An Economic Model of Costing ‘Early Offers’ Medical Malpractice Reform

The John M. Olin Program in Law and Economics Working Paper No. 10

New Mexico Law Review, Vol. 35, No. 2, 2005

58 Pages Posted: 27 Jul 2017

See all articles by Jeffrey O'Connell

Jeffrey O'Connell

University of Virginia School of Law

Jeremy Kidd

Mercer University - Walter F. George School of Law

Evan Stephenson

Wheeler Trigg O'Donnell LLP

Date Written: September 30, 2003

Abstract

Today the key to the unworkability of tort liability as applied to personal injury is the complexity of the insured event. Tort liability insurance calls for payment of economic and noneconomic (i.e., mostly pain and suffering) damages in lawsuits based on fault. The determination of both fault and the value of pain and suffering is especially complex in medical malpractice litigation. Consequently, the liability insurance system is fraught for both sides with uncertainty that causes long delays and huge costs, including huge transaction costs. The result is not an insurance system for promptly paying needy injury victims, but an insurance system for prolonged and hugely expensive fighting about payments to both deserving and undeserving claimants — to the great detriment of both patients and health care providers.

Suggested Citation

O'Connell, Jeffrey and Kidd, Jeremy and Stephenson, Evan, An Economic Model of Costing ‘Early Offers’ Medical Malpractice Reform (September 30, 2003). The John M. Olin Program in Law and Economics Working Paper No. 10; New Mexico Law Review, Vol. 35, No. 2, 2005. Available at SSRN: https://ssrn.com/abstract=2877923 or http://dx.doi.org/10.2139/ssrn.2877923

Jeffrey O'Connell (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
804-924-7809 (Phone)
804-924-7536 (Fax)

Jeremy Kidd

Mercer University - Walter F. George School of Law ( email )

1021 Georgia Ave
Macon, GA 31207-0001
United States

Evan Stephenson

Wheeler Trigg O'Donnell LLP ( email )

1801 California Street
Suite 3600
Denver, CO 80203
United States

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