Defense costs for malpractice cases vary widely among practice specialties, but in all cases are higher for claims resulting in indemnity payments, according to a letter published in the New England Journal of Medicine.
The lead author, a researcher with RAND Corporation, a non-profit research institution, and co-authors from Harvard University, University of Southern California, and Massachusetts General Hospital analyzed defense costs associated with 26,853 malpractice claims closed between 1995 and 2005. Claims contained information on whether or not a payment was made to a patient, the specialty of the physician, and the defense costs associated with the claim.
Defense costs included costs directly associated with the cost of defending the individual claim—including expert-witness fees and filing costs. The mean defense cost was about $23,000; however, claims where an indemnity payment was made were associated with higher mean defense costs than those where no payment was made ($45,070 vs. $17,130).
Mean defense costs varied widely among specialties, the researchers found. Cardiologists had the highest defense costs: Claims against cardiologists which resulted in an indemnity payment had a mean defense cost of $83,056.
The second highest specialty was oncology, with defense costs of $78,890 for cases involving indemnity payments. Neurology, family general practice, psychiatry, obstetrics, internal medicine, and pediatrics were other specialties with higher defense costs. The specialties with the lowest defense costs were ophthalmology ($23,780) and dermatology ($24,007). Other specialties with lower defense costs included urology, plastic surgery, gynecology, and nephrology.
The authors point out that the variation among specialties is not necessarily the same as the variation in the frequency or size of claims. “These findings show that although the costs of dispute resolution are higher for claims that result in indemnity payments, there is still a meaningful cost of resolving claims that never result in payment,” the authors wrote. They concluded that “lowering the costs of dispute resolution could lead to considerable savings for physicians and insurers, particularly in specialties with high mean defense costs.”