An Empirical Study of the Impact of Tort Reforms on Medical Malpractice Settlement Payments

Abstract

This paper evaluates the impact of six different types of tort reforms on the frequency, size, and number of total annual settlements in medical malpractice cases between 1991 and 1998. Medical malpractice data come from the National Practitioner Data Bank, which contains more than 100,000 malpractice settlement payments in the study time frame. Of the six tort reforms examined, two reforms (caps on pain and suffering damages and limitations on joint and several liability) reduced the number of annual payments, and two reforms (caps on pain and suffering damages and the periodic-payment reform) reduced average awards. Caps on noneconomic damages had an effect on total annual payments, although the statistical significance of that effect was weak. The joint effect of enacting all six reforms was statistically significant for reducing the number of cases but not the state-level average award or total payments. (c) 2007 by The University of Chicago. All rights reserved..

Tort Reform and Innovation

“…Each patent is classified by the USPTO using 3-digit technology classes, and we exploit this detailed classification system to identify medical instrument patents. 6 We also obtain data on the gross product, the population and the number of physicians in a state. 7 USPTO patents offer a unique source of data for large-scale studies on innovation.…”

The role of party politics in medical malpractice tort reforms

“…For example, Avraham (2007) investigates the impact of six different types of tort reforms on the frequency, size and number of total settlements in medical malpractice cases between 1991 and 1998. He shows that caps on pain and suffering damages and limitations on joint and several liability reduced the number of annual damage payments, while the periodic-payment reform and, again, caps on pain and suffering damages reduced average awards.…”

Accounting for Anticipation Effects: An Application to Medical Malpractice Tort Reform

“…Given that 98.8% of total malpractice awards are covered by liability insurance (Zeiler, Silver, Black, Hyman, and Sage 2007), this implies that punitives are a disproportionate source of risk to doctors, perhaps more than 83% (= 6%/(6% + 1.2%)) of all financial risk they bear from medical malpractice liability. It is not surprising, therefore, that a number of papers that examine medical malpractice tort reform have found a significant effect of punitive damages on physician behavior (e.g., Avraham 2007, Avraham, Dafny, and Schanzenbach 2010, and Currie and MacLeod 2008.…”