Malpractice Costs Set New Record

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Total premiums reach $31 billion nationwide, according to new study by Patients for Fair Compensation

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“You can’t find a more ineffective system for compensating injured patients than what we have in the United States.” Richard L. Jackson, Chairman, Patients for Fair Compensation

Physicians, hospitals, dentists, therapists and a host of other healthcare providers paid a total of about $31 billion in medical malpractice premiums in 2011 -- a new record, according to a study released Tuesday by Patients for Fair Compensation.

The data, compiled by Bioscience Valuation of Germany, showed that all healthcare providers spent that amount last year to protect themselves from lawsuits. Economists claim that malpractice premiums are built into the escalating costs of healthcare for consumers.

In addition, the study found that 19,000 patients received compensation from medical malpractice occurrences in 2011. Of the $31 billion in premiums, about 20 percent or $6 billion went to patients. The remaining $25 billion went to attorneys’ fees and other legal costs, administrative costs and insurance company profits.

“You can’t find a more ineffective system for compensating injured patients than what we have in the United States,” said Richard L. Jackson, chairman of Patients for Fair Compensation. “We take in far too much money and get so few dollars to medically injured persons. The system is just not working for patients.”

A fact sheet outlining the new data and a detailed description of the methodology used by Bioscience Valuation can be viewed here:

Patients for Fair Compensation estimates that more than $650 billion is wasted each year on unnecessary medical procedures ranging from x-rays, biopsies, CT scan, MRIs and other tests that doctors order to keep from being sued. This is what is known as “defensive medicine.”

Patients for Fair Compensation formed in late 2011 to educate policymakers about defensive medicine and the high costs related to unnecessary tests and procedures that doctors order to keep from being sued.

Bioscience Valuation reviewed medical malpractice cost estimates in the United States and estimate paid claim value and indemnity payments. The company, based in Bavaria, Germany, specializes in healthcare financial and economic modeling.

For more information about Patients for Fair Compensation and the proposed Patients Compensation System policy solution go to


Total malpractice costs were taken from Towers Perrin’s 2009 Update on U.S. Tort Cost Trends. Trends in paid claim volume and total indemnity payments were estimated based on Physician Insurers Association of America’s Claim Trend Analysis 2011 Edition.

About Patients for Fair Compensation:
Patients for Fair Compensation is a 501(c) 4 organization dedicated to educating and proposing policy solutions to ensure access to real justice for injured patients by eliminating up to $650 billion per year nationally of unnecessary costs due to defensive medicine.

For More Information Contact:
Susan L. Meyers, (404) 518-2271, slmeyers(at)comcast(dot)net

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Susan L. Meyers
Patients for Fair Compensation
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