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Medical Justice Services Deters Tort Abuse July 12, 2007

Posted by federalist in Healthcare.

Doctors tend to be an entrepreneurial group, so I’m not sure why this didn’t happen sooner: A company by the name of Medical Justice Services is selling active “insurance” to doctors against medical malpractice abuse.

One of the big problems of current medical malpractice law is that there’s a potential for enormous payouts when a case is won, but no penalty to plaintiffs for losing a case.  Since the risk-adjusted return for filing a suit is always positive there are lots of ambulance-chaser attorneys out there willing to buy a lottery ticket for the cost of filing a medical malpractice suit.  Just defending against all those frivolous suits has exacerbated medical insurance costs.

Medical Justice promises that it will countersue anyone filing a frivolous suit against a member.  Thanks to current law, this is apparently sufficient to make the expected return of a frivolous suit negative.

After five years of collecting data, we know that Medical Justice plan members are sued at a rate of under just 2% a year. The average doctor is sued at a rate of 8%-12% per year. And the company is top heavy with physicians in “high-risk” specialties.



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