The medical liability system costs the nation an estimated $55.6 billion annually, according to a study published Sept. 7 in Health Affairs. Based on 2008 dollars, the estimate represents about 2.4% of national health care spending that year.
The estimate includes economic, non-economic and punitive damages paid to claimants; administrative expenses such as attorneys' fees and other legal expenses; the cost of defensive medicine, or medical services ordered primarily to minimize a physician's liability risk; and other costs such as lost clinician work time.
"Our estimates should be interpreted cautiously, with recognition that some system cost elements were excluded and others - particularly the defensive medicine figures - were estimated based on substantial assumptions and extrapolations," the authors state. "…Although our estimates are imperfect, they are more comprehensive, transparent, and firmly grounded in the best available data than previous estimates of liability system costs."