This article describes the problem of health care error in the United States of America and the various regulatory, liability, and compensation systems that deal with medical mistakes. In terms of frequency, direct costs, and aggregate social costs, the problem of medical errors is staggering. Millions of patients are killed or injured every year. A large percentage of adverse events could be avoided by the use of reasonable care. Regulators have not dealt with these problems effectively. Regulators specifically appointed to police the medical profession are often lax, whether because of capture, or from a sense of "there but for the grace of God go I." When it comes to health care, the primary focus of federal and state authorities has been how to pay for it, rather than how best to elevate its quality or protect patients from harm. Against this backdrop, the liability system does better than most people believe. It sorts claims with reasonable accuracy and doles out compensation in proportion to the severity of patients' injuries. But the liability system deals with the tip of the iceberg, because only a minority of injured patients sue. The liability system is also stingy: Injured patients with valid claims often receive little or no compensation.

This article also summarizes the findings of empirical studies our research group has done of Texas medical malpractice litigation, using an enormous database of closed claims.