Impact of legal reforms on medical malpractice costs

Office of Technology Assessment
Record ID 31995000080
Authors' objectives:

Background Paper prepared as part of an assessment on Defensive Medicine and Medical Malpractice. The objective was to assess the impact of legal reforms for medical malpractice liability on direct malpractice costs. The indications for direct malpractice costs included physician malpractice insurance premiums, the frequency of claims against physicians, and the amount paid per successful claim.

Authors' results and conclusions: Every State in the United States has implemented one or more malpractice reforms in order to stem the rise in medical malpractice costs ( primarily in the form of malpractice insurance premiums). Despite the range of reforms that have been enacted, empirical studies found that only two reforms consistently reduced direct malpractice costs: caps on damages and mandatory collateral source offsets. These reforms consistently reduced one or more of the malpractice cost indicators. The results on changes in frequency of suit were not conclusive, however, due to data limitations.; Other reforms, such as shortening the time period in which to bring a suit (shortening the statute of limitations), pretrial screening panels, changes in the doctrine of informed consent, and allowing costs to be awarded in frivolous suits, showed mixed results. Thus, it is not known whether these reforms do have an impact on costs or whether the positive results were a function of limitations in the design of certain studies.; Limits on attorney fees, modifications in the standard of care, mandatory and discretionary periodic payments, and restricting the use of the legal doctrine called res ipsa loquitur had no impact on malpractice costs.
Authors' recommendations: The direct cost of medical malpractice liability is less than one percent of total health care expenditures. Therefore, significant savings in health care costs cannot be achieved by malpractice liability reform unless such reforms also impact indirect costs, such as physician behavior. It is postulated that physicians respond to the threat of malpractice liability by ordering unnecessary tests and procedures, a practice known as defensive medicine. If defensive medicine is a real phenomenon that adds significantly to overall health care costs and if malpractice liability reforms can be expected to alter that behavior, then malpractice liability reform may have a substantial impact on health care costs. These two questions - the extent of defensive medicine and the link between malpractice reform and defensive medicine - have been explored in another OTA report, Defensive Medicine and Medical Malpractice, which was published in June 1994. Other output or dissemination activity: Used in U. S. health reform debate.
Authors' methods: Review
Project Status: Completed
Year Published: 1993
English language abstract: An English language summary is available
Publication Type: Not Assigned
Country: United States
MeSH Terms
  • Health Care Costs
  • Insurance, Liability
  • Malpractice
Organisation Name: U. S. Congress. Office of Technology Assessment
Copyright: Office of Technology Assessment
This is a bibliographic record of a published health technology assessment from a member of INAHTA or other HTA producer. No evaluation of the quality of this assessment has been made for the HTA database.