Study Doubting Link Between Malpractice Premium Rates, Jury Awards Receives Criticism at AEI Forum, USA

Main Category: Litigation / Medical Malpractice
Article Date: 03 Apr 2005 - 17:00 PDT


A recent study that found no link between rising medical malpractice insurance premium rates in Texas and the frequency of claims paid or the amount of jury awards "drew fire" on Thursday at an... American Enterprise Institute forum in Washington, D.C., CQ HealthBeat reports (CQ HealthBeat, 3/31). The study, conducted by law professors at the University of Texas-Austin, the University of Illinois and Columbia University, examined insurance data in Texas between 1988 and 2002. Texas in 2003 implemented a $250,000 cap on noneconomic damages in malpractice lawsuits. The study found that the median jury award for plaintiffs who won malpractice lawsuits in 2002 was about $300,593, about the same as the median jury award in the 1990s. Malpractice insurance claims payments in 2002 totaled $515 million, or 0.6% of health care spending, compared with $414 million, or 0.8% of health spending, in 1990, according to the study. The study, which will appear in the May issue of the Journal of Empirical Legal Studies, found "no evidence of the medical malpractice crisis that produced headlines over the last several years and led to legal reform in Texas and other states," adding, "The malpractice litigation system has many flaws, but at least in Texas, sudden increases in claim frequencies and costs appear not to have been among them" (Kaiser Daily Health Policy Report, 3/11).

Criticism
At the forum, Texas Medical Association President Bohn Allen said that the results of the study were "adjusted for all kinds of things" and are misleading (Jordan, Houston Chronicle, 4/1). Urban Institute analyst Randall Bovbjerg praised the "painstaking work" required for the study but said that researchers should have conducted a more detailed analysis before they released the results. In addition, he said that malpractice insurance premium rates are based on estimated future claims, not past claims, and that the study excluded claims information from years in which premium rates increased in Texas. UT law and finance professor Bernard Black, lead author of the study, said the results are "solid." However, he added, "We don't study why (malpractice) premiums rose; we merely show that some common explanations are incorrect, at least in Texas" (CQ HealthBeat, 3/31).

"Reprinted with permission from kaisernetwork.org kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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