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By Bernard Black, Charles Silver, David Hyman, William Sage Texas enacted tort reform in 2003, including caps on damages for pain and suffering, in response to spikes in medical malpractice insurance premiums. President Bush has called for similar caps in federal legislation governing medical malpractice lawsuits. Physicians argue that these limits are needed because jury verdicts are soaring, settlements are rising and patients (or their attorneys) are filing frivolous lawsuits. In their view, the resulting increase in payouts and number of claims is driving up insurers' costs and thus the price of malpractice insurance. The same arguments were made when Texas adopted tort reform in 2003. … Although premiums for malpractice insurance rose sharply in Texas beginning in 1999, this spike was not matched by a one in either the number of closed claims or payout per closed claim. Instead, after adjusting for general inflation and Texas' growing population, we found: * Claims with payouts of at least $25,000 in 1988 dollars (which we call "large claims") were roughly constant over time. * The percentage of large claims with payments over $1 million held steady at about 6 percent throughout the period. * The number of smaller paid claims declined sharply, suggesting that these cases were driven out of the tort system over time. * Both total claims per physician and paid claims per physician fell over the period we studied. * Mean and median payouts per large claim were roughly constant. * Jury verdicts showed no trend.
Black and Silver are professors of law at the University of Texas, Austin. Hyman is a professor of law at the University of Illinois. Sage is a professor of law at Columbia University.
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