1932

Abstract

This article evaluates the effects of medical malpractice reform on claiming, malpractice premiums, physician supply, and defensive medicine. We conclude that damage caps materially reduce claim frequency, payouts per claim, and total payouts. The effects of damage caps on malpractice premiums, physician supply, and defensive medicine are more modest. It is difficult to quantify the impact of reforms other than damage caps—partly because reforms are typically adopted as a package deal, and partly because of the limitations of the available data. We close by identifying three areas that would benefit from more research.

Loading

Article metrics loading...

/content/journals/10.1146/annurev-lawsocsci-060120-093911
2020-10-13
2024-04-20
Loading full text...

Full text loading...

/deliver/fulltext/lawsocsci/16/1/annurev-lawsocsci-060120-093911.html?itemId=/content/journals/10.1146/annurev-lawsocsci-060120-093911&mimeType=html&fmt=ahah

Literature Cited

  1. Avraham R. 2007. An empirical study of the impact of tort reforms on medical malpractice settlement payments. J. Leg. Stud. 36:Suppl. 2S183–229
    [Google Scholar]
  2. Avraham R, Schanzenbach M. 2015. The impact of tort reform on intensity of treatment: evidence from heart patients. J. Health Econ. 39:273–88
    [Google Scholar]
  3. Baker T. 2005. Medical malpractice and the insurance underwriting cycle. DePaul Law Rev 54:2393–438
    [Google Scholar]
  4. Black BS, Chung JW, Traczynski J, Udalova V, Vats S 2017. Medical liability insurance premia: 1990–2016 dataset, with literature review and summary information. J. Empir. Leg. Stud. 14:1238–54
    [Google Scholar]
  5. Black BS, Hyman DA, Silver C, Sage WM 2008. Defense costs and insurer reserves in medical malpractice and other personal injury cases: evidence from Texas, 1988–2004. Am. Law Econ. Rev. 10:2185–245
    [Google Scholar]
  6. Black BS, Silver C, Hyman DA, Sage WM 2005. Stability, not crisis: medical malpractice claim outcomes in Texas, 1988–2002. J. Empir. Leg. Stud. 2:207–59
    [Google Scholar]
  7. Boothman M, Blackwell A, Campbell D, Commiskey E, Anderson S 2009. A better approach to medical malpractice claims? The University of Michigan experience. J. Health Life Sci. Law 2:125–59
    [Google Scholar]
  8. Born PH, Eastman EM, Viscusi WK 2020. Reducing medical malpractice loss reserve volatility through tort reform. N. Am. Actuar. J. In press
    [Google Scholar]
  9. Born PH, Karl JB. 2016. The effect of tort reform on medical malpractice insurance market trends. J. Empir. Leg. Stud. 13:4718–55
    [Google Scholar]
  10. Born P, Viscusi WK, Baker T 2009. The effects of tort reform on medical malpractice insurers’ ultimate losses. J. Risk Insur. 76:1197–219
    [Google Scholar]
  11. Bovbjerg RR. 1989. Legislation on medical malpractice: further developments and a preliminary report card. U.C. Davis Law Rev. 22:499–556
    [Google Scholar]
  12. Bovbjerg RR, Bartow A. 2003. Understanding Pennsylvania's medical malpractice crisis: facts about liability insurance, the legal system, and health care in Pennsylvania Rep., Pew Proj. Med. Liabil., Pew Res. Cent Washington, DC: http://www.pewtrusts.org/en/research-and-analysis/reports/2003/06/16/understanding-pennsylvanias-medical-malpractice-crisis
  13. Chandra A, Nundy S, Seabury SA 2005. The growth of physician medical malpractice payments: evidence from the National Practitioner Data Bank. Health Aff 24: Suppl. Web Exclus. W5–240249
    [Google Scholar]
  14. Danzon P, Pauly M, Kington R 1990. The effects of malpractice litigation on physicians’ fees and incomes. Am. Econ. Rev. 80:2122–27
    [Google Scholar]
  15. Durrance CP. 2010. Noneconomic damage caps and medical malpractice claim frequency: a policy endogeneity approach. J. Law Econ. Organ. 26:3569–91
    [Google Scholar]
  16. Eisenberg T. 2013. The empirical effects of tort reform. Research Handbook on the Economics of Torts JH Arlen 513–50 Cheltenham, UK: Edward Elgar Publ.
    [Google Scholar]
  17. Encinosa WE, Hellinger FJ. 2005. Have state caps on malpractice awards increased the supply of physicians. Health Aff 24:Suppl. Web Exclus.W5–25058
    [Google Scholar]
  18. Frakes M, Gruber J. 2019. Defensive medicine: evidence from military immunity. Am. Econ. J. Econ. Policy 11:3197–231
    [Google Scholar]
  19. Frakes M, Gruber J. 2020. Defensive medicine and obstetric practices: evidence from the military health system. J. Empir. Leg. Stud. 17:14–37
    [Google Scholar]
  20. Gallagher TH, Mello MM, Sage WM, Bell SK, McDonald TB, Thomas EJ 2018. Can communication-and-resolution programs achieve their potential? Five key questions. Health Aff 37:111845–52
    [Google Scholar]
  21. Garber S, Greenberg MD, Rhodes H, Zhuo X, Adams JL 2009. Do noneconomic damages caps and attorney fee limits reduce access to justice for victims of medical negligence. J. Empir. Leg. Stud. 6:4637–86
    [Google Scholar]
  22. Golann D. 2011. Dropped medical malpractice claims: their surprising frequency, apparent causes, and potential remedies. Health Aff 30:71343–50
    [Google Scholar]
  23. Grace MF, Leverty JT. 2013. How tort reform affects insurance markets. J. Law Econ. Organ. 29:61253–78
    [Google Scholar]
  24. Helland E, Seabury SA. 2015. Tort reform and physician labor supply: a review of the evidence. Int. Rev. Law Econ. 42:192–202
    [Google Scholar]
  25. Helmchen LA, Lambert BL, McDonald TB 2016. Changes in physician practice patterns after implementation of a communication‐and‐resolution program. Health Serv. Res. 51:Suppl. 32516–36
    [Google Scholar]
  26. Ho B, Liu E. 2011. What's an apology worth? Decomposing the effect of apologies on medical malpractice payments using state apology laws. J. Empir. Leg. Stud. 8:Suppl. 1179–99
    [Google Scholar]
  27. Hyman DA, Black B, Silver C 2011. Settlement at policy limits and the duty to settle: evidence from Texas. J. Empir. Leg. Stud. 8:148–84
    [Google Scholar]
  28. Hyman DA, Black B, Silver C, Sage WM 2009. Estimating the effect of damages caps in medical malpractice cases: evidence from Texas. J. Leg. Anal. 1:1355–409
    [Google Scholar]
  29. Hyman DA, Black B, Zeiler K, Silver C, Sage WM 2007. Do defendants pay what juries award? Post-verdict haircuts in Texas medical malpractice cases, 1988–2003. J. Empir. Leg. Stud. 4:13–68
    [Google Scholar]
  30. Hyman DA, Rahmati MH, Black BS 2020. Medical malpractice and physician discipline: the good, the bad and the ugly SSRN Schol. Pap. 3205708 Soc. Sci. Res. Netw Rochester, NY: https://papers.ssrn.com/abstract=3205708
  31. Hyman DA, Silver C. 2006. Medical malpractice litigation and tort reform: It's the incentives, stupid. Vanderbilt Law Rev 59:1085–136
    [Google Scholar]
  32. Hyman DA, Silver C, Black B, Paik M 2015. Does tort reform affect physician supply? Evidence from Texas. Int. Rev. Law Econ. 42:203–18
    [Google Scholar]
  33. Jena AB, Seabury S, Lakdawalla D, Chandra A 2011. Malpractice risk according to physician specialty. New Engl. J. Med. 365:7629–36
    [Google Scholar]
  34. Kachalia A, Sands K, Van Niel M, Dodson S, Roche S et al. 2018. Effects of a communication-and-resolution program on hospitals’ malpractice claims and costs. Health Aff 37:111836–44
    [Google Scholar]
  35. Kessler D, McClellan M. 1996. Do doctors practice defensive medicine. Q. J. Econ. 111:2353–90
    [Google Scholar]
  36. Kessler D, McClellan M. 2002. Malpractice law and health care reform: optimal liability policy in an era of managed care. J. Public Econ. ISPE Spec. Issue 84:2175–97
    [Google Scholar]
  37. Kessler DP, Sage WM, Becker DJ 2005. Impact of malpractice reforms on the supply of physician services. JAMA 293:212618–25
    [Google Scholar]
  38. Klick J, Stratmann T. 2007. Medical malpractice reform and physicians in high‐risk specialties. J. Leg. Stud. 36:S2S121–42
    [Google Scholar]
  39. Kraman SS, Hamm G. 1999. Risk management: Extreme honesty may be the best policy. Ann. Intern. Med. 131:12963–67
    [Google Scholar]
  40. Kritzer HM. 1997. The wages of risk: the returns of contingency fee legal practice. DePaul Law Rev 47:267–320
    [Google Scholar]
  41. Kritzer HM. 2004. Risks, Reputations, and Rewards: Contingency Fee Legal Practice in the United States Stanford, CA: Stanford Law Politics, 1st ed..
  42. Lee CG, LaFountain RC. 2011. Medical malpractice litigation in state courts. Caseload Highlights 18:1 http://www.courtstatistics.org/∼/media/Microsites/Files/CSP/Highlights/18_1_Medical_Malpractice_In_State_Courts.ashx
    [Google Scholar]
  43. Lieber EMJ. 2014. Medical malpractice reform, the supply of physicians, and adverse selection. J. Law Econ. 57:2501–27
    [Google Scholar]
  44. Liu J, Hyman DA. 2019. Targeting bad doctors: lessons from Indiana, 1975–2015. J. Empir. Leg. Stud. 16:2248–80
    [Google Scholar]
  45. Martin J, Daniels S. 2009. “The juice simply isn't worth the squeeze in those cases anymore”: damage caps, “ hidden victims. ,” and the declining interest in medical malpractice cases Res. Pap. 09-01 Am. Bar Found Chicago, IL: http://papers.ssrn.com/abstract=1357092
    [Google Scholar]
  46. Matsa DA. 2007. Does malpractice liability keep the doctor away? Evidence from tort reform damage caps. J. Leg. Stud. 36:Suppl. 2S143–82
    [Google Scholar]
  47. Mello MM. 2006. Medical malpractice: impact of the crisis and effect of state tort reforms Res. Synth. Rep. 10, Robert Wood Johnson Found Princeton, NJ: http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2006/rwjf11941/subassets/rwjf11941_1
  48. Mello MM, Chandra A, Gawande AA, Studdert DM 2010. National costs of the medical liability system. Health Aff 29:91569–77
    [Google Scholar]
  49. Mello MM, Studdert DM, Schumi J, Brennan TA, Sage WM 2007. Changes in physician supply and scope of practice during a malpractice crisis: evidence from Pennsylvania. Health Aff 26:Suppl. 2w425–35
    [Google Scholar]
  50. Moghtaderi A, Farmer S, Black B 2019. Damage caps and defensive medicine: reexamination with patient-level data. J. Empir. Leg. Stud. 16:126–68
    [Google Scholar]
  51. Moore J, Bismark M, Mello MM 2017. Patients’ experiences with communication-and-resolution programs after medical injury. JAMA Intern. Med. 177:111595–603
    [Google Scholar]
  52. Nelson LJ, Morrisey MA, Kilgore ML 2007. Damages caps in medical malpractice cases. Milbank Q 85:2259–86
    [Google Scholar]
  53. Paik M, Black BS, Hyman DA 2013a. The receding tide of medical malpractice litigation: part 1—national trends. J. Empir. Leg. Stud. 10:4612–38
    [Google Scholar]
  54. Paik M, Black B, Hyman DA 2013b. The receding tide of medical malpractice litigation: part 2—effect of damage caps. J. Empir. Leg. Stud. 10:4639–69
    [Google Scholar]
  55. Paik M, Black B, Hyman DA 2016. Damage caps and the labor supply of physicians: evidence from the third reform wave. Am. Law Econ. Rev. 18:2463–505
    [Google Scholar]
  56. Paik M, Black BS, Hyman DA 2017. Do doctors practice defensive medicine, revisited. J. Health Econ. 51:84–97
    [Google Scholar]
  57. Pauly MV. 2006. Who pays when malpractice premiums rise?. Medical Malpractice and the U.S. Health Care System WM Sage, R Kersh 71–83 Cambridge, UK: Cambridge Univ. Press
    [Google Scholar]
  58. Pauly M, Thompson C, Abbott T, Margolis J, Sage W 2006. Who pays? The incidence of high malpractice premiums. Forum Health Econ. Policy 9:11–19
    [Google Scholar]
  59. Pesko MF, Cea M, Mendelsohn J, Bishop TF 2017. The effects of malpractice non-economic damage caps on the supply of physician labor: heterogeneity by physician age and risk. Int. Rev. Law Econ. 50:7–14
    [Google Scholar]
  60. Rahmati M, Hyman DA, Black B, Liu J, Silver C 2018. Screening plaintiffs and selecting defendants in medical malpractice litigation: evidence from Illinois and Indiana. J. Empir. Leg. Stud. 15:141–79
    [Google Scholar]
  61. Rahmati M, Hyman DA, Black B, Silver C 2016. Insurance crisis or liability crisis? Medical malpractice claiming in Illinois, 1980–2010. J. Empir. Leg. Stud. 13:2183–204
    [Google Scholar]
  62. Saks MJ. 1992. Do we really know anything about the behavior of the tort litigation system? And why not. Univ. Pa. Law Rev. 140:41147–292
    [Google Scholar]
  63. Sharkey CM. 2005. Unintended consequences of medical malpractice damages caps. NYU Law Rev 80:391–512
    [Google Scholar]
  64. Shepherd J. 2014. Uncovering the silent victims of the American medical liability system. Vanderbilt Law Rev 67:1151–96
    [Google Scholar]
  65. Sloan FA, Mathews CA, Conover CJ, Sage WM 2005. Public medical malpractice insurance: an analysis of state-operated patient compensation funds. DePaul Law Rev 54:2247–76
    [Google Scholar]
  66. Sloan FA, Mergenhagen PM, Bovbjerg RR 1989a. Effects of tort reforms on the value of closed medical malpractice claims: a microanalysis. J. Health Politics Policy Law 14:4663–89
    [Google Scholar]
  67. Sloan FA, Mergenhagen P, Burfield B, Bovbjerg RR, Hassan M 1989b. Medical malpractice experience of physicians: Predictable or haphazard. JAMA 262:3291–97
    [Google Scholar]
  68. Sloan FA, Shadle JH. 2009. Is there empirical evidence for ‘defensive medicine’? A reassessment. J. Health Econ. 28:2481–91
    [Google Scholar]
  69. Struve CT. 2003. Expertise in medical malpractice litigation: special courts, screening panels, and other options. The Project on Medical Liability in Pennsylvania. Rep., Pew Res. Proj Washington, DC: http://www.pewtrusts.org/en/research-and-analysis/reports/2003/10/20/expertise-in-medical-malpractice-litigation-special-courts-screening-panels-and-other-options
  70. Studdert DM, Melio MM, Gawande AA, Brennan TA, Wang YC 2007. Disclosure of medical injury to patients: an improbable risk management strategy. Health Aff 26:1215–26
    [Google Scholar]
  71. Studdert DM, Mello MM, Gawande AA, Gandhi TK, Kachalia A et al. 2006. Claims, errors, and compensation payments in medical malpractice litigation. New Engl. J. Med. 354:192024–33
    [Google Scholar]
  72. Thurston NK. 2001. Physician market power—evidence from the allocation of malpractice premiums. Econ. Inq. 39:3487–98
    [Google Scholar]
  73. US Dep. Health Hum. Serv., Health Resour. Serv. Adm., Bur. Health Prof., Div. Pract. Data Bank 2014. National Practitioner Data Bank 2012 Annual Report Washington, DC: US Dep. Health Hum. Serv https://www.npdb.hrsa.gov/resources/2012annualReport/coverPage.jsp
  74. Van Hoy J. 1999. Markets and contingency: how client markets influence the work of plaintiffs’ personal injury lawyers. Int. J. Leg. Prof. 6:3345–66
    [Google Scholar]
  75. Vidmar N, Lee P, MacKillop K, McCarthy K, McGwin G 2005. Uncovering the invisible profile of medical malpractice litigation: insights from Florida. DePaul Law Rev 54:315–56
    [Google Scholar]
  76. Viscusi WK, Born PH. 2005. Damages caps, insurability, and the performance of medical malpractice insurance. J. Risk Insur. 72:123–43
    [Google Scholar]
  77. Waters TM, Budetti PP, Claxton G, Lundy JP 2007. Impact of state tort reforms on physician malpractice payments. Health Aff 26:2500–9
    [Google Scholar]
  78. Weiler PC. 1991. Medical Malpractice on Trial Cambridge, MA: Harvard Univ. Press
  79. Weiler PC, Hiatt H, Newhouse JP, Johnson WG, Brennan T, Leape L 1993. A Measure of Malpractice: Medical Injury, Malpractice Litigation, and Patient Compensation Cambridge, MA: Harvard Univ. Press, 1st ed..
  80. White FJ, Pettiette LW, Wiggins RB, Kiss A 2008. Medical malpractice review panels and medical liability system cost, timeliness, and efficiency: a cross-sectional study. J. Empir. Leg. Stud. 5:2375–405
    [Google Scholar]
  81. Yang YT, Studdert DM, Subramanian SV, Mello MM 2008. A longitudinal analysis of the impact of liability pressure on the supply of obstetrician-gynecologists. J. Empir. Leg. Stud. 5:121–53
    [Google Scholar]
  82. Yoon A. 2004. Mandatory arbitration and civil litigation: an empirical study of medical malpractice litigation in the west. Am. Law Econ. Rev. 6:195–134
    [Google Scholar]
  83. Yu H, Greenberg M, Haviland A 2017. The impact of state medical malpractice reform on individual-level health care expenditures. Health Serv. Res. 52:62018–37
    [Google Scholar]
  84. Zeiler K, Hardcastle L. 2013. Do damages caps reduce medical malpractice insurance premiums? A systematic review of estimates and the methods used to produce them. Research Handbook on the Economics of Torts JH Arlen 551–87 Cheltenham, UK: Edward Elgar Publ.
    [Google Scholar]
  85. Zeiler K, Silver C, Black B, Hyman DA, Sage WM 2007. Physicians’ insurance limits and malpractice payments: evidence from Texas closed claims, 1990–2003. J. Leg. Stud. 36:2S9–45
    [Google Scholar]
  86. Zuckerman S, Bovbjerg RR, Sloan FA 1990. Effects of tort reforms and other factors on medical malpractice insurance premiums. Inquiry 27:2167–82
    [Google Scholar]
/content/journals/10.1146/annurev-lawsocsci-060120-093911
Loading
/content/journals/10.1146/annurev-lawsocsci-060120-093911
Loading

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error