Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002

Abstract:     
Using a comprehensive database of closed claims maintained by the Texas Department of Insurance since 1988, this study provides evidence on a range of issues involving medical malpractice litigation, including claim frequency, payout amounts, defense costs, and jury verdicts. The data present a picture of stability in most aspects and moderate change in others. We do not find evidence in claim outcomes of the medical malpractice insurance crisis that produced headlines over the last several years and led to legal reform in Texas and other states. Controlling for population growth, the number of large paid claims (over $25,000 in real 1988 dollars) was roughly constant from 1990-2002. The number of smaller paid claims declined. Controlling for inflation, payout per large paid claim increased over 1988-2002 by an estimated 0.1 percent insignificant) - 0.5 percent (marginally significant) per year, depending on the data set, but actual payouts in tried cases showed little or no time trend. Real defense costs per large paid claim rose by 4.2-4.5 percent per year. Real total cost per large paid claim, including defense costs, rose by 0.8-1.2 percent per year.

The prior working paper version of this paper is available at http://ssrn.com/abstract=678601. The working paper version contains color figures, which were converted to black and white in the published version.

Accepted Paper Series