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Medical Malpractice Damage Caps: What Impact Do They Have?

The University of Chicago Journal of Legal Studies published an interesting article on medical malpractice tort reform. Current Research on Medical Malpractice Liability: Medical Malpractice Reform and Physicians in High-Risk Specialties, 36 J. Legal Stud. 121 (2007). The article supports the plaintiff’s view of medical malpractice tort reform… with a very notable exception.

The article concludes that introduction of medical malpractice reform in response to the fear of losing doctors may be misguided because the “relationship between medical malpractice reform and physician labor supply suggest that the effects are modest.” The article suggests that many doctors are likely to be indifferent to medical malpractice reform “because their likelihood of being sued is low.”
Interestingly, the article references one study by Eric Helland and Mark Showalter titled, “The Impact of Liability on the Physician Labor Market,” which indicated that medical malpractice damage caps induce physicians to work more hours in a year.

Helland and Showalter found that medical malpractice reforms did not increase the supply of doctors in some underserved communities (a topic of two Maryland Injury Lawyer Blog posts back in March). But the article points out that other tudies have disagreed with this assessment.

In fact, because the purpose of this blog is not simply to point out every fact that plays to medical malpractice lawyers’ views of tort reform, it is worth noting one finding that, if borne out by other studies, is significant. The article found that, although the results are not entirely clear, non-economic medical malpractice damage caps appeared to improve the black infant mortality rate by 6%.

There is nothing insignificant about such a finding. But, as the article points out, it may be that the correlation is the result of endogeneity. In other words, the passage of medical malpractice reforms may be related to unobserved factors that also correlate with the size of the physician workforce. (This is why I have never liked the malpractice lawyers’ argument that medical malpractice damage caps do not lower malpractice insurance rates because, all things being equal, I’m sure they do even if the data does not show it.)

The latter theory is my theory that the study is not looking at “all things being equal” and there are other factors at play. I base this on my review of the totality of the studies on this and my own common sense. Moreover, the larger question is whether it is a zero sum game. If infant mortality goes down in one state but goes up in another, what has been accomplished? Still, only a fool or someone with an incredibly closed mind looks at a study that sees an improvement in infant mortality and just shrugs their shoulders.

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  • mark

    Ron what is it like now in maryland for med mal?