American Journal of Law & Medicine

Redefining the physician selection process and rewriting medical malpractice settlement disclosure webpages.


Consider a mother of two who works full-time as a secretary in order to provide for her family. For several months in early 2000, she had excruciating lower back pain--the consequences, she believed, of playing high-school and college field-hockey. At work, she was unable to stand up from her chair without tremendous pain; at home, she was unable to sleep soundly. After visiting several physicians and undergoing a battery of diagnostic tests, the need for surgery became apparent. She consulted an orthopedic surgeon and was impressed with his qualifications. After informing her employer and seeking the advice of her family and friends, she consented to surgery. What the mother of two did not know, however, was that she had entrusted her life and livelihood to a surgeon who, in the ten years preceding her surgery, had settled twelve medical malpractice claims for an average of just under $300,000 per claim. (1)

Nearly every new parent faces a more common situation. Imagine that you just welcomed a beautiful baby girl into your life, and must now begin looking for a pediatrician. No one short of the most outstanding pediatrician will suffice. Your friend recommends Doctor Mary, who recently finished her residency and moved to your state. She has impeccable credentials and her office is only a ten-minute drive from your home. She has been practicing there for two years. You met Doctor Mary and believe that she is very friendly, caring, and well qualified. Before entrusting her to treat your baby girl, would you like to know that in her two years of practice she has settled two malpractice claims, one for $74,000, and the other for $71,000?

Beginning in 1986, the Health Care Quality Improvement Act required that all physicians' medical malpractice settlements be reported to, and housed in, a National Practitioner Data Bank (NPDB). (2) The information in the NPDB is not, and has never been, publicly accessible. (3) In 1996, after several failed legislative attempts to open the NPDB to public inspection, states began implementing publicly accessible "physician profiles" to provide comparable physician malpractice settlement information. (4)

Despite nearly ten years of physician profile proliferation, there remain several fundamental flaws in states' efforts. First, advocates' public policy arguments to publicly disseminate physicians' malpractice settlement histories are unpersuasive. Second, many consumers lack the requisite background to understand how the dynamic between insurers, physicians, plaintiffs, their attorneys, and the expense of litigation affects reported malpractice information. Third, many studies concerning the correlation between malpractice settlements and future medical negligence have reached conflicting conclusions, such that there may be no predictive value to settlement reporting, and therefore the premise for allowing public access may itself be flawed. (5) Finally, because many physician profile statutes--particularly as they relate to malpractice settlement information--reflect a compromise between advocates and opponents of settlement disclosure, disclosure mechanisms are often complicated and may hinder consumers from properly using settlement information in their physician selection processes. (6)

By way of example, every state provides publicly accessible physician profiles via the Internet. Of these states, fourteen currently provide medical malpractice settlement information available through the Internet. (7) Of these fourteen states, however, only seven would disclose the settlement information of Doctor Mary, the new pediatrician, and the presentation of the settlement information would vary greatly between states. (8) The remaining seven states' websites would provide no settlement information under Doctor Mary's profile.

Although a determinative assessment of the public policy behind medical malpractice settlement disclosure webpages is significantly beyond the scope of this article, it is my aim to identify the shortcomings in rationales proffered by advocates and legislators, and illustrate that the public policy behind disclosing malpractice settlement histories, at the very least, should be reconsidered. This article also examines the current mechanisms that states use to disclose malpractice settlement information to the public, and argues that these mechanisms, in their current form, are too problematic to benefit the public. Finally, in the event that public disclosure is ultimately determined as sound through proper public discourse, the article presents a model webpage that will supply the public sufficient background information to explain the implications of malpractice settlements, and present the settlement information in a manner that is least misleading, and most helpful, to the public.


In 1986, Congress enacted the Health Care Quality Improvement Act (HCQIA) (9) in order to provide both effective peer review and interstate monitoring of incompetent physicians. (10) The HCQIA also called for establishment of the NPDB, whose regulations required reporting of any payment made on behalf of a physician for the purposes of a settlement, partial settlement, or as payment for malpractice claims, licensing actions, and adverse actions taken by any health care entity. (11)

The NPDB "was designed to provide a clearinghouse for information regarding licensing, disciplinary action, and peer review regarding all medical practitioners" (12) to sophisticated health care entities only. (13) Congress' rationale for enacting such legislation was two-fold. First, physicians' payment information was gathered to provide states with the malpractice histories of incompetent physicians who were moving from state to state to escape their malpractice records. (14) Second, because the NPDB provided qualified antitrust immunity to hospitals and their peer review boards, (15) it was intended to encourage peer review and improve both the rigor of quality assurance and the quality of health care. (16)


The medical malpractice reporting requirement applies to any person or entity making any malpractice payment on a physician's behalf. (17) Because there is no minimum settlement threshold, "even a settlement of one cent, if paid as a result of a written claim, must be reported...." (18) The report must contain a description of the injuries, acts, or omissions that resulted in the initial complaint against the physician, and failure to report any payment could result in up to a $10,000 fine. (19)

Congress' basis for inclusion of the malpractice-payment-reporting requirement is questionable, however. Congress heard no evidence to demonstrate that past malpractice is a reliable predictor of future medical negligence and although there were reports that medical malpractice lawsuits rose seventy-two percent (20) from 1975 to 1986, Congress heard no credible evidence that the increase in claims signified an increase in malpractice. (21)

Regardless of medical malpractice settlements' predictive value, Congress concluded that all settlements should be reported to the NPDB. (22) At bottom was (1) the intent that settlement information only be used by sophisticated health care entities, and (2) the induction that "if a physician has been sued 34 times, as one physician presented at the Congressional hearings on the HCQIA, then the physician must be incompetent at least some of the time." (23)


Since its inception, the NPDB has been inaccessible to the public. (24) When the regulations for the NPDB were promulgated, Congress debated the issue of public accessibility, and concluded that allowing it would detract from the purpose the NPDB was intended to serve. (25) In this view, public access to malpractice settlement information would be gratuitous. A principal justification for mandating settlement disclosure was that the information would only be used by sophisticated health care entities that are aware of the complex issues attendant malpractice settlements.

Despite the clear, original intent of Congress to the contrary, there have been numerous legislative attempts to grant public access to the NPDB, each either ignoring, or insufficiently addressing, Congress' original concerns about public dissemination. (26) Although none of these attempts have been successful, they may have hastened the development of state physician profiles. (27)

In 1996, Massachusetts became the first state to introduce physician profiles to help the public avoid negligent physicians. (28) The idea that states essentially could create their own state-specific NPDB was so appealing that by 1997 several state legislatures were considering physician profile bills. (29) By 2000, because of the perceived success of physician profiles, over two dozen states had enacted some form of physician profile data bank. (30) At the time of this article's publication, all fifty states as well as the District of Columbia have physician profiles in one form or another. (31)


Since its first appearance in Massachusetts in 1996, the medical malpractice settlement disclosure requirement has generated enormous debate. (32) Much of the impetus to disclose malpractice settlement information comes from the fact that the information is included in the NPDB. (33) Advocates contend that if more than three-quarters of the reports in the NPDB are malpractice payment reports (34) and if hospitals, professional organizations, and state licensing boards can access the information to discover negligent physicians, (35) then consumers should also have access to similar information so they too can identify negligent physicians in their physician selection processes.

Currently, seventeen (36) states require that malpractice settlement information be made publicly available. Increased consumer demand for this information has led many states to either enact legislation that includes malpractice settlement disclosure, or amend their present physician profile statutes to include malpractice settlements. (37)


Physician profiles developed from the premise that by allowing public access to a greater amount of physician information consumers could protect themselves from incompetent physicians. (38) Public dissemination of medical malpractice settlements was specifically intended to improve health care by publicly exposing incidents of possible medical negligence, thereby deterring future negligence. (39)

Advocates of disclosure argue that consumers have the right to learn as much information about their physicians as possible, including malpractice settlement histories. (40) At the same time, many argue that settlement information is misleading and may thus unjustifiably tarnish competent physicians' reputations as well as disserve the interests of consumers who may misinterpret the information. Underlying each position is whether malpractice settlements do indeed predict future medical negligence.


Society is increasingly unwilling to accept the notion that "doctor knows best," (41) and patients want to play a more active role in their medical decisions. Advocates commonly declare "You know more about the used car you buy than you do about the doctor who is going to operate on you." (42) To this end, advocates argue that patients need as much information about physicians' histories as possible, including settlement information. (43)

1. Informed Consent

The doctrine of informed consent dictates that a patient must be informed of all material information relevant to a proposed course of treatment before valid consent can be given. (44) Generally, "material" information includes all potential risks, benefits, and side effects associated with a procedure, as well as the details of the procedure. (45)

In 1914, Justice Cardozo wrote that "[e]very human being of adult years and sound mind has a right to determine what shall be done with his own body." (46) Consistent with this tenet and the informed consent doctrine is the notion that patients need all information relevant to a proposed course of treatment because they lack the specific medical knowledge to make autonomous treatment decisions. (47) Advocates go one step further than traditional notions of informed consent, arguing that because physicians themselves are a critical component of a proposed course of treatment, patients need information about their prospective physicians to make truly informed treatment choices. (48) Thus, advocates seek to empower medical consumers by giving them as much information about physicians as possible, arguing that doing so is critical to the physician selection process. (49)

The immediate shortcoming of this position is that informed consent is traditionally applied only in the context of the physician-patient relationship. (50) The duty does not arise, and the relationship does not begin, until treatment begins. (51) Therefore, until a physician-patient relationship is formed, the doctrine of informed consent is inapplicable. (52)

Admittedly, the cavil about the necessity for a physician-patient relationship sidesteps the issue of whether settlement information should be deemed "material" and thus disclosed to the patient. (53) However, implicit in the informed consent doctrine is the notion that information given to the patients is reliable. Indeed, advocates seek settlement information upon the premise that such information serves some predictive value of future negligence. If the information, however, does not predict future negligence, and/or the information is presented to consumers in a confusing or complicated manner, the value of providing the information is entirely lost because it can serve no function in assisting patients to make informed decisions. As Parts III and IV argue below, the predictive value of settlement information is questionable given a survey of relevant studies; moreover, states present settlement information in a manner that is easily misunderstood. Taken together, these propositions negate the purpose of settlement disclosure.

As important as the nature of informed consent, is the nature of medical malpractice settlements. Indeed, malpractice claims often settle for their nuisance value because settlement is less expensive and less time consuming than the cost of litigation, and it avoids the litigation's distraction to the physician. (54) In addition, physicians' insurance companies may instruct them to avoid litigation if an opportunity arises to settle a claim for its nuisance value. (55) Settling for the nuisance value of a claim is not an admission of malpractice, however, and the medical community fears that consumers may mistakenly construe a settlement as malpractice. (56) Often, consumers lack a sophisticated understanding of the role that settlements play in the reduction of transactions costs; once a colorable claim is made, the claim may be settled regardless of whether a physician is negligent if it is less expensive to settle than to litigate. (57) In these instances, therefore, settlement of a malpractice claim is an economic decision rather than an admission of negligence. …

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