- Research Handbooks in Law and Economics series
Edited by Jennifer H. Arlen
Chapter 2: Economic analysis of medical malpractice liability and its reform
Patients seeking medical treatment face a serious risk that they will be severely injured or killed by the treatment they receive. Studies suggest that 4 to 18 percent of patients seeking care in hospitals are the victims of preventable medical error, with many suffering serious injury. About 1 percent of hospital patients suffer errors that constitute medical negligence (Brennan et al. 1991). Moreover, medical error reaches beyond hospital walls. Many patients seeking care from their regular physicians routinely receive less than medically recommended care. These medical errors cause enormous human suffering. They also are costly. Medical error increases average hospital costs by $1,246 per patient admission, and increases average costs in the riskiest hospitals by $4,769 per patient admission (Mello et al. 2007, 847). Overall, medical error costs about $17–29 billion per year (Institute of Medicine 2000).
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