Two Percent of Physicians Responsible for Half of Malpractice Payouts
If 2% of Physicians Are Responsible for Half of Malpractice Payouts, How Should We Intervene with These Outliers?
Last month, the Journal of Patient Safety published “The Detection, Analysis and Significance of Physician Clustering in Medical Malpractice Lawsuit Payouts,” an analysis of data from the National Practitioner Data Bank (NPDB) that indicates only 1.8 percent of American physicians have been responsible for at least half of the more than $83 billion in medical malpractice payments between 1990 and 2015. This assessment is in keeping with another study of NPDB data published earlier this year by The New England Journal of Medicine that found just 1 percent of doctors were associated with 32 percent of all malpractice settlements paid between 2005 and 2014. The NPDB is a federally mandated repository for information regarding medical professional liability payments.
“The Detection, Analysis and Significance of Physician Clustering in Medical Malpractice Lawsuit Payouts” study analyzed total claims payouts rather than number of claims because the authors theorized that “total claim payouts are a better predictor of future malpractice claims than the total number of claims paid because this metric would be expected to have a positive relationship to both the severity of the event and the number of claims paid.”
The good news is that the number of U.S. physicians grossly underperforming their peers has been on the decline. A very similar study of NPDB data 15 years ago by the nonprofit consumer advocacy group Public Citizen found that 5 percent of physicians were responsible for half of all malpractice awards. What this tells us is that the combination of medical liability tort reforms and risk management investment has been fruitful. It also indicates that the less than 2 percent of physicians responsible for half of medical malpractice payouts in the Journal of Patient Safety study are true outliers, driving up insurance costs for the other 98 percent of physicians.
The authors of “The Detection, Analysis and Significance of Physician Clustering in Medical Malpractice Lawsuit Payouts” emphasized the potential for their data approach to find and intervene with those physicians likely to have repeated episodes of complaints and claims. And because “those physicians in the group responsible for 50 percent of the dollars paid were more likely to have higher payments and to be repeaters than the entire group for the most commonly occurring numbers of payments, it suggests that the best way to identify physicians requiring intervention involves examining the total malpractice dollars paid by physicians.”
The ability to identify those physicians likely to have repeat, high-dollar payments would be of enormous benefit to hospital systems, medical professional liability insurers and the at-risk healthcare professionals themselves. If the outlier physicians’ malpractice payouts could be reduced or eliminated, it would make a significant difference in the nation’s total malpractice payouts, allow for greater actuarial accuracy when determining medical professional liability insurance premiums and offer the opportunity to intervene early with risk management courses for those physicians most likely to incur repeat, high-dollar claims in the future.
If hospital systems are able to determine which physicians carried the highest claim risk, they could segregate them out from their self-insurance vehicle in favor of other insurance options. Perhaps insurers of medical liability could take a page from Speaker of the House Paul Ryan suggestion for insuring Americans with a preexisting condition and create non-standard, high-risk pools for those physicians likely to have future high-dollar claims. Acceptance into these high-risk pools could mandate participation in deep patient safety and risk management training with the hope that these at-risk physicians could change course and ultimately re-enter the standard medical professional liability insurance market.
Many industries are already using big data and predictive analytics to forecast trends and alter employee behavior. Applying this approach to healthcare liability carries the potential to further reduce claims frequency and deflate the cost of medical professional liability insurance costs for the 98 percent of practicing physicians who are not likely to have recurring, high-dollar malpractice claims.