Insurance Crisis or Liability Crisis? Medical Malpractice Claiming in Illinois, 1980-2010

24 Pages Posted: 23 Jul 2014 Last revised: 28 May 2016

See all articles by Mohammad Hossein Rahmati

Mohammad Hossein Rahmati

Sharif University of Technology

David A. Hyman

Georgetown University Law Center

Bernard S. Black

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

Charles Silver

University of Texas at Austin - School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: August 4, 2015

Abstract

Since 1980, Illinois has experienced three med mal insurance crises – in the mid-1980s, mid-1990s, and early-2000s. Each time, Illinois responded by enacting tort reform. Using a previously unavailable database of closed medical malpractice (“med mal”) claims, maintained by the Illinois Department of Insurance, we analyze statewide trends in med mal claiming from 1980-2010, covering all three crises. Paid claim rates rose sharply from 1980-1985, roughly leveled off from 1986-1993, and then began a sustained decline. By 2010, paid claims rates were 75% lower than in the peak year (1991). Payout per claim has steadily increased since 1980, but these increases can be entirely explained by the virtual disappearance of smaller paid claims and claims involving less severe injuries. The total direct cost of med mal litigation (payouts and defense costs) rose sharply from 1980-1992, with a jump in 1991 and then declined steadily, with a more modest jump during 2000-2002, which persists through 2006. Thus, of the three Illinois insurance crises, only the first coincided in time with a major change in claiming. Rather than becoming more generous over time, Illinois’ med mal system has squeezed out claimants with less severe injuries and smaller claims.

Keywords: medical malpractice, closed claims, tort reform, malpractice crisis

Suggested Citation

Rahmati, Mohammad Hossein and Hyman, David A. and Black, Bernard S. and Silver, Charles M., Insurance Crisis or Liability Crisis? Medical Malpractice Claiming in Illinois, 1980-2010 (August 4, 2015). Northwestern Law & Econ Research Paper No. 13-29; U of Texas Law, Law and Econ Research Paper No. E524; Illinois Program in Law, Behavior and Social Science Paper No. LBSS 14-12. Available at SSRN: https://ssrn.com/abstract=2462942 or http://dx.doi.org/10.2139/ssrn.2462942

Mohammad Hossein Rahmati

Sharif University of Technology ( email )

Graduate School of Business and Economics
Sharif University of Technology
Tehran
Iran
+98-21-6604-9195 (Phone)

HOME PAGE: http://gsme.sharif.edu/~rahmati/

David A. Hyman (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Bernard S. Black

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

Charles M. Silver

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1337 (Phone)
512-232-1372 (Fax)

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