Black, Silver, Hyman, and Sage on the Medical Malpractice “Crisis”
BERNARD S. BLACK (University of Texas at Austin – School of Law; University of Texas at Austin – Red McCombs School of Business), CHARLES SILVER (University of Texas Law School), DAVID A. HYMAN (University of Illinois College of Law), and WILLIAM M. SAGE (Columbia Law School) have posted Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002 on SSRN. Here is the abstract:
- 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 frequency, payment amounts, defense costs, and jury verdicts. The data present a picture of remarkable stability in most respects and slow, predictable change in others. We find no evidence of the medical malpractice crisis that produced headlines over the last several years and led to legal reform in Texas and other states. The rapid changes in insurance premiums that sparked the crisis appear to reflect insurance market dynamics, largely disconnected from claim outcomes.
Controlling for population growth, the number of large paid claims (over $25,000 in real 1988 dollars) was roughly constant from 1991-2002. Controlling for the quantity of health care delivered (based either on real health care spending or number of physicians), the frequency of large paid claims declined over this period. The number of small paid claims declined sharply. Payout per claim on large claims was constant over 1988-2002, while jury awards were constant or even declined. Real defense costs rose at 4.4% per year, and produced an average 1% annual increase in the real total cost to insurers per large paid claim. Jury verdicts showed no significant trend.
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