Monday, February 6, 2006

Empirical Studies of Med Mal Damage Caps

[RESEARCH] Some advocates of medical malpractice reform urge the adoption of caps on non-economic damages. A couple of recent studies explore the effect.

In a study of jury verdicts in 22 states (using data from the National Center for State Courts), Catherine M. Sharkey found a "crossover effect" -- when non-economic damages were capped, plaintiffs argued for and juries awarded greater economic damages. She found the caps had no statistically significant effect. Catherine M. Sharkey, Unintended Consequences of Medical Malpractice Damages Caps, 80 N.Y.U. L. Rev. 391 (2005).

Sharkey's research was featured at AALS in a panel called "Showcase for Exemplary Empirical Projects." Earlier, the Section on Law and Economics sponsored a panel called "Empirical Approaches to Inquiries in Health Care Law." I only caught part of it, but got a sense of how incredibly complex the issues are. (Of course, Sharkey's article explores the complexities too.)

One of the panelists was Jonathan Klick from Florida State. See Jonathan Klick & Thomas Stratmann, Does Medical Malpractice Reform Help States Retain Physicians and Does it Matter? (Dec. 15, 2005). Their abstract:

Many states have passed medical malpractice law reforms in an effort to retain and attract physicians. However, it is unclear what the net public health effect of such reforms is. While reforms are likely to help states retain doctors, they also diminish incentives to provide a high level of health care. We provide empirical evidence that some malpractice reforms have helped states retain doctors while others have not. However, retention of doctors comes at a cost. We show that some malpractice law reforms have lowered the level of care provided, as indicated by an increase in infant mortality. This suggests that some of the tort reforms lead to worsening health outcomes.
Another speaker in the Health Care panel was Ronen Avraham from Northwestern University School of Law. See his draft paper (with co-author David C. Lee), An Empirical Study of the Impact of Tort Reforms on Medical Malpractice Payments. Their conclusion? Here's the abstract:
This study determines the statistical impact of six types of tort reform on the frequency, size, and total annual settlements in medical malpractice over seven years between 1991-1998. Regressions are performed on the National Practitioner Data Bank, a panel data which contains over 200,000 complete malpractice payment records over the years. Of the six tort reforms we examined, only one reform, caps on pain-and-suffering damages was effective, three types of reform had were counter-effective, and two reforms had no statistically significant effect on the total annual payments. These mixed, sometimes counter-intuitive results have significant implications for lawmakers dealing with the contentious issue of medical malpractice.
See also Ronen's recent article in which he proposes a law and economics approach to pricing pain and suffering. Avraham Ronen, Putting a Price on Pain-and-Suffering Damages: A Critique of the Current Approaches and a Preliminary Proposal for Change, 100 NW. U.L. Rev. 87 (2006).

The third speaker was Albert Yoon (Northwestern), who recently studied the effect of Nevada's mandatory arbitration in med mal cases, comparing results with those in neighboring states. Albert Yoon, Mandatory Arbitration and Civil Litigation: An Empirical Study of Medical Malpractice Litigation in the West, 6 Am. L. & Econ. Rev. 95 (2004). He found that Nevada's decreases in damage awards, attorney's fees, and length of litigation were part of a broader trend. Arbitration reduced the likelihood of claims going to trial.

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