National Costs of the Medical Liability System

Posted: 11 Sep 2010

See all articles by Michelle M. Mello

Michelle M. Mello

Stanford Law School; Department of Medicine

Amitabh Chandra

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Atul Gawande

Harvard University - T.H. Chan School of Public Health

David M. Studdert

University of Melbourne - Faculty of Law & Faculty of Medicine, Dentistry and Health Sciences

Date Written: September 1, 2010

Abstract

This paper estimates the national costs of the medical liability system, including indemnity payments, administrative costs, defensive medicine costs, and lost clinician work time, synthesizing data from a variety of sources. Total costs are estimated at $55.6 billion in 2008, including $45.6 billion in defensive medicine costs, $5.7 billion in indemnity payments, and over $4 billion in administrative and other expenses. The quality of the evidence underlying the estimates is discussed. We conclude that although the liability system is costly in absolute terms, because it accounts for only a small proportion (2.4%) of total health care spending, medical liability expenditures cannot be the main, or even one of the most important, drivers of rising health care costs.

Keywords: malpractice, liability, medical, health care

JEL Classification: H51, I10, K13

Suggested Citation

Mello, Michelle M. and Chandra, Amitabh and Gawande, Atul and Studdert, David M., National Costs of the Medical Liability System (September 1, 2010). Health Affairs, Vol. 29, No. 9, 2010. Available at SSRN: https://ssrn.com/abstract=1674910

Michelle M. Mello (Contact Author)

Stanford Law School ( email )

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HOME PAGE: http://https://law.stanford.edu/directory/michelle-m-mello/

Department of Medicine ( email )

Center for Health Policy / PCOR
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Stanford, CA 94305
United States

HOME PAGE: http://https://profiles.stanford.edu/michelle-mello?tab=bio

Amitabh Chandra

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Atul Gawande

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
United States

David M. Studdert

University of Melbourne - Faculty of Law & Faculty of Medicine, Dentistry and Health Sciences ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

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