This study evaluates the impact of tort reform on private health insurance coverage using the Current Population Survey's March Demographic Files. Proponents of tort reform argue that reform will reduce medical malpractice insurance costs, damage awards, and costs associated with defensive medicine. If proponents are correct, these cost reductions should increase health insurance coverage. On the other hand, if the prior tort law was functioning well, reform may increase medical costs by reducing doctors' care-taking or increasing of the use of aggressive treatments. In this case, tort reform could actually decrease insurance coverage by raising healthcare costs. We evaluate the effect of eight common tort reforms on private health insurance coverage between 1981 and 2007. We find that damage caps, collateral source reform, and joint and several liability reform increased health insurance coverage for the most price-sensitive groups (the single-young and the self-employed) between one-half and one percentage point each. Accordingly, we conclude that tort reform may increase insurance coverage rates for price-sensitive groups, but its overall effect on coverage will be small.

We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce "defensive" healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.

We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce “defensive” healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.

"Drawing on an unusually rich trove of data, the authors have refuted more politically convenient myths in one book than most academics do in a lifetime." —Nicholas Bagley, professor of law, University of Michigan Law School "Synthesizing decades of their own and others’ research on medical liability, the authors unravel what we know and don’t know about our medical malpractice system, why neither patients nor doctors are being rightly served, and what economics can teach us about the path forward." —Anupam B. Jena, Harvard Medical School Over the past 50 years, the United States experienced three major medical malpractice crises, each marked by dramatic increases in the cost of malpractice liability insurance. These crises fostered a vigorous politicized debate about the causes of the premium spikes, and the impact on access to care and defensive medicine. State legislatures responded to the premium spikes by enacting damages caps on non-economic, punitive, or total damages and Congress has periodically debated the merits of a federal cap on damages. However, the intense political debate has been marked by a shortage of evidence, as well as misstatements and overclaiming. The public is confused about answers to some basic questions. What caused the premium spikes? What effect did tort reform actually have? Did tort reform reduce frivolous litigation? Did tort reform actually improve access to health care or reduce defensive medicine? Both sides in the debate have strong opinions about these matters, but their positions are mostly talking points or are based on anecdotes. Medical Malpractice Litigation provides factual answers to these and other questions about the performance of the med mal system. The authors, all experts in the field and from across the political spectrum, provide an accessible, fact-based response to the questions ordinary Americans and policymakers have about the performance of the med mal litigation system.

This report offers a framework for assessing the effects of tort reforms. It attempts to provide a coherent structure for systematically thinking about how research can contribute to the policy debate over tort reform. It identifies four basic policy issues critical to assessing the effects of tort reforms on the tort system: (1) how soon we can expect to see effects of reforms; (2) whether reforms have affected the outcomes of disputes; (3) who won, who lost, and how much; and (4) whether reforms have affected economic behavior. The author points out that the kinds of data needed to assess the effects of reform are generally not available, and suggests that three types of new data collection systems need to be considered: (1) systematic efforts to obtain data from insurers and self-insured defendants on the aggregate outcomes of liability claims; (2) special surveys of claimants, the bar, and insurers to obtain the detailed individual claim information needed to identify the winners and losers in the reformed system; and (3) systems for collecting information both on the other factors that affect the behavior of participants in the tort system, and on economic outcomes and injuries.

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This work has been selected by scholars as being culturally important and is part of the knowledge base of civilization as we know it. This work is in the public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. To ensure a quality reading experience, this work has been proofread and republished using a format that seamlessly blends the original graphical elements with text in an easy-to-read typeface. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.