Health Aff (Millwood). 2014 Oct 22. pii: 10.1377/hlthaff.2014.0492. [Epub ahead of print]

Medical Malpractice Reform: Noneconomic Damages Caps Reduced Payments 15 Percent, With Varied Effects By Specialty.

Seabury SA1, Helland E2, Jena AB3.

Author information

• 1Seth A. Seabury (seabury@usc.edu) is an associate professor at the Leonard D. Schaeffer Center for Health Policy and Economics and in the Keck School of Medicine, University of Southern California, in Los Angeles.
• 2Eric Helland is a professor of economics at Claremont McKenna College, in Claremont, and the RAND Corporation in Santa Monica, both in California.
• 3Anupam B. Jena is an assistant professor of health care policy and medicine at Harvard Medical School and a physician at Massachusetts General Hospital, both in Boston, Massachusetts.

Abstract

The impact of medical malpractice reforms on the average size of malpractice payments in specific physician specialties is unknown and subject to debate. We analyzed a national sample of malpractice claims for the period 1985-2010, merged with information on state liability reforms, to estimate the impact of state noneconomic damages caps on average malpractice payment size for physicians overall and for ten different specialty categories. We then compared how the effects differed according to the restrictiveness of the cap ($250,000 versus $500,000). We found that, overall, noneconomic damages caps reduced average payments by $42,980 (15 percent), compared to having no cap at all. A more restrictive $250,000 cap reduced average payments by $59,331 (20 percent), and a less restrictive $500,000 cap had no significant effect, compared to no cap at all. The effect of the caps overall varied according to specialty, with the largest impact being on claims involving pediatricians and the smallest on claims involving surgical subspecialties and ophthalmologists.