The Receding Tide of Medical Malpractice Litigation

Abstract:     
The U.S. has experienced three medical malpractice (“med mal”) crises in the past forty years. In response, thirty-one states now have caps on non-economic or total damages. Researchers have studied the impact of these caps, relative to control states without caps, but have not studied either trends in no-cap states or overall national trends. Using national data on paid medical malpractice claims against physicians, we find that the rate of paid claims per physician has been dropping steadily for 20 years, and is less than half the 1992 level. Payouts per physician have been dropping since 2003, and are now 48% below their 1992 level. The decline in claims and payouts is somewhat larger in the 11 states that adopt damage caps during our sample period, but there are large declines in all no-cap states. We identify factors that contribute to these trends, in part by using quantile regressions to study changes in the distribution of payouts (prior studies study only changes in means). We also report the first clear evidence that damage caps reduce both claim rates and payout per claim, and thus strongly reduce payout per physician. In contrast, other med mal reforms have no significant impact on either claim rates or payout per claim.

Number of Pages in PDF File: 46

Keywords: medical malpractice, tort reform, damage caps

JEL Classification: I18, K23, K32

working papers series