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Medical Malpractice Reform and Insurer Claims Defense: Unintended Effects?

Medical Malpractice Reform and Insurer Claims Defense: Unintended Effects? In response to recent and past medical malpractice insurance crises, most states have implemented reforms meant to stabilize premiums and coverage availability. The importance of understanding whether these reforms implicitly affect the behavior and incentives of plaintiffs, attorneys, medical providers, and malpractice insurers in the intended way is crucial to policy makers, if they are to achieve their goal. This study specifically examines the effect of reforms on the claims defense efforts of insurers, given that defense expenses account for approximately 30 percent of malpractice premiums. Using state data for the period 1998-2002, we regress claims defense expenses against a variety of reform variables. These include seven tort reforms (noneconomic damage caps, punitive damage limits, attorney fee limits, modified collateral source rule, modified joint and several liability doctrine, mandatory pretrial screening, and statute of limitations) and two government-sponsored insurance mechanisms (joint underwriting associations and patient compensation funds). Claims defense expenses are found to be higher in the presence of noneconomic damage caps, punitive damage limits, and attorney fee limits—an unintended and counterproductive effect of reform—but are lower with mandatory pretrial screening and patient compensation funds. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Health Politics, Policy and Law Duke University Press

Medical Malpractice Reform and Insurer Claims Defense: Unintended Effects?

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Publisher
Duke University Press
Copyright
© 2007 by Duke University Press
ISSN
0361-6878
eISSN
0361-6878
DOI
10.1215/03616878-2007-032
pmid
17855719
Publisher site
See Article on Publisher Site

Abstract

In response to recent and past medical malpractice insurance crises, most states have implemented reforms meant to stabilize premiums and coverage availability. The importance of understanding whether these reforms implicitly affect the behavior and incentives of plaintiffs, attorneys, medical providers, and malpractice insurers in the intended way is crucial to policy makers, if they are to achieve their goal. This study specifically examines the effect of reforms on the claims defense efforts of insurers, given that defense expenses account for approximately 30 percent of malpractice premiums. Using state data for the period 1998-2002, we regress claims defense expenses against a variety of reform variables. These include seven tort reforms (noneconomic damage caps, punitive damage limits, attorney fee limits, modified collateral source rule, modified joint and several liability doctrine, mandatory pretrial screening, and statute of limitations) and two government-sponsored insurance mechanisms (joint underwriting associations and patient compensation funds). Claims defense expenses are found to be higher in the presence of noneconomic damage caps, punitive damage limits, and attorney fee limits—an unintended and counterproductive effect of reform—but are lower with mandatory pretrial screening and patient compensation funds.

Journal

Journal of Health Politics, Policy and Law – Duke University Press

Published: Oct 1, 2007

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