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It's the Economy (and Combined Ratio) Stupid: Examining the Medical Malpractice Litigation "Crisis" Myth and the Factors Critical to Reform
Penn State Law Review (2004)
  • Mitchell J Nathanson
This article examines the recurring medical malpractice litigation crisis with an eye toward pinpointing the elusive source of the problem. My thesis is that these crises have recurred every decade or so and will continue to recur indefinitely because the root cause has never been specifically identified. As a result, it is no surprise that reform attempts have proven to be universally ineffective. It is my conclusion that malpractice litigation reform has repeatedly failed because, contrary to the widely held view, there has never been a medical malpractice litigation crisis, per se. Rather, there have been cyclical insurance crises through the years; crises that have more to do with fluctuations of the bond market than anything associated with medical malpractice litigation. This is not to suggest, however, that malpractice litigation costs in no way affect physicians’ premium rates, and, consequently, the availability of quality health care to the public. To the contrary, these costs significantly affect premium rates in years in which the bond market is weak. As a result, it is necessary that reform measures be taken which stabilize these costs in order to correct an insurance system which presently reacts violently in response to market fluctuations. This article examines both the traditional, widely held view regarding the root cause of the malpractice crisis which holds a perceived medical malpractice litigation explosion accountable, as well as the emerging view which focuses instead on the interplay of the insurance industry and the bond market, in order to determine the true cause of the problem. Next, it analyzes the most historically popular methods of reform (i.e., the imposition of jury verdict caps and the creation of medical malpractice screening/arbitration panels) in an attempt to explain why, despite good intentions, they have repeatedly failed. Finally, this article proposes a solution to the problem, one which responds to the root cause of these recurring crises.
  • medical malpractice,
  • health care,
  • litigation crisis,
  • tort reform,
  • insurance law
Publication Date
March, 2004
Citation Information
Mitchell J Nathanson. "It's the Economy (and Combined Ratio) Stupid: Examining the Medical Malpractice Litigation "Crisis" Myth and the Factors Critical to Reform" Penn State Law Review Vol. 108 Iss. 4 (2004)
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