Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002
Bernard S. Black
Northwestern University - Pritzker School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)
University of Texas at Austin - School of Law
David A. Hyman
University of Illinois College of Law
William M. Sage
University of Texas at Austin School of Law; University of Texas at Austin - Dell Medical School
as published in 2 Journal of Empirical Legal Studies, pp. 207-259 (2005)
Columbia Law and Economics Working Paper No. 287
U Illinois Law & Economics Research Paper No. LE05-002
U of Texas law, Law and Econ Research Paper No. 030
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.
Number of Pages in PDF File: 54
Date posted: October 25, 2005 ; Last revised: January 28, 2015