NCPA - National Center for Policy Analysis

Admitting Medical Errors Reduces Litigation

March 7, 2000

Doctors, hospitals and managed care organizations are loath to admit mistakes, due to the possibility of malpractice suits. However, the Veterans Affairs Medical Center in Lexington, Ky., says full disclosure of medical errors to injured patients is a way to keep malpractice costs down, even when patients would not otherwise have learned of the problem.

The VA hospital initiated its honesty policy in 1987, after losing two malpractice judgments totaling more than $1.5 million. Under the policy, a hospital committee identifies and investigates potential malpractice cases, notifies patients or their relatives, and offers money if the accident or negligence resulted in loss of life, earnings potential or other functions.

While federal agencies have immunity against punitive damages, VA hospitals can be sued for compensatory damages under the Federal Tort Claims Act.

  • A study the hospital conducted that compared its malpractice costs to those of 35 similar VA centers between 1990 and 1996 found payments for malpractice over the period ranged from less than $1 million to $12 million.
  • Only seven hospitals had lower costs than Lexington's $1.3 million total.
  • In five of the 88 instances in which malpractice claims were filed against the Lexington hospital during the study period, the patients probably would not have learned of the problem if the hospital had not told, say the study's authors.

Doctors generally agree that the angriest people are the ones who sue for malpractice, and revealing problems "diminishes the anger and desire for revenge that often motivate patients' litigation," according to Steve S. Kraman, the lead author of the study published in the Annals of Internal Medicine.

Source: "When Honesty is the Cheapest Policy," Congressional Quarterly Researcher, February 25, 2000; New York Times News Service, "Research On Malpractice Costs Reports Honesty Is Best Policy," Dallas Morning News, January 3, 2000.


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