The Effects of Tort Reform on Medical Malpractice Insurers' Ultimate Losses

Abstract

Whereas the literature evaluating the effect of tort reforms has focused on reported incurred losses, this paper examines the long run effects using a comprehensive sample by state of individual firms writing medical malpractice insurance from 1984-2003. The long run effects of reforms are greater than insurers' expected effects, as five year developed losses and ten year developed losses are below the initially reported incurred losses for those years following reform measures. The quantile regressions show the greatest effects of joint and several liability limits, noneconomic damages caps, and punitive damages reforms for the firms that are at the high end of the loss distribution. These quantile regression results show stronger, more concentrated effects of the reforms than do the OLS and fixed effects estimates for the entire sample.

Beyond Physicians: The Effect of Licensing and Liability Laws on the Supply of Nurse Practitioners and Physician Assistants

“…Enacting a noneconomic damages cap should increase the supply of NPs and PAs. Though much of the existing evidence on the effect of noneconomic damages caps is specific to physicians (e.g., Lieber ), some evidence suggests that damages caps reduce malpractice risk generally (Born et al ). The reduction in malpractice risk may therefore make states with these reforms more desirable locations to practice for NPs and PAs (see Matsa ; Lieber ).…”

Broadening the Scope of Nursing Practice

“…800,801 Another newer, strong study looked at long-run MM insurance losses as a function of several sorts of tort interventions, and found that non-economic damage caps were associated with reduced long-run term losses for some, but not all, insurers . 802 Notably, one recent study examined the direct relationship between MM damage caps and a measure of aggregate health care expenditures . Hellinger and Encinosa looked at the association between state non-economic damage caps and per capita state-level health care expenditures between 1984 and 1998 .…”

Evaluating the Medical Malpractice System and Options for Reform

“…Other important indirect reforms impose mandatory periodic payments, which require damages in certain cases to be disbursed in the form of an annuity that pays out over time and limits on the contingent fees that plaintiffs’ attorneys can charge. Examples of studies that have estimated the effects of reforms on malpractice pressure include Danzon (1982, 1986); Sloan, Mergenhagen, and Bovbjerg (1989); Thorpe (2004); Avraham (2007);2 and Born, Viscusi, and Baker (2009).…”