Zabinski and Black, ‘The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform’

ABSTRACT
We examine whether caps on non-economic damages in medical malpractice cases affect in-hospital patient safety. We use Patient Safety Indicators (PSIs) – measures of adverse events – as proxies for safety. In difference-in-differences (DiD) analyses of five states that adopt caps during 2003-2005, we find that patient safety gradually worsens after cap adoption, relative to control states. Standard DiD inference can be unreliable with a small number of treated units. We therefore develop a randomization inference-based test for DiD statistical inference with few treated units but multiple, potentially correlated outcomes, and confirm statistical strength with this nonparametric approach.

Zabinski, Zenon and Black, Bernard S, The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform (January 21, 2019). Northwestern Law and Econ Research Paper No 13-09.

First posted 2019-02-05 07:13:06

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