The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform

42 Pages Posted: 4 Feb 2019

Date Written: January 21, 2019

Abstract

Appendix is available at: https://ssrn.com/abstract=3319933

We examine whether caps on non-economic damages in medical malpractice cases affect in-hospital patient safety. We use Patient Safety Indicators (PSIs) — measures of adverse events — as proxies for safety. In difference-in-differences (DiD) analyses of five states that adopt caps during 2003-2005, we find that patient safety gradually worsens after cap adoption, relative to control states. Standard DiD inference can be unreliable with a small number of treated units. We therefore develop a randomization inference-based test for DiD statistical inference with few treated units but multiple, potentially correlated outcomes, and confirm statistical strength with this nonparametric approach.

Keywords: medical malpractice, torts, healthcare quality, patient safety

JEL Classification: I13, I18, K13

Suggested Citation

Zabinski, Zenon and Black, Bernard S., The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform (January 21, 2019). Northwestern Law & Econ Research Paper No. 13-09. Available at SSRN: https://ssrn.com/abstract=2161362 or http://dx.doi.org/10.2139/ssrn.2161362

Zenon Zabinski

Bates White ( email )

1300 I Street NW
Washington, DC 20005
United States

Bernard S. Black (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (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

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