Do Noneconomic Damage Caps Reduce Medical Malpractice Insurance Premiums?

Evidence from North Carolina

Published in: Risk Management and Insurance Review, Volume 25, Issue 2, pages 201–218 (Summer 2022). doi: 10.1111/rmir.12216

Posted on RAND.org on September 23, 2022

by Hao Yu, Olesya Baker

Read More

Access further information on this document at Risk Management and Insurance Review

This article was published outside of RAND. The full text of the article can be found at the link above.

The impact of medical malpractice reforms, especially caps on noneconomic damages, is of special interest to policymakers and physicians. Adopting such caps has become rare during the past decade, and most existing analyses study state reforms occurring during periods of dramatic rises in malpractice insurance rates. This study contributes to the literature by examining how caps implemented in noncrisis periods affect malpractice premiums. It examines the effect of the 2011 North Carolina's adoption of a noneconomic damages cap by comparing county-level malpractice premiums for three specialties between North Carolina and states without caps both before and after the reform. It finds little evidence of pre-existing trends, followed by a lagged but significant reduction in premiums for each of the studied specialties in North Carolina. The timing and size of the effects are comparable to findings from the literature studying malpractice reforms passed during times of more dramatic liability trends.

Research conducted by

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.