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

46 Pages Posted: 4 Feb 2019 Last revised: 3 Mar 2020

Date Written: March 1, 2020

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. We also provide evidence that the decline in patient safety is unlikely to be driven by patient selection.

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 (March 1, 2020). 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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1,216
Abstract Views
10,163
rank
17,795
PlumX Metrics