Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 4. Negligence Standard
rates. Nor is it clear, though it can be hard to say so, that these departures are always a bad thing.
Perhaps because of the pervasiveness of third-party-payer fee-for-service health care, or perhaps
because of the small size of medical malpractice costs as a fraction of health care costs generally,
rising premiums seem not to have had an effect on the supply of physicians, despite widespread
anecdotal evidence to the contrary.
Consider also the data from Texas, which in 2003 adopted a series of tort reform measures
to protect physicians from medical malpractice claims and thereby diminish a perceived incentive
for doctors to leave the state. The measures certainly succeeded in reducing physicians’ liability:
between 2003 and 2009, Texas saw a 70 percent drop in payouts on medical malpractice claims.
David A. Hyman, et al., Does Tort Reform Affect Physician Supply? Evidence from Texas, 42
INT’L REV. OF L. AND ECON. 203, 203 (2015), https://perma.cc/QWM9-RWT7. And sure enough,
the number of physicians applying for and receiving medical licenses in Texas increased after
2003, a cause for celebration for many tort reform supporters. But is correlation necessarily
causation here? A 2015 study says no, finding “no evidence that the number of active Texas
physicians per capita is any larger than it would have been without tort reform” and that increases
in the number of doctors in Texas after 2003 were more likely the result of other forces, such as
increasing numbers of physicians nationwide and an influx of doctors moving to Texas after
Hurricane Katrina. Id. at 204.
4. Medical malpractice and health care costs. According to a 2010 publication, the costs of
the medical liability system amount to $55.6 billion per year, or 2.4% of the United States’ total
health care expenditures. Michelle M. Mello, Amitabh Chandra, Atul A. Gawande & David M.
Studdert, National Costs of the Medical Liability System, 29 HEALTH AFFAIRS 1569 (2010). The
authors of the study included in that figure $45 billion in so-called defensive medicine, which they
defined as “tests, procedures, or visits, or [decisions to] avoid certain high-risk patients or
procedures, primarily (but not solely) because of concern about malpractice liability.” Defensive
medicine includes “supplemental care, such as additional testing or treatment; replaced care, such
as referral to other physicians; and reduced care, including refusal to treat particular patients.”
Lee Black, Health Law: Effect of Malpractice Law on the Practice of Medicine, 9 AM. MED.
ASS’N J. ETHICS 437, 437 (2007). But as the authors of the Health Affairs study emphasize, there
are at least two problems with their defensive medicine estimate. First, it is exceedingly difficult
to distinguish defensive care from care that has been caused by incentives to provide more care
that are inherent in the third-party payer system; any estimates of the costs of defensive medicine
must therefore be treated with great caution. Second, the estimate tells us nothing about either the
benefits (or perhaps additional harms) for patients of the additional care produced by the threat of
malpractice suits. After all, one of the aims of tort law is to incentivize sensible expenditures on
safety. One thing that seems clear is that absent such complicated questions about the costs of
altered care, the cost of medical malpractice premiums themselves is a tiny fraction of the costs of
the health care system generally. See The Medical Malpractice Scapegoat, PUB. CITIZEN 5 (Feb.
28, 2017), https://perma.cc/3PZZ-RETN (noting that in 2015, medical malpractice payments on
behalf of doctors amounted to about 0.2 percent of costs for hospital and physician services and
about 0.1 percent of all healthcare costs).
5. How important really is medical malpractice reform to doctors? Even though the
American Medical Association (AMA) has taken strong public positions in favor of malpractice
reform to reduce malpractice costs, the AMA apparently did not make malpractice reform a
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