Another Empirical Study Casts Doubt on the Putative Medical Malpractice "Crisis"

On the heels of a recently released Texas study that found no substantiation for the causal link claimed by tort "reformers" between medical malpractice payouts and rapidly escalating malpractice insurance rates, researchers investigating the situation in Florida have reached similar conclusions, according to a story in Tuesday's Palm Beach Post. Malpractice premiums in Florida have soared by 30% to 50% since 2000, but researchers from Duke found no increase in per capita claims since 1990. Large payouts went up, but so did the number of severe cases. Of the 801 payouts of $1 million or more since 1990, only 60 came from jury awards. The rest were negotiated settlements.

Your data must be faulty, say insurance industry spokesmen in response. You're not counting the costs of defending unpaid claims.

So now we have a new rallying cry for "tort reform": "Stop us before we spend millions more defending claims with settlement values of zero."

We're not naive. We used to work at a defense firm. We know it can cost good money to defend a meritless claim. At big firms in particular, meritless claims sometimes have a way of sticking around until no further conceivable excuse can be found for the next billable hour, and then sticking around some more.

But if the new argument from the insurers and the defense bar is going to be that the "crisis" is caused by the costs of defense of unpaid claims -- and there are indeed meaningful signs that this theme is gaining currency -- then we begin to wonder whether what's needed isn't so much "tort reform," as a hard look by the insurers (and their shareholders) at the monthly statements submitted by their outside counsel. Maybe the malpractice insurers are the ones who have gone and gotten themselves overlawyered.

Update 3/24/05: Tiberius weighs in from his perch at Ciceronian Review.