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Physicians' Insurance Limits and Malpractice Payments: Evidence from Texas Closed Claims, 1990-2003


  • Kathryn Zeiler
  • Charles Silver
  • Bernard Black
  • David A. Hyman
  • William M. Sage


Physicians' insuring practices influence their incentives to take care when treating patients, their risk of making out-of-pocket payments in malpractice cases, and the adequacy of compensation available to injured patients. Yet these practices and their effects have rarely been studied. Using Texas Department of Insurance data on 9,525 paid malpractice claims against physicians that closed in 1990-2003, we provide the first systematic evidence on levels of coverage purchased by physicians with paid liability claims and how those levels affect out-of-pocket payments and patient compensation. We find that these physicians carried much less insurance than is conventionally believed, that their real primary limits declined steadily over time, that policy limits often act as effective caps on recovery, and that personal contributions by physicians to close claims were rare. Our findings call into question a number of common assumptions about the relationship between physicians' insuring practices and the medical malpractice liability system. (c) 2007 by The University of Chicago. All rights reserved.

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  • Kathryn Zeiler & Charles Silver & Bernard Black & David A. Hyman & William M. Sage, 2007. "Physicians' Insurance Limits and Malpractice Payments: Evidence from Texas Closed Claims, 1990-2003," The Journal of Legal Studies, University of Chicago Press, vol. 36(S2), pages 9-45, June.
  • Handle: RePEc:ucp:jlstud:v:36:y:2007:i:s2:p:s9-s45

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    References listed on IDEAS

    1. Viscusi, W Kip & Born, Patricia, 1995. "Medical Malpractice Insurance in the Wake of Liability Reform," The Journal of Legal Studies, University of Chicago Press, vol. 24(2), pages 463-490, June.
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    Cited by:

    1. Panthöfer, S., 2016. "Do Doctors Prescribe Antibiotics Out of Fear of Malpractice?," Health, Econometrics and Data Group (HEDG) Working Papers 16/31, HEDG, c/o Department of Economics, University of York.
    2. Michael D. Frakes & Matthew B. Frank & Seth A. Seabury, 2017. "The Effect of Malpractice Law on Physician Supply: Evidence from Negligence-Standard Reforms," NBER Working Papers 23446, National Bureau of Economic Research, Inc.
    3. Felli, Leonardo & Koenen, Johannes & Stahl, Konrad O., 2011. "Competition and trust: Evidence from German car manufacturers," ZEW Discussion Papers 11-072, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Frakes, Michael & Jena, Anupam B., 2016. "Does medical malpractice law improve health care quality?," Journal of Public Economics, Elsevier, vol. 143(C), pages 142-158.
    5. Daniel Carvell & Janet Currie & W. Bentley MacLeod, 2012. "Accidental death and the rule of joint and several liability," RAND Journal of Economics, RAND Corporation, vol. 43(1), pages 51-77, March.
    6. Zhou, Jun, 2010. "Determinants of Noneconomic Damages in Medical Malpractice Settlements and Litigations: Evidence from Texas since 1988," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 348, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    7. Malani, Anup & Reif, Julian, 2015. "Interpreting pre-trends as anticipation: Impact on estimated treatment effects from tort reform," Journal of Public Economics, Elsevier, vol. 124(C), pages 1-17.

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