This important new study--which has already been featured in The New York Times and The Washington Post in the last two days--ought to set the terms of the debate about so-called "tort reform" if facts are to have any bearing on the policy decisions. The authors--my colleagues Bernard Black and Charles Silver, Illinois law professor David Hyman, and Columbia law professor Bill Sage--include three of the leading scholars nationally in the health law field, and they hold well-known views across the political spectrum (though tilting, overall, to the right). What they found in studying malpractice claims in Texas over a 15-year period is stunning:
Recent spikes in medical malpractice premiums in Texas were not caused by rising payouts on claims or rising jury verdicts, according to a study released today by the Center on Lawyers, Civil Justice, and the Media at The University of Texas at Austin School of Law....
Using a unique, comprehensive dataset maintained by the Texas Department of Insurance that includes all insured closed medical malpractice claims for 1988-2002, the authors found that, adjusted for general inflation and population, claim rates, payments, total costs, and jury verdicts were all stable. Only defense costs rose significantly, at just over 4% per year. Their findings, with these adjustments, are as follows.
- The number of large paid claims (>$25,000 in 1988 dollars) per year was roughly constant. The number of small paid claims (<$25,000 in 1988 dollars) declined sharply.
- Mean and median payouts per large paid claim were $528,000 and $200,000, respectively, in 2002 and were roughly constant over time.
- Roughly 6% of large paid claims involved payouts over $1 million, with little time trend in this percentage.
- In 2000-2002, there was an average of 4.6 paid claims per 100 practicing Texas physicians per year, down from 6.4 paid claims per 100 practicing physicians per year in 1990-1992.
- The total number of closed claim files averaged 25 per 100 practicing Texas physicians per year in 2000-2002. Of these, about 80% involved no payout.
- In 2002, payouts to patients were about $515 million, while Texas health care spending was about $93 billion, so payouts on insured claims equaled 0.6% of health care spending.
- Mean and median jury verdicts in trials won by patients were $889,951 and $300,593, respectively, in 2002 and showed no significant time trend.
- The sum of payouts and defense cost rose by about 1% per year. Defense costs, which grew 4.4% annually, drove this increase.
The article will be published in the Journal of Empirical Legal Studies.
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