The Resolution of Medical Malpractice Claims

Research Results and Policy Implications

by Patricia Munch Danzon, Lee A. Lillard


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In the early 1970s, both the frequency of medical malpractice claims and the dollar awards to successful plaintiffs rose at unprecedented rates. In 1974-1975, the malpractice insurance crisis erupted. By the end of 1976, most state legislatures had enacted laws to deal with the perceived causes of the crisis. With only scant empirical evidence on the actual operation of the tort system and likely effects of any changes, however, legislators have had to rely on anecdote, subjective reasoning, and conventional wisdom. The research summarized in this report aims at rectifying that deficiency. It analyzes two computerized files on over 6,000 closed claims, using a computerized model of the bargaining behavior through which claims are resolved. It produced useful evidence on the actual operation of the malpractice system, including changes made during the crisis, and analytic tools that can be applied to understand dispute resolution in other contexts.

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