Ertnews, 26/03/2026

Κατώτατος μισθός: Πώς διαμορφώνονται οι αυξήσεις – Αναλυτικά παραδείγματα

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26/03/2026 Ertnews

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Who profits from medical malpractice lawsuits?

Howard Smith, MD Physician  October 26, 2025

I define a frivolous medical malpractice lawsuit as being caused by a random error of nature.

Plaintiffs are entitled to feel aggrieved and to seek legal counsel. Some, however, have ulterior motives.

Plaintiff attorneys are “good Samaritans.” They work for a contingency fee. This invites ulterior motives; however, because these attorneys bear the cost, motives do not matter. Only the value of a case matters and there is artificial intelligence to weed out the most remunerative. Claims that satisfy this criterion are then reviewed by medical experts, who are just “hired guns.” Only then is a claim represented as a malpractice lawsuit; the rest are declined. In the meantime, plaintiff attorneys assert to never represent a frivolous lawsuit. Without doubt, some are frivolous because 55,000 are dropped once filed and there are disclaimers in the contingency fee contract. Contingency fees pay $2.5 billion. The one thing plaintiff attorneys are not is a good Samaritan.

Defense attorneys have a different strategy. Knowing that 85,000 medical malpractice lawsuits need to be defended, they contract with medical malpractice insurance companies. They are “zealous advocates.” Because zealous advocates should recognize frivolous lawsuits when they see them, they should advise their assigned client of a potential legal strategy to countersue for malicious prosecution. However, countersuits are not part of the contract and $1.1 billion per year is more important. The one thing defense attorneys are not is a zealous advocate.

Next are medical experts. 85,000 work for plaintiff attorneys. An equal number work for defense attorneys. This is “self-regulation” in the medical profession. Many spend as much as 25 percent of their professional time on self-regulation. The medical profession may be self-regulating; however, they are hired guns.

Malpractice insurance companies claim victimhood as the “cash cow.” They have contracts with defense attorneys, who prepare the strategy for a defense, and every policy has a clause requiring the insured physician to cooperate with the strategy. Malpractice carriers would rather settle a completely defensible claim than risk a plaintiff verdict. Noteworthy are 27,000 settlements. Defense attorneys agree or risk losing contracts. Doctors comply or risk losing insurance coverage. Concerning premiums versus losses, profits are $25 billion per year, most of which is applied to reserves and is exempt from income taxes. Malpractice carriers are not victims.

The health care system is something else. Formerly, it was private hospitals and private practices self-regulated by free-market forces. Today, it is networks of hospitals, third-party payors, and physician groups dysregulated by the Affordable Care Act. Doctors join networks primarily for malpractice coverage. Most networks are self-insured for medical malpractice. Networks are paid by health insurances according to capitation, the number of insured lives they enroll. When doctors join, so do unwitting patients. This increases enrollment. Doctors are paid according to outcomes. Outcomes result from resource-based practice guideline, aka, best practices. Sometimes best practices depart from standards of care. The cost of health care is $4.9 trillion per year. Profit for networks is $600 billion. There are 85,000 medical malpractice lawsuits. This is how dots connect.

Why dots connect is a different matter. Many politicians are attorneys; consequently, no lawsuit is frivolous. Some, like Dick Durbin, begin their careers litigating medical malpractice.

Total revenues for the AMA exceed half-a-billion dollars per year. Politicians regard the AMA as the voice of the medical profession. As its voice, the AMA is OK with best practices. Its 2024 annual report, entitled “Why We Fight,” makes clear that frivolous lawsuits are not worth fighting over. In the report, the words, “frivolous lawsuit,” are nowhere to be found. Although there has been a malpractice crisis since the 1970s, it was not until 2003 and again in 2023 that the AMA acknowledged a medical malpractice crisis. In 1995, the AMA established the Litigation Center. However, between then and 2021, it is involved in 322 medical malpractice cases, which are only twelve per year. On the AMA’s board of trustees are doctors, who are executives of networks, consultants for malpractice and health insurance companies, medical experts, and attorneys. If frivolous lawsuits are not a big deal for the AMA, they are likewise for politicians. However, 75 percent of physicians do not belong to the AMA, which underscores that its influence on politicians is unwarranted.

There is also the tort system. The most notorious medical malpractice verdict in history is for $229.6 million. Because of the tort system, the jury never learns that the alleged injury is an error of nature. It takes three years to litigate and another two years for an appeal.

Last, but not least, are doctors. Because medical malpractice insurance can cost more than $100,000 per year, we cannot be faulted for joining networks. However, there are alternatives. One is a “prevailing party agreement,” which should be a condition of every patient/doctor relationship. It holds the losing party in a malpractice lawsuit liable for all the legal costs. Such alternatives would lower risks, and the need to join networks. However, most physicians choose not to rock the boat. Also, 170,000 of them make $17 billion per year as medical experts.

What is just described represents $650 billion per year, which is 2.4 percent of the GDP and is 11.6 times greater than $56 billion for medical malpractice litigation. For many, $56 billion is just the price of doing business. It is curious that this $56 billion figure has not changed since 2010. I am an OB/GYN. My risk exposure is 8.5 percent per year, which is one lawsuit every twelve years. I pay premiums for twelve years, to the tune of $1 million, to protect against one lawsuit, which is frivolous. This is absurd. To address this, I developed “CCC+C,” a simple but effective way to distinguish between a meritorious claim and a frivolous one. Unlike the well-known “4 Cs” of risk management (compassion, communication, competence, and charting), “CCC+C” is not about preventing lawsuits, but about evaluating them once filed.

Causation: Was the alleged harm truly caused by physician negligence, or was it an unavoidable error of nature?

Contract: Does the legal or insurance agreement actually support pursuing the claim, or is it being exploited?

Compliance: Did the physician follow accepted standards of care or established best practices?

+ Costs: Are the damages and litigation expenses proportionate, or is the case inflated beyond reason?

When a claim fails one or more of these tests, it is frivolous. When it satisfies all of them, it is meritorious. Despite the complexity of malpractice litigation, this framework works in practice. It provides clarity where none exists, even though no national databank tracks frivolous lawsuits.

Howard Smith is an obstetrics-gynecology physician.


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