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How is medical innovation affected by medical malpractice?

Malpractice reform can affect patients, but it also affects medical device innovation. You probably know that to prevent lawsuits, many doctors order more tests than necessary to confirm a diagnosis. While this is both good and bad for the patient due to a firm diagnosis but higher expenses, there's a light at the end of the tunnel. Since doctors only want to use the best equipment, medical device innovators are taking their time making technologies that are safer and more accurate.

How is innovation impacted by malpractice limits?

As it stands today, laws that limit malpractice lawsuits actually hurt innovation, because the companies may not make the machines as precise as they need to be. In reality, a country with a high number of malpractice lawsuits means doctors have to be more cautious and companies have to produce the best equipment they can to maintain sales and mitigate risk.

On top of this, doctors trying new equipment might order more diagnostic tests or use other technologies to verify the new equipment's safety, which helps patients know they're being treated as accurately as possible.

Does a higher limit for malpractice claims help patients?

Doctors choose the kind of technology they'll use based on the liability it exposes them to along with its usefulness. Interestingly, when states pass limits on medical malpractice awards, the amount of new patents drops. There is a complicated relationship between patents, innovation and liability that isn't completely clear. What is known is that the stronger the malpractice laws are, the more likely a patient is to have more tests and better treatments to reduce a doctor's risk of error.

Source: Forbes, "How Malpractice Reform Affects Medical Device Innovation," Michael Blanding, accessed March 24, 2017

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