The Effects of Tort Reform on Medical Malpractice Litigation

The medical liability environment during the first few years of the 21st Century has been frequently referred to as the third medical malpractice crisis. This period has been characterized by perceived increases in malpractice insurance costs and defensive medicine, as well as concerns about resulting decreases in access to healthcare. Since the 1970s, states have implemented a variety of tort reform measures intended to ameliorate medical malpractice liability and combat the perceived harms. The effectiveness of these initiatives has been the subject of vigorous debate. This investigation sought to demonstrate that specific tort reform measures have had distinct effects on the volume and costs of medical malpractice litigation in recent years. We conducted a survey of the tort reform initiatives adopted in each state. Three major classes of tort reform were subjected to analysis, including statutory limitations on damages, collateral source rule reform, and modification of joint and several liability. The study period was defined as 1994-2004. Data on the number and value of medical malpractice payments made on behalf of physicians was collected for the years 2000-2004. For each class, we compared the data from states with the reform in continuous effect throughout the study period to the data from states without that same reform. Statistical analysis demonstrated that only statutory limitations on damages were apparently effective in reducing medical malpractice payment costs. The average annual value of payments in states with limitations on damages, $1,032,344 per 100,000 persons, was nearly 40 percent lower than the $1,663,896 in states without any damages limitations (p = .027; 95% CI: $76,061, $1,187,043). None of the reforms under study were demonstrated as having been effective in reducing the average annual number of medical malpractice payments. This study thus demonstrated that in contrast to two other prominent types of liability reform, statutory limitations on damages effectively reduce the annual costs of medical malpractice payments. Although medical malpractice payments are not the sole component of medical liability costs, the reduction in the former should result in an amelioration of the medical liability environment