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An Empirical Study of the Impact of Tort Reforms on Medical Malpractice Settlement Payments

  • Ronen Avraham
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    This paper evaluates the impact of six different types of tort reforms on the frequency, size, and number of total annual settlements in medical malpractice cases between 1991 and 1998. Medical malpractice data come from the National Practitioner Data Bank, which contains more than 100,000 malpractice settlement payments in the study time frame. Of the six tort reforms examined, two reforms (caps on pain and suffering damages and limitations on joint and several liability) reduced the number of annual payments, and two reforms (caps on pain and suffering damages and the periodic-payment reform) reduced average awards. Caps on noneconomic damages had an effect on total annual payments, although the statistical significance of that effect was weak. The joint effect of enacting all six reforms was statistically significant for reducing the number of cases but not the state-level average award or total payments. (c) 2007 by The University of Chicago. All rights reserved.

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    File URL: http://dx.doi.org/10.1086/527332
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    Article provided by University of Chicago Press in its journal The Journal of Legal Studies.

    Volume (Year): 36 (2007)
    Issue (Month): S2 (06)
    Pages: S183-S229

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    Handle: RePEc:ucp:jlstud:v:36:y:2007:i:s2:p:s183-s229
    Contact details of provider: Web page: http://www.journals.uchicago.edu/JLS/

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    1. W. Kip Viscusi & Patricia H. Born, 2005. "Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(1), pages 23-43.
    2. Viscusi, W. Kip & Zeckhauser, Richard J. & Born, Patricia & Blackmon, Glenn, 1993. "The Effect of 1980s Tort Reform Legislation on General Liability and Medical Malpractice Insurance," Journal of Risk and Uncertainty, Springer, vol. 6(2), pages 165-86, April.
    3. Danzon, Patricia, 1984. "The Frequency and Severity of Medical Malpractice Claims," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 115-48, April.
    4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
    5. Browne, Mark J & Puelz, Robert, 1999. "The Effect of Legal Rules on the Value of Economic and Non-economic Damages and the Decision to File," Journal of Risk and Uncertainty, Springer, vol. 18(2), pages 189-213, August.
    6. Babcock, Linda & Pogarsky, Greg, 1999. "Damage Caps and Settlement: A Behavioral Approach," The Journal of Legal Studies, University of Chicago Press, vol. 28(2), pages 341-70, June.
    7. George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
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