Caps on noneconomic damages’ effect on the number of paid malpractice claims in various American states

Abstract

Background: Tort reform with caps on noneconomic damages, such as pain and suffering, has been proposed as a way of decreasing the national cost of healthcare in the United States. In this paper we measure the impact of noneconomic damage caps at the state level.

Methods: Changes in the rate of paid claims are estimated using an interrupted time series design which identifies changes in trends following the implementation of an intervention. Data from the National Practitioner’s Data Bank are used to create yearly trends in state malpractice claims using a linear spline model with a knot at the year that noneconomic caps were implemented to estimate the effect of the noneconomic caps. The effect of statutes of limitations are also modeled with a spline model. Finally, a difference-in-difference design matches states that instituted or significantly changed noneconomic caps to states that did not.

Findings: Of the fifteen states that implemented caps on noneconomic damages or significantly changed their caps since 2000, two had statistically significant differences in the absolute number of paid claims and six had significant changes to their trend of paid claims.

Conclusions: Tort reforms that address caps on noneconomic damages, though facially similar, have significantly different results when implemented in individual states. Qualitative studies of the individual state policies need to evaluate how the state policies differ and why they led to different results to direct other states and the federal government as they consider similar policies.