At the Intersection of Health, Health Care and Policy

Transcription

1 At the Intersection of Health, Health Care and Policy Cite this article as: Seth A. Seabury, Eric Helland and Anupam B. Jena Medical Malpractice Reform: Noneconomic Damages Caps Reduced Payments 15 Percent, With Varied Effects By Specialty Health Affairs, 33, no.11 (2014): (published online October 22, 2014; /hlthaff ) The online version of this article, along with updated information and services, is available at: For Reprints, Links & Permissions: Alerts : To Subscribe: Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600, Bethesda, MD Copyright 2014 by Project HOPE - The People-to-People Health Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or mechanical, including photocopying or by information storage or retrieval systems, without prior written permission from the Publisher. All rights reserved. Not for commercial use or unauthorized distribution Downloaded from content.healthaffairs.org by Health Affairs on January 5, 2015

2 Web First doi: /hlthaff HEALTH AFFAIRS 33, NO. 11 (2014): Project HOPE The People-to-People Health Foundation, Inc. By Seth A. Seabury, Eric Helland, and Anupam B. Jena Medical Malpractice Reform: Noneconomic Damages Caps Reduced Payments 15 Percent, With Varied Effects By Specialty Seth A. 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. Eric Helland is a professor of economics at Claremont McKenna College, in Claremont, and the RAND CorporationinSantaMonica, both in California. Anupam 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 , 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. Medical malpractice liability remains one of the most hotly debated issues in health policy and an area of intense concern among physicians. 1,2 Proponents of the US medical malpractice system argue that it is an important tool that helps protect patients against negligent care. In contrast, opponents argue that it is costly and inefficient and does a poor job of delivering compensation to patients. 3,4 In response to these concerns, many states have enacted legislative reforms that either directly or indirectly limit the damages that patients can recover in medical malpractice cases. However, researchers have questioned whether malpractice liability reforms have successfully lowered the cost of malpractice liability or assuaged physicians fears of malpractice lawsuits. 5,6 Previous studies that have examined the impact of malpractice reforms on expected liability have produced mixed results. Several studies have found that limitations on allowable damage recovery, particularly for noneconomic damages (defined as payments for pain and suffering, loss of companionship, and so on), reduce the average size of malpractice payments However, others have found no effect. 12,13 There is a similar lack of consensus on the relationship between malpractice reform and the frequency of claims. Several studies have found that the adoption of liability reform lowers the probability of physicians experiencing a malpractice claim, 7,9,14 but others have found no effect. 8,12,13 Several limitations of existing studies may explain the lack of definitive evidence on the impact of malpractice tort reforms on the size and frequency of malpractice payments. First, previous studies focus on the effect of malpractice reforms on all physicians instead of on those 2048 Health Affairs November :11

3 in distinct specialties. Malpractice risk varies considerably across specialties, driven by differences in patient populations, rates and risks of procedural use, and physician characteristics. This indicates that there is no reason to expect malpractice reform to have a uniform impact across all physicians. Second, most previous studies rely on highly aggregated measures of malpractice reforms and, with several exceptions, 20,21 do not distinguish between the different dimensions across which states have adopted reforms. A cap on damages with a lower value will be more restrictive, because it will both affect more cases and lead to lower average payments in the cases to which it applies. Just as there is an expectation that reforms will affect liability risk differently across specialties, there is an expectation that reforms imposing different restrictions will have different effects as well. Third, previous studies suffer from important data limitations. Some have used small samples from individual insurers 8,22 or a single state. 21 Others have used data from the National Practitioner Data Bank, which theoretically includes all payments made to claimants on behalf of health care providers. 23 However, it has been criticized for underreporting payments, in part because of the so-called corporate shield loophole that ignores lawsuits involving both physicians and hospitals in which hospitals assume the full liability payments an approach that allows physicians to avoid being reported in the database. 24 Moreover, although the National Practitioner Data Bank includes information on whether an adverse event was broadly related to surgery, an obstetric procedure, or anesthesia, it does not include information on specific physician specialty. The database also states that codes for surgery, obstetrics, and anesthesia may refer to physicians who were not actually surgeons, obstetricians, or anesthesiologists. We used data from the Physician Insurers Association of America (PIAA) Data Sharing Project, 25 the largest available collection of paid and unpaid malpractice claims from private insurers in the United States, to estimate the effect of state malpractice reforms in the period on the payment size of malpractice claims according to different physician specialties. In addition, we compared the effects of restrictive noneconomic damages caps of $250,000 to the effects of less restrictive caps of $500,000. We estimated these effects overall and for ten distinct categories of physician specialties. Study Data And Methods Malpractice Claims Data We used data on malpractice claims for the period by medical specialty and state from the PIAA Data Sharing Project. 25 The association is an organization of sixty domestic and twelve international insurers, with forty-six affiliated members. The Data Sharing Project includes medical professional liability claims against physicians insured by approximately half of the association s member companies, with claims from all fifty states (medical professional liability is the name of the insurance line that medical malpractice claims fall under). The association s member companies insure over 325,000 medical practitioners, and the Data Sharing Project contains information on all closed claims and on claims that have been open for one year or longer. The data represent approximately one-fourth of medical malpractice claims in the United States and have been used to study malpractice risk in past studies. 14,26 30 Our data consisted of the total number of malpractice claims; the number of claims that involved some indemnity payment to the plaintiff; and total indemnity payments (if any), broken down by state, specialty, and year. Consistent with past work, 17 19,31 we included only claims that involved some defense costs. We did this to eliminate cases in which there was a suspicion but no formal allegation of negligence. We used these data to compute average malpractice payment per specialty, state, and year for claims in which an indemnity payment to a patient was made. It is important to note that the relationship between tort reform and the frequency of medical malpractice claims has been a common target of study in past work. But the PIAA Data Sharing Project, despite its strengths, has limited utility for studying the frequency of claims because it does not collect any information on the exposure of its member organizations (that is, the number of physicians they insure). Thus, there is no denominator against which to normalize the number of claims. We aggregated our data into the following specialties: internal medicine (including family practice), general surgery, surgical subspecialties, obstetrics and gynecology, pediatrics, cardiology, anesthesiology, radiology, and ophthalmology. Data were available for other specialties, but they had too few claims to examine separately. Thus, we combined them into an other category. All payment dollar values were adjusted to 2010 values using the Consumer Price Index. All analyses were performed using the statistical software Stata, version 12. The data were deidentified. The study was exempted from human sub- November :11 Health Affairs 2049

4 Web First jects review by the Institutional Review Board at RAND. Malpractice Reform Data We used published historical data on state-level tort reforms from the Database of State Tort Law Reforms. 32 This database represents a systematic effort to provide a comprehensive list of malpractice reforms implemented by state and year, and it has been widely used in empirical work on malpractice. The database tracks which reforms were rejected by state courts, allowing us to identify whether a reform was in effect for a particular year. We merged information from the database with claims data from the PIAA Data Sharing Project at the state-year level for our study period. We created indicator variables for whether a state had in effect in any given year any of the following reforms: statutory caps on noneconomic damages awards (our main variable of interest), caps on punitive damages awards, restrictions on the contingency fees that attorneys charge their clients, reforms to the collateral source rule (which allow defendant physicians to reduce their liability payments to a plaintiff by the amount of compensation for costs of injury already received by the plaintiff from collateral parties, such as insurers), and reforms to the rules on joint and several liability (which before reform allowed plaintiffs to recover the entire amount as opposed to a percentage of a damage award from any of the defendants found responsible for the injury, irrespective of any one defendant s degree of responsibility for the injury). We focused on caps on noneconomic damages because these caps have been the most controversial reform in the past several years, and some researchers and policy makers have argued that they are the tort reform that has had the largest effect on average payments. 20 Some caps are indexed to the rate of inflation, so that they increase over time. We recorded the nominal value of every cap in place in each year. Statistical Analysis We estimated the impact of malpractice liability reforms on average payments using a difference-in-differences approach. By allowing us to estimate changes in malpractice risk within states before and after the adoption of reforms, this approach accounted for fixed differences between states in malpractice risk and for national trends that affect malpractice risk in all states. We estimated linear regressions with average payment amounts as the dependent variables. The main independent variables were state and year indicators for specific malpractice tort reforms, of which noneconomic damages caps were the primary reform of interest. Other covariates included state fixed effects, to account for time-invariant differences across states in their health care systems and liability regimes, and year fixed effects to control for time trends. To control for demographic trends across states, we also included average income per capita, average age of the population, and the average percent of the population that was white. This information was based on data from the Area Health Resource File, published by the Health Resources and Services Administration. To capture the overall effect of reforms across specialties, we estimated a regression that pooled specialties together. To capture specialty-specific effects of reforms, we used an interacted model that allowed for differential effects of the cap across specialties. All regression models and sample means were weighted by the counts of total claims in each combination of specialty, state, and year. Stateyear observations in which there were no closed claims with an indemnity payment were not included. Standard errors were clustered at the state and specialty level to allow for correlation in the error terms over time. 33 F-tests were used to assess whether or not the interactions between specialty and noneconomic damages caps were jointly different from zero. Our regressions included all reform types in each model, although we focused our discussion on the effects of noneconomic damages caps.we report estimates for the impact of other reforms on claim outcomes in the online Appendix. 34 To estimate the impact of the restrictiveness of damage caps on indemnity payments, our models allowed the effect of noneconomic damages caps to differ according to cap size. Specifically, we estimated the effect of adopting less restrictive and more restrictive damage caps defined as cap values of $500,000 and $250,000, respectively compared to no cap at all on noneconomic damages. For purposes of context, $250,000 is the cap adopted by California s Medical Injury Compensation Reform Act of 1975, which is often used as a model by proponents of reform. 35 Limitations Our study had several limitations. First, we did not address the implications of adopting noneconomic damages caps for other important outcomes, such as the cost and quality of medical care or patient safety outcomes. Evidence about the impact of malpractice reform on patient outcomes is mixed. 14,36 38 However, opponents of reforms to reduce physician malpractice liability argue that shielding physicians from the full cost of malpractice liability could provide incentives to provide lower-quality care and reduce patient safety. Second, the PIAA Data Sharing Project is the largest available database of medical profession Health Affairs November :11

5 al liability claims and covers all fifty states. However, it was not designed to be nationally representative. Third, we assumed that the adoption of a new policy was uncorrelated with other, unobserved factors that could also drive claim outcomes. This is a limitation of any retrospective analysis of state policies using a difference-in-differences methodology. Fourth, it is possible that stringent caps reduce malpractice claims and that the claims not made because of the caps have marginally weaker merits and lower average indemnity payments. In that case, our estimates of the reductions in average indemnity payments associated with stringent caps may underestimate the caps true effect. Study Results Our sample consisted of 220,653 total claims, of which 74,366 (33.7 percent) involved indemnity (Exhibit 1). This is a higher proportion of paid claims than in some past work 17 but is consistent with other studies. 39 The proportion of claims that involved indemnity varied across specialties, with the highest proportions in obstetrics and gynecology (39.4 percent), general surgery (38.8 percent), and anesthesiology (38.3 percent). Average payments for paid claims rose steadily from 1985 through 1994 (Exhibit 2). After a brief decline, there was rapid growth until After 2003, average payments leveled off, ranging from approximately $330,000 to $350,000 per year. Across all years, the average payment for a claim with indemnity was $293,645. From 1985 to 2010, the majority of caps were of $250,000 $500,000, with a small number of states adopting caps of $250,000 or less or of greater than $500,000 (Exhibit 3). The majority of caps were adopted in the late 1980s or the mid- 2000s, times that correspond to periods of instability in the malpractice insurance markets. 40 The national average payment stabilization appears to coincide with increases in the number of states with noneconomic damages caps in However, other potentially confounding factors addressed by regression analysis are not controlled for in this simple correlation. Exhibit 4 shows the estimated effects of a state s adoption of a noneconomic damages cap on average malpractice payments, compared to having no cap at all, for all physicians and by physician specialty. These estimates do not distinguish between caps of varying restrictiveness. Overall, noneconomic damages caps reduced average malpractice awards by $42,980 (p <0:001), a reduction of about 15 percent. The caps had variable effects on average indemnity payments across specialties. The largest effect was in pediatrics (a reduction of $116,662; p<0:001), which is a specialty known to have a low frequency of claims but among the highest average payments. 41 The caps also led to large and significant reductions in average payments in obstetrics and gynecology (a reduction of $104,809; p<0:001) and cardiology (a reduction of $57,480; p ¼ 0:05). They had a lowerthan-average impact on payments in surgical subspecialties, even though these specialties tend to be at highest risk in terms of frequency of claims. 17 More restrictive noneconomic damages caps would be expected to have a greater impact on the size of malpractice awards, especially for specialties with high average payments. Exhibit 5 shows the estimated effects of a restrictive cap of $250,000 and a less restrictive cap of $500,000, compared to having no cap in place. We present average payment amounts to provide context. Consistent with past findings, 17 our results showed wide variation in the size of average payments by specialty. Across all specialties, a less restrictive cap on noneconomic damages was associated with a small reduction in average award size ($17,866, or 6.1 percent; Exhibit 5). However, this reduction was not significant. In contrast, a more restrictive cap was associated with a significant and substantial reduction in award size ($59,331, or 20.2 percent). Generally, the less restrictive cap had no significant effect on malpractice awards for various specialties; the only exception was internal medicine (Exhibit 5). But the more restrictive cap Exhibit 1 Medical Malpractice Claims, By Physician Specialty, Number of Claims with indemnity Specialty claims Number Percent All specialties 220,653 74, Anesthesiology 8,151 3, Cardiology 4, General surgery 23,245 9, Internal medicine 55,390 17, Obstetrics and gynecology 32,666 12, Ophthalmology 6,339 2, Pediatrics 6,340 2, Radiology 12,733 4, Surgical subspecialties 46,451 14, Other specialties 25,113 7, SOURCE Authors analysis of data from the Physician Insurers Association of America Data Sharing Projectdatabase(seeNote25intext).NOTE Internal medicine includes family practice. November :11 Health Affairs 2051

6 Web First Exhibit 2 Trends In Average Medical Malpractice Payments, SOURCE Authors analysis of data from the Physician Insurers Association of America Data Sharing Projectdatabase(seeNote25intext).NOTE Thefigureshowstheclaim-levelaveragepaymentusing only claims that involved some indemnity payment to the plaintiff. Exhibit 3 was associated with significant reductions in malpractice award sizes overall and for seven of the ten specialty categories. The effect of the more restrictive cap was strongest for pediatrics, followed by obstetrics and gynecology and cardiology. Across specialties, the effect of the more restrictive cap was larger for specialties with higher average indemnity payments. For example, pediatrics, obstetrics and gynecology, anesthesiology, and cardiology were the specialty categories with the highest average payments and were also those for which the estimated effect of the cap was greatest. More generally, the correlation between average specialty malpractice award size and estimated specialty-specific restrictive cap effects was 0.82, which suggests a greater impact of restrictive caps for specialties with higher malpractice awards. A joint F-test of the specialty interaction Trends In States Adoption Of Noneconomic Damages Caps, By Size Of Cap, terms with the noneconomic damages cap suggested that the effects were significantly different from one another for a damages cap of $250,000 (p <0:001). The online Appendix shows the effects of other reform types (caps on punitive damages awards, restrictions on the contingency fees that attorneys charge their clients, reforms to the collateral source rule, and reforms to the rules on joint and several liability) on average payments, estimated in the same difference-in-differences model as the effects of the noneconomic damages cap. 34 Other reforms had little consistent effect on outcomes, except for caps on attorney contingency fees, which were associated with higher payments. This is consistent with other evidence that these reforms may discourage attorneys from accepting cases with relatively low expected awards. 42 We also found that joint and several liability reform was associated with higher payments, which is also consistent with past findings. 37 The online Appendix reports the effects of noneconomic damages caps on all claims (paid and unpaid). 34 The caps were associated with a reduction of $16,948 (p <0:001) in the average payment overall and had no effect on the share of claims resulting in payment. Finally, the Appendix 34 shows that our findings and conclusions were robust to several sensitivity analyses. These were a discrete, nonparametric approach to estimating the effect of noneconomic damages cap size on average payments; inclusion of lead effects of tort reforms that is, indicator variables for future tort reforms in a state introduced as explanatory variables in regressions to assess preexisting trends in malpractice awards in states that implemented reforms; inclusion of lag effects to account for the possibility of a delayed onset in the impact of the cap; clustering of standard errors at the state instead of the state-specialty level; focusing on caps that applied to all tort cases as opposed to caps that applied only to malpractice cases; and adjustment for state-year specific rates of penetration of health maintenance organizations into state health care markets. SOURCE Authors analysis of data from Avraham R., Database of State Tort Law Reforms (Note 32 in text). Discussion We analyzed the impact of noneconomic damages caps and other medical malpractice reforms on the size of malpractice indemnity payments according to physician specialty. We found that restrictive noneconomic damages caps were associated with lower average payments across all specialties, with particularly large reductions among specialties with high average payment sizes such as pediatrics and obstetrics. In addi Health Affairs November :11

7 Exhibit 4 Estimated Impact Of Noneconomic Damages Caps On Average Medical Malpractice Payments, By Physician Specialty SOURCE Authors analysis of data from the Physician Insurers Association of America Data Sharing Project database (see Note 25 in text). NOTES Estimated impacts are based on difference-in-differences regression of average payments from 1985 to 2010 against the presence of noneconomic damages caps as well as fixed effects for physician specialty, year, state, the presence of other forms of tort reform in the state (punitive damages caps, joint and several liability reform, collateral source rule reform, and caps on attorney contingency fees), and state demographic characteristics (average income per capita, average age of the population, and average percentage of the population that was white). Specialty-specific estimates come from a separate regression with cap-specialty interactions. The dots represent the average estimated effect of noneconomic damages caps on average payment, compared to having no cap at all, and the lines represent the 95% confidence intervals. Confidence intervals reflect variance estimates that were calculated to allow for clustering at the state and specialty levels. tion, we found that the size of the noneconomic damages cap made a difference in the cap s impact. For example, a $250,000 cap reduced average indemnity payments by approximately onefifth, compared to having no cap at all, but a less restrictive cap of $500,000 generally had no effect. Our analysis contributes to previous work in two important ways. First, we analyzed the different effects of malpractice reforms across various physician specialties. Malpractice risk is known to vary considerably across specialties because of differences in patient populations, rates and risks of procedural use, and physician characteristics all of which may lead malpractice reforms to have distinct impacts across specialties. Second, we analyzed how the effects of noneconomic damages caps on payment size varied according to the restrictiveness of the cap. We estimated the potential impacts of two relatively common cap sizes $250,000, which tort reform advocates often consider the model, and $500,000 and compared their impacts on claims in different specialties. Our findings complement previous work that used data from Texas to simulate the impact in other states of noneconomic damages caps of varying stringency; 21 analyses of the National Practitioner Data Bank that demonstrated that states implementing more stringent caps on noneconomic damages in the period had larger declines in malpractice claim rates and average indemnity sizes; 20 and previous studies that explored the impact of cap stringency on outcomes such as cesarean section rates (a proxy for defensive medicine) and physician labor supply The impact of a more restrictive $250,000 cap was greatest for specialties with higher average indemnity payments (such as pediatrics, obstetrics and gynecology, and cardiology), instead of November :11 Health Affairs 2053

8 Web First Exhibit 5 Estimated Impact Of Noneconomic Damages Caps On Average Medical Malpractice Payments, By Cap Size And Physician Specialty Effect on average indemnity payment of: $500,000 cap $250,000 cap Average Effect Effect Specialty payment ($) Dollars Percent p value Dollars Percent p value All specialties 293,645 17, , <0.01 Anesthesiology 344,356 29, , Cardiology 325,337 27, , <0.01 General surgery 267,007 27, , Internal medicine a 268,900 40, , <0.01 Obstetrics and gynecology 376,845 65, , <0.01 Ophthalmology 256,380 37, , Pediatrics 390,141 31, , <0.01 Radiology 271,760 4, , Surgical subpecialties 259,228 2, , <0.01 Other specialties 304,052 40, , <0.01 SOURCE Authors analysis of data from the Physician Insurers Association of America Data Sharing Project database (see Note 25 in text). NOTES Average payment amounts reflect the average across all years ( ). Estimated impacts are based on difference-in-differences regression of average payments from 1985 to 2010 against the presence of noneconomic damages caps and the size of the cap, as well as fixed effects for physician specialty, year, state, the presence of other forms of tort reform in the state (punitive damages caps, joint and several liability reform, collateral source rule reform, and caps on attorney contingency fees), and state demographic characteristics (average income per capita, average age of the population, and average percentage of the population that was white). We report estimates for the estimated effect of two caps compared to no cap at all: one at $250,000 (more restrictive) and one at $500,000 (less restrictive). Specialty-specific estimates come from a separate regression with cap-specialty interactions. p values reflect clustering at the state and specialty levels. a Includes family practice. for specialties that have traditionally had more frequent claims. For example, surgical subspecialties are typically considered the highest risk because of the size of malpractice premiums and frequency of payments. However, compared to other specialties, those fields may actually benefit less from restrictive caps (in terms of lower payment sizes) since indemnity payments in surgical subspecialties are generally similar in magnitude to those in other lower-risk specialties. Put differently, restrictive noneconomic damages caps would not be expected to have large effects in cardiovascular and thoracic surgery, a specialty that is commonly considered to be high risk. In a previous study, it ranked second-highest in the rate of malpractice claims but was average compared to other specialties in the size of indemnity payments. 17 Our findings may also help clarify why previous studies have produced mixed results on the impact of tort reforms on malpractice risk: Most evidence suggests that noneconomic damages caps reduce the size of malpractice payments by as much as percent and also reduce the frequency of claims, 7 11,43 but other studies find no effect. 12,13 Our findings unpack the results of these prior studies into differential effects of malpractice reforms across physician specialties and of more versus less restrictive caps. Furthermore, our findings suggest that the indeterminacy of prior studies may be partially attributable to their limited analyses of these two important dimensions. The implications of our findings for policy depend in part on the goal of noneconomic damages caps. If the intent is to lower the expected cost of malpractice liability for the average physician, our findings suggest that only more restrictive caps such as the $250,000 noneconomic damages limit used in California s Medical Injury Compensation Reform Act and adopted by seven other states are likely to have a significant effect on malpractice liability. However, if the goal of caps is to trim extreme verdicts in outlier cases, without necessarily affecting the average or typical case, then a less restrictive cap might suffice (although past work indicates that malpractice insurance policy limits might already reduce extreme verdicts by leading plaintiffs attorneys and courts to lower award sizes to the policy limit of a given physician s liability insurer). 46 Our study is also relevant to ongoing policy debates about the size of noneconomic damages caps. For example, a proposed ballot initiative in California would raise the noneconomic damages cap from $250,000 to $1.1 million. This would exceed the typical policy limit, which is usually binding in terms of payment size, and thus would effectively eliminate the cap for the 2054 Health Affairs November :11

9 majority of cases. The specific effect of this policy would depend on the distribution of policy limits across physicians in California. However, our findings suggest that it would lead to about a 20 percent increase in average indemnity payments, with larger increases in obstetrics and gynecology and in pediatrics (based on the estimated changes in Exhibit 5). Our findings do not necessarily mean that damages caps are socially beneficial. Other researchers have questioned the fairness of noneconomic damages caps by pointing out that they lower award sizes the most for patients with grave and disfiguring injuries. 47 Our study was limited to assessing the impact of noneconomic damages caps on claim outcomes. A comprehensive assessment of the implications of the caps for social welfare would require a complete accounting of the costs and benefits of reform, including the potential impact on patients. Conclusion Our study provides new insights into the relationship between the adoption of noneconomic damages caps and medical malpractice liability risk for physicians in different specialties. The restrictiveness of specific malpractice policies also determines whether those policies have any effect on malpractice awards. Future evaluations of malpractice reforms and the design of malpractice policy should consider both the types of physicians who are most likely to be affected by reforms and the differential impact that reforms may have depending on how restrictive they are. Seth Seabury received funding from the RAND Institute for Civil Justice (ICJ) and grant support from the National InstituteonAging(Grant No. 7R01AG031544). Eric Helland received funding from the ICJ. Anupam Jena received an award from the Office of the Director, National Institutes of Health (NIH Early Independence Award No. 1DP5OD ). The Physician Insurers Association of America provided data for this study through an agreement with the RAND Corporation. The association was not involved in the design or conduct of the study or in the interpretation and reporting of findings. [Published online October 22, 2014.] NOTES 1 Studdert DM, Mello MM, Sage WM, DesRoches CM, Peugh J, Zapert K, et al. Defensive medicine among high-risk specialist physicians in a volatile malpractice environment. JAMA. 2005;293(21): Bishop TF, Federman AD, Keyhani S. Physicians views on defensive medicine: a national survey. Arch Intern Med. 2010;170(12): Mello MM, Chandra A, Gawande AA, Studdert DM. National costs of the medical liability system. Health Aff (Millwood). 2010;29(9): Studdert DM, Mello MM, Brennan TA. Medical malpractice. N Engl J Med. 2004;350(3): Sloan FA, Shadle JH. Is there empirical evidence for defensive medicine? A reassessment. J Health Econ. 2009;28(2): Carrier ER, Reschovsky JD, Mello MM, Mayrell RC, Katz D. Physicians fears of malpractice lawsuits are not assuaged by tort reforms. Health Aff (Millwood). 2010;29(9): Avraham R. An empirical study of the impact of tort reforms on medical malpractice settlement payments. J Legal Stud. 2007;36(Suppl 2):S Danzon P. The frequency and severity of medical malpractice claims. J Law Econ. 1984;27(1): Danzon PM. The frequency and severity of medical malpractice claims: new evidence. Law Contemp Probl. 1986;49(2): Sloan FA. State responses to the malpractice insurance crisis of the 1970s: an empirical assessment. J Health Polit Policy Law. 1985;9(4): Yoon A. Damage caps and civil litigation: an empirical study of medical malpractice litigation in the South. Am Law Econ Rev. 2001;3(2): Zuckerman S, Bovbjerg RR, Sloan F. Effects of tort reforms and other factors on medical malpractice insurance premiums. Inquiry. 1990; 27(2): Durrance CP. Noneconomic damage caps and medical malpractice claim frequency: a policy endogeneity approach. 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Estimating the effect of damages caps in medical malpractice cases: evidence from Texas. J Leg Anal. 2009;1(1): Sloan FA, Chepke LM. Medical malpractice. Cambridge (MA): MIT Press; Satiani B. The National Practitioner Data Bank: structure and function. J Am Coll Surg. 2004;199(6): Government Accountability Office. National Practitioner Data Bank: major improvements are needed to enhance data bank s reliability [Internet]. Washington (DC): GAO; 2000 Nov [cited 2014 Oct 1]. (Report No. GAO ). Available from: pdf 25 Physician Insurers Association of America. Data Sharing Project [Internet]. Rockville (MD): PIAA; c2014 [cited 2014 Oct 1]. Available from: Sharing_Project/wcm/_Data_ Sharing_Project/What_is_the_ DSP.aspx?hkey=e5c e a44-ceea2455cc63 26 Carroll AE, Buddenbaum JL. Malpractice claims involving pediatricians: epidemiology and etiology. November :11 Health Affairs 2055

10 Web First Pediatrics. 2007;120(1): Carroll AE, Parikh PD, Buddenbaum JL. The impact of defense expenses in medical malpractice claims. J Law Med Ethics. 2012;40(1): Brown TW, McCarthy ML, Kelen GD, Levy F. An epidemiologic study of closed emergency department malpractice claims in a national database of physician malpractice insurers. Acad Emerg Med. 2010;17(5): Kim C, Vidovich MI. Medicolegal characteristics of cardiac catheterization litigation in the United States, 1985 to Am J Cardiol. 2013; 112(10): Oetgen WJ, Parikh PD, Cacchione JG, Casale PN, Dove JT, Harold JG, et al. Characteristics of medical professional liability claims in patients with cardiovascular diseases. Am J Cardiol. 2010;105(5): Seabury SA, Chandra A, Lakdawalla DN, Jena AB. On average, physicians spend nearly 11 percent of their 40- year careers with an open, unresolved malpractice claim. Health Aff (Millwood). 2013;32(1): Avraham R. Database of state tort law reforms (5th) [Internet]. Rochester (NY): Social Science Research Network; [revised 2014 May 21; cited 2014 Oct 10]. Available for download from: abstract_id= Cameron AC, Miller DL. Robust inference with clustered data. In: Ullah A, Giles DEA, editors. Handbook of empirical economics and finance. Boca Raton (FL): Chapman and Hall; p To access the Appendix, click on the Appendix link in the box to the right of the article online. 35 For example, the American Medical Association supports the adoption of a federal policy incorporating a $250,000 noneconomic damages cap and other policies included in the California reform. See American Medical Association. H federal medial liability reform [Internet]. Chicago (IL): AMA; [cited 2014 Oct 9]. Available from: ssl3.ama-assn.org/apps/ecomm/ PolicyFinderForm.pl?site= html/policyfinder/policyfiles/hne/ H HTM 36 Kessler D, McClellan M. Do doctors practice defensive medicine? Q J Econ. 1996;111(2): Currie J, MacLeod WB. First do no harm? Tort reform and birth outcomes. Q J Econ. 2008;123(2): Lakdawalla DN, Seabury SA. The welfare effects of medical malpractice liability. Int Rev Law Econ. 2012;32(4): Studdert DM, Mello MM, Gawande AA, Gandhi TK, Kachalia A, Yoon C, et al. Claims, errors, and compensation payments in medical malpractice litigation. N Engl J Med. 2006;354(19): Mello MM, Studdert DM, Brennan TA. The new medical malpractice crisis. N Engl J Med. 2003;348(23): Jena AB, Chandra A, Seabury SA. Malpractice risk among US pediatricians. Pediatrics. 2013;131(6): Garber S, Greenberg MD, Rhodes H, Zhuo X, Adams JL. Do noneconomic damages caps and attorney fee limits reduce access to justice for victims of medical negligence? J Empir Leg Stud. 2009;6(4): Mello M. Medical malpractice: impact of the crisis and effect of state tort reforms [Internet]. Princeton (NJ): Robert Wood Johnson Foundation; 2006 May [cited 2014 Oct 1]. (Research Synthesis Report No. 10). Available from: %20on%20crisis.pdf 44 Encinosa WE, Hellinger FJ. Have state caps on malpractice awards increased the supply of physicians? Health Aff (Millwood). 2005;24: w DOI: / hlthaff.w Yang YT, Mello MM, Subramanian SV, Studdert DM. Relationship between malpractice litigation pressure and rates of cesarean section and vaginal birth after cesarean section. Med Care. 2009;47(2): Hyman DA, Black B, Zeiler K, Silver C, Sage WM. Do defendants pay what juries award? post verdict haircuts in Texas medical malpractice cases, J Empir Leg Stud. 2007;4: Studdert DM, Yang YT, Mello MM. Are damages caps regressive? A study of malpractice jury verdicts In California. Health Aff (Millwood). 2004;23: Health Affairs November :11