Medical Malpractice:

Few Claims Resolved Through Michigan's Voluntary Arbitration Program

HRD-91-38: Published: Dec 27, 1990. Publicly Released: Jan 28, 1991.

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Pursuant to a congressional request, GAO reviewed the Michigan Medical Malpractice Arbitration Program, focusing on: (1) the extent of hospital, health care provider, and patient participation; (2) the arbitration alternative's effect on medical malpractice claims resolution; and (3) whether arbitration contributed to reduced medical malpractice insurance costs.

GAO found that: (1) few hospitals, health care providers, and patients chose to participate in the program; (2) between 1976 and 1989, plaintiffs filed about 800 arbitration claims, compared to an estimated 20,000 litigated claims; (3) due to low program participation, it was difficult to determine the program's overall effect on medical malpractice claims resolution, but arbitration did appear to result in timely claims resolution; (4) in Michigan, malpractice insurance premiums continued to increase, although at a decreased rate since 1986; (5) national data indicated a decline in malpractice insurance premium rates since about 1988; (6) Michigan's primary malpractice insurers believed that the arbitration program did not contribute to the reduction of malpractice insurance costs or the slowing down of the rate of increase, due to the low participation rate; and (7) interest groups believed that program participation could be increased by providing economic incentives to patients and including arbitration agreements in health insurance plans.

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