Abstract

http://ssrn.com/abstract=2285230
 


 



The Receding Tide of Medical Malpractice Litigation Part 2: Effect of Damage Caps


Myungho Paik


Northwestern University - School of Law

Bernard S. Black


Northwestern University - School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)

David A. Hyman


University of Illinois College of Law

July 15, 2013

10 Journal of Empirical Legal Studies (2013), Forthcoming
Northwestern Law & Econ Research Paper No. 13-24
Illinois Program in Law, Behavior and Social Science Paper No. LBSS14-02
Illinois Public Law Research Paper No. 13-56

Abstract:     
We study the effect of damage caps adopted in the 1990s and 2000s on medical malpractice claim rates and payouts. Prior studies found some evidence that caps reduce payout/claim, but mixed and weak evidence on whether caps reduce paid claim rates and payout per physician. However, most prior studies do not allow for the gradual phase-in of damage caps, which usually apply only to lawsuits filed after the reform’s effective date, or only to injuries after the effective date. Once we allow for phase-in, we find strong evidence that damage caps reduce both claim rates and payout per claim, with a large combined impact on payout per physician. The drop in claim rates is concentrated in claims with larger payouts – the ones that would be most affected by a damages cap. Stricter caps have larger effects. Some prior studies also find a large impact of tort reforms other than damage caps. Once we allow for phase-in, we find that these other reforms have no significant impact on either claim rates or payout per claim.

A companion article, The Receding Medical Malpractice Part 1: National Trends, is available at http://ssrn.com/abstract=2109679.

Number of Pages in PDF File: 36

Keywords: medical malpractice, damage caps

JEL Classification: I18, K23, K32

Accepted Paper Series


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Date posted: July 10, 2013 ; Last revised: August 15, 2013

Suggested Citation

Paik, Myungho and Black, Bernard S. and Hyman, David A., The Receding Tide of Medical Malpractice Litigation Part 2: Effect of Damage Caps (July 15, 2013). 10 Journal of Empirical Legal Studies (2013), Forthcoming; Northwestern Law & Econ Research Paper No. 13-24; Illinois Program in Law, Behavior and Social Science Paper No. LBSS14-02; Illinois Public Law Research Paper No. 13-56. Available at SSRN: http://ssrn.com/abstract=2285230

Contact Information

Myungho Paik
Northwestern University - School of Law ( email )
375 E. Chicago Ave
Unit 1505
Chicago, IL 60611
United States
312-503-7029 (Phone)
312-503-5950 (Fax)

Bernard S. Black (Contact Author)
Northwestern University - School of Law ( email )
375 E. Chicago Ave
Unit 1505
Chicago, IL 60611
United States
512-503-2784 (Phone)

Northwestern University - Kellogg School of Management
2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)
European Corporate Governance Institute (ECGI)
Brussels
Belgium
David A. Hyman
University of Illinois College of Law ( email )
504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
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