Monday, July 29, 2013
Myungho Paik, Bernard S. Black, and David A. Hyman have posted on SSRN their recent article, "The Receding Tide of Medical Malpractice Litigation Part 2: Effect of Damage Caps," which is forthcoming in the Journal of Empirical Legal Studies.
study the effect of damage caps adopted in the 1990s and 2000s on
medical malpractice claim rates and payouts. Prior studies found some
evidence that caps reduce payout/claim, but mixed and weak evidence on
whether caps reduce paid claim rates and payout per physician. However,
most prior studies do not allow for the gradual phase-in of damage
caps, which usually apply only to lawsuits filed after the reform’s
effective date, or only to injuries after the effective date. Once we
allow for phase-in, we find strong evidence that damage caps reduce both
claim rates and payout per claim, with a large combined impact on
payout per physician. The drop in claim rates is concentrated in claims
with larger payouts – the ones that would be most affected by a damages
cap. Stricter caps have larger effects. Some prior studies also find a
large impact of tort reforms other than damage caps. Once we allow for
phase-in, we find that these other reforms have no significant impact
on either claim rates or payout per claim.
A companion article, The Receding Medical Malpractice Part 1: National Trends, is available at http://ssrn.com/abstract=2109679.