Professor Charles Silver’s research on tort reform reveals no cost savings to Medicare
A group of researchers including Charles M. Silver, the Roy W. and Eugenia C. MacDonald Endowed Chair in Civil Procedure at the School of Law, recently completed a study that found no evidence that “tort reform” for medical malpractice has resulted in cost savings.
The study’s results, “Will Tort Reform Bend the Cost Curve? Evidence from Texas,” were published in Volume 9 of the Journal of Empirical Legal Studies.
The researchers, who also included Myungho Paik and Bernard Black from Northwestern University School of Law and David A. Hyman of the University of Illinois College of Law, set out to test the claim that hard caps on malpractice damages would result in less “defensive medicine” and would thereby reduce overall healthcare spending.
To study this claim, the researchers looked at changes in Medicare spending after the State of Texas adopted tort reform in 2003. They compared Medicare spending in Texas counties with high claim rates to spending in Texas counties with low claim rates, before and after implementation of the 2003 law.
The researchers sum up their results in this way:
Pre-reform, Medicare spending levels and trends were similar in high- and low-risk counties. Post-reform, we find no evidence that spending levels or trends in high-risk counties declined relative to low-risk counties and some evidence of increased physician spending in high-risk counties. We also compare spending trends in Texas to national trends, and find no evidence of reduced spending in Texas post-reform, and some evidence that physician spending rose in Texas relative to control states. In sum, we find no evidence that Texas’s tort reforms bent the cost curve downward.
The team is also researching questions about the effect of tort reform on the number of physicians who are in practice. That research is forthcoming; a draft is available for comments on SSRN.
Will Tort Reform Bend the Cost Curve? Evidence from Texas, published on SSRN