Medical malpractice settlements are agreements reached between injured patients and healthcare providers and institutions (often through their insurance companies) where the provider is alleged to have deviated from accepted standards of medical care, resulting in patient harm.
A settlement offer aims to compensate victims for their suffering without going through a lengthy trial process.
While securing a fair settlement can provide relief more quickly than costly and uncertain litigation, understanding the implications of and navigating negotiations requires professional legal guidance. If you need help with any aspect of your medical malpractice claim, Rosenfeld Injury Lawyers is here to help.
How Much Is the Average Medical Malpractice Settlement?
According to the National Practitioner Data Bank, the national average settlement for medical malpractice claims in 2014 was approximately $329,565. [1] This figure saw an increase by 2018 when the average climbed to $358,451. [2]
The average settlement amounts vary significantly across the United States, reflecting differences in individual case circumstances, legal environments, and state laws.
Illinois stands out among states for its high volume of medical malpractice cases, with a total of $222 million paid out in claims in 2022 alone. [1] Illinois exhibited a notably higher average payment in medical malpractice lawsuits, with an average compensation payout of $641,830 in 2017. [2]
At Rosenfeld Injury Lawyers, we’ve had many medical malpractice claims that have settled for well above the average payout.
We secured an $8,500,000 settlement for the family of a man who died following a routine outpatient surgery due to the staff’s failure to monitor him.
We recovered $4,150,000 in a hospital wrongful death case involving a woman who fell while walking to the bathroom despite numerous calls to nurses for assistance.
We secured a $5,000,000 surgical malpractice settlement involving a retained surgical instrument that was not identified and eventually became infected resulting in sepsis.
Medical Malpractice Payouts by State
Medical malpractice payouts can vary significantly from state to state due to differences in laws, court systems, and insurance regulations.
Understanding how these settlements work within your specific jurisdiction is crucial if you suspect a medical error has led to harm or injury. This information will prepare you for realistic expectations when considering pursuing a medical malpractice claim.
Illinois: A Closer Look at the Highest Average Payout
In 2017, Illinois marked its position as the state with the highest average medical malpractice payout, recording an average of $641,830. [2]
Medical Malpractice Settlements by State
The following list illustrates the contrasts in average settlements among different states:
- Maine: $621,714 [2]
- Connecticut: $601,645 [2]
- New Hampshire: $564,509 [2]
- Alaska: $330,800 [2]
- Utah: $346,787 [2]
While states like Maine, Connecticut, and New Hampshire report averages significantly higher than the national mean, others such as Alaska and Utah align more closely with the overall U.S. average.
States that have seen the highest overall payout in 2022 include:
- New York: $551 million [2]
- Florida: $382 million [2]
- Pennsylvania: $295 million [2]
- Illinois: $222 million [2]
- New Jersey: $215 million [2]
What Is the Medical Malpractice Settlement Formula?
Calculating a settlement in a medical malpractice case involves a comprehensive consideration of both economic and non-economic damages. The basic formula for determining the settlement value is:
Settlement Value = Economic Damages (past and future) + Non-Economic Damages (past and future)
- Economic Damages: These are quantifiable financial losses that stem from malpractice. They can include past and future healthcare costs, lost wages, and loss of earning capacity.
- Non-Economic Damages: These damages encompass the more subjective, non-monetary impacts of malpractice. This category may include physical pain and suffering, mental suffering/mental anguish, loss of companionship, and diminished quality of life.
Calculating Non-Economic Damages
Calculating non-economic damages involves techniques that attempt to assess the intangible impacts on a victim’s life. Two common methods used are the Multiplier Method and the Per Diem Method.
The Multiplier Method
This involves taking the total economic damages and multiplying it by a number (typically between 1 and 5) based on the severity of the injury. Severe cases involving permanent disability will use a higher multiplier.
For example, if the economic damages are $100,000 and a multiplier of 3 is used for a fairly serious injury, then the noneconomic damages would be $300,000.
The Per Diem Method
This method assigns a daily value to the victim’s pain and suffering, multiplying it by the number of days the victim is expected to experience discomfort or distress due to the malpractice.
For example, if a daily rate of $200 is chosen and the victim suffers for 365 days, the non-economic damages would be calculated as $200 times 365, totaling $73,000.
Each state may have different approaches to calculating medical malpractice damages, including caps on noneconomic damages, which can significantly affect the total settlement value.
What Determines Medical Malpractice Settlement Amounts?
The amount of a malpractice settlement is influenced by several factors that collectively determine the value of a claim. Below is an overview of these elements and how they may impact your case:
- Severity of Injuries: More serious or permanent injuries typically result in higher compensation, as they affect quality of life, require ongoing medical treatment and higher medical bills, and may lead to lifelong disability. This is particularly problematic for patients who have insufficient health insurance.
- Medical Malpractice Insurance Coverage: Payment amounts often depend on the limits identified within the negligent party’s medical malpractice insurance company policy. Higher policy limits in an insurance policy can mean larger settlements.
- Severity of Negligence: The degree to which the healthcare provider deviated from standard medical practice plays a prominent role. Gross negligence or willful disregard for patient safety might result in higher settlement amounts.
- Strength of Evidence: The strength of evidence—like medical records, testimony, and expert analysis—can bolster your claim. Strong, clear evidence can lead to a more substantial settlement because it increases the likelihood of proving negligence in court.
- Attorney Competence: The effectiveness of your law firm is critical in negotiating with insurance companies and opposing counsel, and if necessary, presenting your case in court. An experienced medical malpractice attorney understands the subtleties of state laws and the medical industry, which can significantly influence the success and size of a settlement.
Is There a Cap on Medical Malpractice Lawsuit Settlements?
Nationwide, there’s considerable variation on whether and how states cap damages in medical malpractice lawsuits. Some states impose caps only on non-economic damages like pain and suffering while allowing full recovery of economic losses such as medical bills and lost wages. Other jurisdictions limit both non-economic and economic damages.
It may be helpful to know that there are some states that significantly limit recovery through these medical malpractice caps. For example:
- Kansas: Kansas has a total damages cap of $350,000 for an act of malpractice occurring after July 1, 2022. This encompasses both economic and non-economic damages. [3]
- Indiana: Indiana limits the total amount recoverable in malpractice claims with a cap set at $1,800,000 for any act of malpractice that occurs after June 30, 2019. [4]
- Colorado: In Colorado, the total damages cannot exceed $1 million. [5]
Illinois Has no Damage Caps for Medical Malpractice Claims
In Illinois, there are no damage caps for medical malpractice claims in the state. The Illinois Supreme Court has held that limiting compensation for victims of medical negligence is unconstitutional; therefore, plaintiffs may seek the full extent of compensation deemed appropriate for their injuries without statutory limitation. [6]
Medical Malpractice Claim Amounts by Injury Type
Understanding the calculation of medical malpractice claim amounts by injury type is crucial, as it sheds light on the considerations that influence the financial compensation awarded to victims of medical negligence. The following is a breakdown of payouts based on type of negligence from 2017. [2]
Treatment-Related Claims
These claims are generally related to improper or delayed treatment or failure to treat, leading to harm.
- Prevalence: Accounted for 28% of all claims that year.
- Average Payout: Between 2012 and 2017, the average medical malpractice settlement payout was $218,909.
- Notable Outcomes: The high payouts in this category over the five years were predominantly for cases involving outcomes like quadriplegic conditions and brain damage requiring lifelong care.
Diagnosis-Related Claims
These claims are related to diagnosis and could include delayed diagnosis, incorrect diagnosis, failure to diagnose, or other comparable cases, leading to injuries and losses.
- Prevalence: Made up 26% of all claims during that year.
- Average Payout: Between 2012 and 2017, the average payment was $413,929.
- Notable Outcomes: Similar to treatment-related claims, the highest payouts were generally associated with severe, life-altering conditions such as quadriplegia and brain damage.
Surgery-Related Claims
These claims were related to surgical errors, such as unnecessary procedures or improper performance.
- Prevalence: Surgical errors comprised 23% of claims that year.
- Average Payout: The average payment from 2012 to 2017 was $316,261.
- Notable Outcomes: A significant number of the highest payouts in this category arose from claims related to unnecessary procedures.
Medication-Related Claims
Medication-related claims generally occur when a patient is suffering damages from having the wrong dose or medication given.
- Prevalence: Represented 6% of claims that year.
- Average Payout: Between 2012 and 2017, the average payout was $271,328.
- Notable Outcomes: The most substantial payouts were often linked to catastrophic outcomes such as quadriplegia, brain damage, the need for lifelong care, and major or significant permanent injury.
Obstetric-Related Claims
These claims most often relate to failure to identify fetal distress and delay in treatment.
- Prevalence: Accounted for 5% of claims.
- Average Payout: The average payment from 2012 to 2017 was $644,636, marking the highest average payout among the categories.
- Notable Outcomes: The majority of the highest payouts were for cases involving delay in treatment or failure to recognize fetal distress, leading to severe injuries.
Monitoring-Related Claims
These claims were mostly filed because of a failure to delay a case when indicated and failure to monitor.
- Prevalence: Made up 4% of all claims.
- Average Payout: Between 2012 and 2017, the average payout was $342,577.
- Notable Outcomes: Significant permanent injury or the wrongful death of a patient resulted in the highest payouts in this category.
Anesthesia-Related Claims
These claims generally occur when there are issues with intubation and monitoring or when a case is not delayed or referred when needed.
- Prevalence: Represented 2% of all claims that year.
- Average Payout: The average payout was $428,654, indicating severe repercussions in cases where anesthesia was incorrectly administered or managed.
- Notable Outcomes: Quadriplegic, brain damage, and death led to the highest payouts in this category.
Damages Compensated in Medical Malpractice Claims
When pursuing a medical malpractice claim, damages are meant to compensate victims for losses suffered as a result of the healthcare provider’s negligence. They are typically categorized in the following manner:
Economic Damages
Economic damages cover financial losses directly tied to malpractice. They include past and future medical expenses, rehabilitation and occupational therapy costs, and adaptive equipment required for long-term disability. Lost earnings and future lost wages are also included under economic damages.
Non-Economic Damages
Non-economic damages offer compensation for the more subjective, non-monetary consequences of medical malpractice. These can include pain and suffering, emotional distress, and loss of companionship or consortium if relationships are impacted by the injury.
Punitive Damages
Punitive damages are less common in medical malpractice suits. They are not intended to compensate the plaintiff but to punish the defendant for particularly egregious behavior and deter similar conduct in the future.
Wrongful Death Cases
In medical malpractice cases where a patient dies, wrongful death damages come into play. These are awarded to compensate the estate and surviving family members for the untimely death of their loved one.
They may include funeral and burial costs, expenses associated with medical care prior to the wrongful death, lost future earnings that would have supported survivors, and non-economic losses related to grief or loss of companionship. Families may also be entitled to lost retirement fund contributions due to their loved one’s death.
How Long Does a Medical Malpractice Settlement Take?
A medical malpractice settlement can take anywhere from several months to several years to resolve. Factors that may affect this timeline include:
- The complexity of the case: Complex cases typically require intricate medical evidence and testimony from expert witnesses, both of which can be time-consuming.
- The extent of the injury: Severe or long-term medical malpractice injuries may take longer to adequately assess regarding future needs, further delaying settlement.
- Willingness to negotiate: Both parties need to agree on fault and damages for settlements. If one party is unwilling to discuss a settlement, it will prolong negotiations significantly or make them impossible.
Understanding the complexities and factors that determine when medical malpractice cases end can help you know what to expect moving forward. For guidance through this process, contact Rosenfeld Injury Lawyers today to speak with a medical malpractice attorney.
How Are Medical Malpractice Settlements Paid Out?
Settlements can be paid out in a few different ways, depending on the specifics of an agreement between the plaintiff and defendant.
- Lump-Sum Payment: The settlement amount is fully paid all at once. This approach provides immediate funds to cover medical expenses, lost wages, and other damages.
- Structured Settlement: Here, medical malpractice payments are spread over time in installments rather than a single payment.
- Combined Approach: Sometimes, a settlement might include both a lump-sum payment and structured payments. An initial lump sum can cover immediate costs, with structured payouts handling future needs.
Lawyer Fees are Paid on a Contingency Fee Basis
Legal services in most malpractice cases are offered on a contingency fee basis, which means attorney fees are contingent upon securing compensation. The client will not owe their attorney anything unless they win a settlement or court award.
If successful, the contingent fee is calculated as a percentage of the recovered amount, set through an agreement signed at the start of legal representation.
For help with all aspects of your medical malpractice claim, contact Rosenfeld Injury Lawyers today to speak with a medical malpractice lawyer.
Are Medical Malpractice Settlements Taxable?
Typically, the compensation received from a personal injury claim or medical malpractice lawsuit, whether through a settlement or a court-ordered award, is not taxable under federal or Illinois law.
This principle is grounded in the understanding that the compensation is not an income or a gain but is restitution meant to return the plaintiff to their financial state prior to the medical malpractice incident.
How to File a Medical Malpractice Claim
Filing a medical malpractice claim can be a complex and overwhelming process. However, following these steps can help you initiate your claim effectively. Here’s what you need to do and how we can help:
- Legal Consultation: Seek legal advice from our attorneys specializing in medical malpractice. Our experienced lawyers can offer you an understanding of your rights, evaluate your case’s viability, and guide you through the legal complexities of filing a claim.
- Documentation: We will begin by gathering all necessary documentation related to your medical care, including medical records, bills, and any correspondence with healthcare providers.
- Medical Assessment: We’ll consult with a qualified medical professional to get an independent evaluation of your medical condition. This step is vital to establish that your injuries resulted from a healthcare provider’s negligence.
- Hiring a Lawyer: Our team has extensive experience in handling medical malpractice cases. We will help you take the necessary steps to file your claim so you can get the compensation you deserve.
Working with Rosenfeld Injury Lawyers can significantly increase your chances of a successful resolution. We will make sure all necessary steps are taken to file your claim. For help after a medical malpractice case, contact us today by reaching out online or calling us at (888) 424-5757.
Resources: [1] Forbes, [2] HomeTown Health, [3] Kansas Statute, [4] Indiana State Medical Association, [5] Colorado Revised Statutes, [6] Illinois Supreme Court