Representatives, Committee on the Judiciary, February 29, 2003. 31 Brett Chase, “Ill. insurer fights off challenge in board election,” Crain’s Chicago Business (April 14, 2005). 32 E.g., Md INSURANCE Code Ann. § 11-205. 33 Ch. 5, Acts 2004 Sp. Sess., effective January 11, 2005. 34 Supra note 15. 35 State of Nevada 2004 General Election Results – November 2, 2004, posted at http://sos.state.nv.us/nvelection/2004General/Electi onSummary.htm. 36 “Oklahoma Lawmakers Approve File-and-Use Bill for Commercial and Personal Lines,” Bestwire (June 1, 2004). 38 S. Spurr, S. and W. Simmons, W. 1996. "Medical Malpractice in Michigan: An Economic Analysis." Journal of Health Politics, Policy and Law 21(2) (1996): 315-46. 39 Catherine T. Struve, Expertise in Medical Malpractice Litigation: Special Courts, Screening Panels, and Other Options, (Pew Project on Medical Liability, 2003). 40 See, e.g. Deborah R. Hensler, “Does ADR Really Save Money? The Jury's Still Out,” The National Law Journal, (December 21, 1994). 41 Edward Dauer et al, “Transformative power: M Potential Impacts of Federal Medical Malpractice Interventions An assessment based on available evidence Prepared by Arthur Kellermann and Jim Dertouzos RAND Corporation May 9, 2011 There is an extensive body of empirical literature on the impact of medical malpractice (MM) on the U.S. health care system. Although direct payment of claims represents a small share of total health care costs, some argue that MM has a much larger impact on health care by giving physicians incentives to provide unnecessary treatment—a phenomenon termed “defensive medicine.” The evidence generally suggests that policy interventions that reduce MM liability tend to reduce health care costs to some degree, but the impact on patient care is mixed. Some studies have found that the threat of malpractice lawsuits promotes safer care and therefore better patient outcomes, but other studies have found no effect. It is difficult to definitively answer the question of whether MM statutory tort interventions are effective in achieving their specific aims (e.g., in reducing the incidence of litigation, associated pay-outs, insurance premiums) or whether such laws produce unintended consequences (e.g., reducing the deterrence of negligence). In this memo, RAND researchers provide a thumbnail review of the empirical literature on the potential costs and benefits of several types of MM reform policies, specifically in connection with several potential and proposed aspects of federal tort interventions. The proposals addressed in this memo include the Help Efficient, Accessible, Low-Cost, Timely Healthcare Act of 2011, “The HEALTH Act,” (H.R. 5) and proposals made by the National Commission on Fiscal Responsibility and Reform and through the President’s Budget for Fiscal Year 2012. Because many of the reforms in H.R. 5 have been implemented at the state level, there is some empirical evidence on the potential effectiveness of at least some of its elements. By contrast, the alternative proposals have not been previously adopted or evaluated at the state level, so there is a more limited basis for evaluating the proposals’ effectiveness. This makes a direct, evidence-based comparison of the relative merits of the proposals impossible. In general, considerably more evidence is needed to fully understand the potential impact of any comprehensive reform of the medical liability system. The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. Consistent with that charter, RAND does not engage in advocacy work. The intent of this memo is not to advocate for a particular outcome. Rather, it is to provide a resource, rooted in objective research findings, to inform federal policymakers and other interested parties. Additional background information, including a detailed discussion of the empirical literature on statutory tort reform, can be found on the RAND COMPARE website. Please contact Jesseca Boyer at Jesseca_Boyer@rand.org or 703-413-1100 x5196 with any questions or for further information. 2 Potential Impact of H.R. 5 Provisions H.R. 5 would establish a new statute of limitations, caps on noneconomic and punitive damages, modification of the joint-and-several liability rule, and caps on attorneys’ contingency fees. Many of the provisions in H.R. 5 are similar in substance to the 1975 California Medical Injury Compensation Reform Act (MICRA). Different versions of these proposals have been enacted by other states, usually with the common aims of reducing the occurrence of MM litigation and associated costs, curbing the practice of defensive medicine, and alleviating shortages in the supply of specialty services associated with higher liability risk. According to the National Council of State Legislatures, as of September 2010, 35 states had enacted caps on damages, 14 had enacted specific percentage limitations on attorney contingency fees, and 24 had enacted some alternative to the joint-and-several liability rule (NCSL, 2010). The liability restrictions in MICRA, particularly the $250,000 cap on noneconomic damages with no adjustment for inflation, are generally considered among the strictest in the country. Nevertheless, because a number of states already impose their own liability limitations, if enacted, H.R. 5