Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002

Abstract

Using a comprehensive database of closed claims maintained by the Texas Department of Insurance since 1988, this study provides evidence on a range of issues involving medical malpractice litigation, including claim frequency, payout frequency, payment amounts, defense costs, and jury verdicts. The data present a picture of stability in most respects and moderate change in others. We do not find evidence in claim outcomes of the medical malpractice insurance crisis that produced headlines over the last several years and led to legal reform in Texas and other states. Controlling for population growth, the number of large paid claims (over $25,000 in real 1988 dollars) was roughly constant from 1990-2002. The number of smaller paid claims declined. Controlling for inflation, payout per large paid claim increased over 1988-2002 by an estimated 0.1 percent (insignificant) to 0.5 percent (marginally significant) per year, depending on the data set we use. Jury awards increased by an estimated 2.5 percent (insignificant) to 3.6 percent (marginally significant) per year, depending on the data set, but actual payouts in tried cases showed little or no time trend. Real defense costs per large paid claim rose by 4.2-4.5 percent per year. Real total cost per large paid claim, including defense costs, rose by 0.8-1.2 percent per year.In this article, we examine 15 years of closed medical malpractice claim reports gathered by the Texas Department of Insurance (TDI). Texas is the second most populous state in the country and was among those identified by the American Medical Association as being caught in the recent malpractice insurance crisis. 3 Texas began collecting closed-claim reports after the prior insurance crisis in the 1980s. The Texas Closed Claim Database (TCCD) provides detailed information about payments, defendants, trial outcomes, defense costs, and other matters. 4 The TCCD allows us to assess changes over time in the number and cost of malpractice claims. We find that malpractice claims and payments were stable over the period for which we have data. More specifically (unless otherwise noted, all dollar values in this article are in real 1988 dollars):• Adjusted for population growth, the total number of closed claims, the number of "large" paid claims (payouts of at least $25,000 in 1988 dollars), and the percentage of claims that produced large payouts were stable over 1990-2002. Adjusted for number of physicians or growth in real health-care spending (which proxy for the intensity with which people use the health-care system), the total number of paid claims and the number of large paid claims declined. 5• The number of smaller paid claims (less than $25,000 in 1988 dollars) declined sharply.

Malpractice Risk Among US Pediatricians

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Non-Economic Damages in Medical Malpractice Appeals: Does the Jurisdiction Make a Difference?

“…is that there is no evidence of any skyrocketing compensation awards in medical malpractice cases (Black et al (2005), Vidmar et al (2005), Fenn et al (2000)); when plaintiffs go to court or appeal, the probability of compensation is generally lower but in the event of compensation being awarded, awards tend to be higher (Studdert and Mello (2007), Danzon (1985), Sloan and Hsieh (1990)); compensation amounts tend to increase with injury levels up to permanent grave injury (cases involving death usually receive lower payouts than these cases) (Sloan and Hsieh (1990), Vidmar et al (2005)). When it comes to the claim that the quantification of damages is random, the results are not always clear.…”

Defensive Medicine, Cost Containment, and Reform

“…Physicians concerned about rising insurance premiums may tend to blame plaintiffs, lawyers and juries rather than the exigencies of the underwriting cycle. The cause of periodic malpractice "crises," marked by sudden increases in malpractice insurance premiums, has been thoroughly studied, however, and is almost always due to cyclic changes in the insurance market 19,20 . Crises rarely occur because of significant increases in either the number of successful tort suits or the magnitude of jury awards 19 .…”