice claims were closed
with payouts of less than $250,000, while in Florida and
Maine about two-thirds of the claims had payouts of less than
$250,000. Sixty-one percent of closed claims in Texas also
had payouts of less than $250,000.
In Illinois, Massachusetts, and Nevada, where data were
available on physicians or surgeons only, approximately 40%
to 50% of claims resulted in payouts of less than $250,000.
-----------------------------------------------------
In Nevada diminished life expectancy and disfiguring
injuries were more likely to result in a payout than
non-physical emotional injuries
States differ in the way that they collect information on
the type of physical injury reported in a medical
malpractice claim. Nevada, Maine, Massachusetts, and Texas
use their own coding schemes and detailed text fields to
describe the type of injury alleged by the claimant.
Florida, Missouri, and Illinois use the National
Association of Insurance Commissioners' (NAIC's) injury
scale to describe injuries alleged in medical malpractice
claims. (See scale on page 6.)
In Nevada death is the most common type of medical
malpractice injury reported in closed claims. This is
followed by injuries resulting in "prolonged care or
recovery" and "nervous system damage."
In Nevada over a third of all medical malpractice claims
closed between 2000 and 2004 resulted in a payout.
"Diminished life expectancy" and "disfigurement" injuries
were more likely to result in a payout compared to those
claims in which the claimant died. "Non-physical injuries"
and "pain" resulted in a payout for claimants about 15% of
the time.
-----------------------------------------------------
-----------------------------------------------------
Medical malpractice insurance payouts were higher for
major or grace permanent injuries than for temporary
emotional injuries
States using the National Association of Insurance
Commissioners' (NAIC's) injury scale rank medical malpractice
injuries according to escalating levels of severity. The
NAIC's injury scale codes injuries with values that range
from one for emotional injury only to nine indicating that
the claimant died. (See adjacent description for scale and
type of injuries.)
Excluding wrongful death, the major and grave permanent
categories include the most serious types of injuries that
may occur in medical malpractice insurance claims. Claimants
who suffer these types of injuries often have sizeable medical
bills, require potentially lifelong medical care, or incur
substantial losses in earned income. The median insurance
payouts for claimants who had major or grave permanent
injuries ranged from $278,000 to $350,000 in Florida and
Missouri and approached nearly $1 million in Illinois. By
comparison, the median insurance payouts for claimants who
suffered emotional, insignificant, or minor temporary injuries
ranged from $5,000 in Missouri to $64,000 in Illinois.
The median insurance payouts in medical malpractice cases with
wrongful death claims were lower than in cases in which the
claimant suffered major or grave injuries. Since wrongful
death claims would not involve more costly long term medical
care, they often result in less compensation than claims in
which long term medical care is needed.
National Association of Insurance Commissioners' (NAIC's)
severity of injury scale and type of injuries:
* Death (09) — resulted in death of claimant.
* Permanent injury
-grave (08) — quadraplegia, severe brain damage, lifelong
care or fatal prognosis.
-major (07) — paraplegia, blindness, loss of two limbs,
brain damage.
-significant (06) — deafness, loss of limb, loss of eye,
loss of one kidney or lung.
-minor (05) — loss of fingers, loss or damage to organs.
Includes non-disabling injuries.
* Temporary injury
-major (04) — burns, surgical material left, drug side
effects, brain damage. Recovery delayed.
-minor (03) — infections, misset fractures, fall in hospital.
Recovery delayed.
-insignificant/slight (02) — lacerations, contusions, minor
scars, and rash. No delay in recovery.
* Emotional injury only (01) — fright, no physical damage.
-----------------------------------------------------
About 95% of medical malpractice insurance claims settled
prior to trial
Most medical malpractice insurance claims that resulted in a
payout were settled prior to being decided by a jury or bench
(judge) trial. In Florida, Maine, Missouri, and Texas 5% or
less of these claims reached a trial decision.
For claims that were settled prior to a trial decision, the
settlement was reached in most cases after a lawsuit had been
filed in court. Of the nearly 8,300 claims settled in Florida,
about 6,300 were concluded after a lawsuit was filed, but prior
to a trial decision.
Insurance payouts increased as claims moved through
the legal system
Insurance payouts for medical malpractice insurance claims
decided by trial were substantially larger than claims that
were settled. In Florida, Texas, and Nevada the median
insurance payouts were at least 2« times larger for claims
that reached a trial decision compared to claims that were
settled. In Maine and Missouri median payouts were at least 3
times larger for claims decided by trial than claims that were
settled. By comparison, in Florida, Missouri, and Texas median
settlement payouts were lowest for medical malpractice claims
settled prior to the filing of a lawsuit.
In Texas median payouts for claims resolved through
alternative dispute resolution (ADR) were nearly the
same as non-ADR claims
Nearly a third of the medical malpractice claims closed in
Texas between 2000 and 2004 were resolved through alternative
dispute resolution (ADR). This procedure refers to settling
disputes by means other than formal litigation. The litigants
typically meet with a third party who assists in resolving
the dispute. Although Texas does not require that medical
malpractice claims be referred to ADR, many parties
participated in various ADR programs.
The decision to seek resolution through an ADR program did not
impact overall payout amounts. Medical malpractice claims settled
through ADR prior to a lawsuit produced slightly lower payouts
($50,000) compared to claims that were not resolved through ADR
($55,000). Among medical malpractice claims that settled after
a lawsuit was filed in trial court, the median insurance payouts
were slightly higher for ADR ($210,000) as opposed to non-ADR
($200,000)resolved claims.
Medical malpractice insurance payouts have increased
The median damages paid to medical malpractice claimants have
increased since the early to late 1990s. In Missouri, for
example, the median insurance payouts grew from $33,000 in 1990
to $150,000 in 2004, an increase of more than 350%. During the
various time periods, median payouts also increased by 57% in
Massachusetts, 49% in Illinois, 36% in Florida, 26% in Nevada,
and 27% in Texas. Growing health care costs and an increasing
effort by many attorneys to litigate only those medical
malpractice claims involving severe injuries or wrongful death
claims may explain some of these increases.
Medical malpractice claims closed after trial cost more to
defend than claims settled prior to trial
The median loss adjustments paid to defense counsel were higher
for claims closed through trials than settlements. Loss
adjustments cover the amount insurance companies pay their legal
counsel for investigating, settling, and trying their insurance
claims. In Florida, Maine, and Nevada, median loss adjustments
were at least 4 times greater for medical malpractice claims
closed after trial than they were for claims settled prior to
trial. The expenses associated with litigating a claim to the
completion of a trial -- including completed discovery,
preparation of key witnesses, expert testimony, and jury
selection -- all contribute to higher defense counsel
costs for claims decided by trial.
On average, 15 to 24 months elapsed before a medical
injury was reported to insurance carriers
Medical malpractice insurance claims were typically not
reported to insurance carriers immediately after injury.
In Florida an average of 15 months passed before claimants
reported the injury to insurance providers. In Nevada an
average of 24 months passed before medical injuries were
reported.
In Florida, Texas, and Missouri, an average of nearly 4 years
passed from initial injury to the closure of the claim. Once
the insurance company received a claim in these three states,
an average of 26 to 29 additional months passed before claims
were closed and the claimant compensated.
For Nevada and Illinois medical malpractice claims took
slightly more than 5 years to close after injury. In these
states an average of 22 to 24 months passed before claims
were reported to the insurance carrier. An additional 38
to 45 months passed before the claims were closed.
Several factors influence the decision concerning when to
file a medical malpractice claim, including statute of
limitations restrictions and the need to ascertain various
medical, work-related, and pain and suffering expenses.
Methodology
Prior BJS reports on medical malpractice estimated that about
7% of medical malpractice lawsuits ended in a trial. (See Tort
Cases in Large Counties, 1992.) BJS has provided detailed
information about medical malpractice trials in several
reports examining civil trial litigation in the Nation's 75
most populous counties. (See Civil Trial Cases and Verdicts
in Large Counties, 2001; Medical Malpractice Trials and
Verdicts in the Large Counties, 2001.)
These BJS reports did not examine the characteristics or outcomes
of the estimated 93% of medical malpractice claims that settled
or were closed without compensation prior to reaching the trial
stage. This BJS special report expands the scope of inquiry about
medical malpractice litigation by providing information on medical
malpractice claims that settled prior to or during litigation,
were dismissed or abandoned without compensation, or reached the
trial stage.
Medical malpractice claim data limitations
Limitations apply to the medical malpractice claim databases
summarized in this report. One limitation is the extent to
which these medical malpractice databases contain claims in
which no compensation was demanded by the claimant. While most
medical malpractice insurance claims involve requests for
compensation, it is possible that significant numbers of medical
malpractice insurance claims do not involve any compensation
demands.***Footnote 2: Bernard Black, Charles Silver, David
Hyman, and William Sage. July 2005. "Stability Not Crises:
Medical Malpractice Claim Outcomes in Texas, 1988 2002."
Journal of Empirical Legal Studies. 2(2): 207 259.***
Some insurance companies will open claims in response to
medical procedures that resulted in injuries, irrespective
of whether the injured party decides to pursue a claim. It
was not possible to identify medical malpractice claims that
did not involve demands for compensation.
The underreporting of medical malpractice insurance claims
represents another limitation. The Departments of Financial
and Insurance Regulation of the states providing data typically
require that only licensed insurance companies submit closed
claim medical malpractice data. The medical liability insurance
market consists of other non-licensed entities and groups that
provide medical liability insurance. These groups are not
required to report closed claims medical malpractice data and
include "self insured hospitals, hospitals that insure their
employee physicians and surgeons, captive insurers, risk
retention groups and surplus lines insurers."***Footnote 3:
Department of Financial and Professional Regulation Division
of Insurance. 2006. 2005 Medical Malpractice Claims Report.
Springfield, IL: p. 3.*** The percentage of unreported medical
malpractice insurance claims was generally not discernible;
however, the Missouri Department of Insurance estimated that
15% to 20% of claims go unreported every year for that
state.***Footnote 4: Missouri Department of Insurance. 2005.
Missouri Medical Malpractice Insurance Report. Jefferson City,
MO.***
Another limitation is that this study involves an examination
of closed rather than opened medical malpractice insurance
claims. As previously shown, a substantial amount of time can
pass from the date of injury to the date that the medical
malpractice claim is reported and subsequently closed by the
insurance carrier. As a result of these time lags, this report
should be viewed as presenting a picture of the past as opposed
to the present medical malpractice insurance litigation
environment.***Footnote 5: Neil Vidmar, Paul Lee, Kara MacKillop,
Kieran McCarthy, and Gerald McGwin. 2004 -- 2005. "Uncovering
the Invisible Profile of Medical Malpractice Litigation:
Insights from Florida." DePaul Law Review 54: 315 -- 356.***
Another limitation is unknown variation in data quality. Some
of these datasets have never been audited for consistency and
accuracy. Medical malpractice claims often involve several
defendants and insurance carriers filing multiple claims
stemming from the same injury. While some states attempt to
identify multiple claims that hail from the same incident, other
states do not have procedures for identifying and purging these
duplicate claims. This analysis was unable to determine the
extent that duplicate claims were represented in these datasets.
The seven states also do not collect or report medical
malpractice claim data in a uniform or consistent manner.
Some states have more extensive medical malpractice data
collection programs. Florida, Maine, Missouri, and Texas
collect medical malpractice claims data involving physicians,
surgeons, hospitals, nursing homes, dentists, and other health
care providers. Illinois, Massachusetts, and Nevada only
collect medical malpractice claim data involving physicians
and surgeons.
Another important issue is whether the states collect data
for claims that did not result in any compensation being
awarded to the claimants. Florida and Massachusetts do not
collect data on claims closed without an insurance payout.
Texas collects only aggregate statistics on claims closed
without an insurance payout or claims closed with insurance
payouts of $10,000 or less. Detailed medical malpractice
data in Texas are collected only for those medical malpractice
cases closed with insurance payouts of more than $10,000.
For these reasons, this report should not be used to compare
medical malpractice insurance litigation across the seven
states. Rather, this report can be used to examine the general
profile of medical malpractice insurance litigation.
Definitions of terms
Claim characteristics
Insurance payouts: Insurance claim closed with claimant being
compensated for losses sustained from malpractice injury.
Losses can include economic (lost wages and medical expenses),
noneconomic (emotional or pain and suffering), and attorney
fees and costs.
Claimant: Party filing medical malpractice claim with insurance
carrier seeking compensation for alleged injury committed by
the negligent acts or omissions of physician, surgeon, or other
health care provider.
Defendant: Physician, surgeon, or other health care provider
named by claimant in medical malpractice insurance claim as
responsible for the claimant's injury.
Insurance carrier: Company that provides malpractice coverage
to physician, surgeon, or other health care provider.
Loss adjustment: The amount insurance companies pay to their
legal counsel for investigating and settling insurance claims,
including defending a lawsuit in court. In some states loss
adjustments have a broader definition and include other
administrative costs for processing insurance claim.
State Insurance Commissioner: State insurance regulator
responsible for managing the insurance industry and market
for a particular state.
Claim disposition
Settled prior to lawsuit filed: Refers to insurance claims that
are settled by the parties for specified dollar amounts prior
to the claim being filed as a lawsuit in state or federal trial
court.
Settled after lawsuit filed: Refers to insurance claims that are
settled by the parties for specified dollar amounts after the
claim is filed as a lawsuit in state or federal trial court but
before the claim reaches a trial decision.
Trial verdict or judgment: Refers to insurance claims that are
closed after a jury or judge(bench)trial has reached a verdict
or judgment.
Claim processing time
Injury to reporting date: Time period between date health care
provider's malpractice act/omission caused injury to the
claimant and date claimant files claim with the insurance
carrier seeking compensation.
Reporting to closing date: Time period between date health care
provider's insurance carrier received medical malpractice claim
to the date the health care provider's insurance carrier closed
the claim. The closing date can refer to the date the insurance
carrier paid out on the policy, the date the claimant abandoned
the claim, or the date of administrative closure.
-----------------------------------------------
The Bureau of Justice Statistics is the statistical
agency of the U.S. Department of Justice. Jeffrey L.
Sedgwick is director. This Special Report was written
by Thomas H. Cohen and Kristen A. Hughes, under the
supervision of Steven K. Smith. Lynn Langton provided
statistical assistance and review. Special thanks to
the Departments of Financial and Insurance Regulation
in Florida, Illinois, Maine, Massachusetts, Missouri,
Nevada, and Texas for providing the medical malpractice
insurance claims data. Some of these agencies also
provided data assistance and comment. Carolyn C. Williams
produced and edited the report and Jayne Robinson prepared
the report for final printing, under the supervision of
Doris J. James.
March 2007, NCJ 216339
----------------------------------------------
----------------------------------------------
This report in portable document format and in ASCII
and its related statistical data and tables are
available at the BJS World Wide Web Internet site:
.
----------------------------------------------
End of file
03/20/07 ih