There seems to be a persistent belief among conservatives that medical malpractice litigation is the reason healthcare is so expensive in the US. Presumably, costly litigation leads to costly insurance, which in turn does two things. One is that it causes doctors to perform a lot of un-necessary mumbo-jumbo but which is intended for CYA purposes. The other is that drives doctors out of the profession.
The National Center for State Courts provides data on incoming medical malpractice per 100,000 population in 2005 for twelve states (plus Puerto Rico) which they considered to be comparable. (All data used in the post is in the table toward the end.)
The Statistical Abstract of the United States contains data on
number of doctors per 100,000 population in 2003 for the twelve states (but not Puerto Rico).
We find a correlation in the neighborhood of 50% for all twelve states, and similar correlations when the sample is broken up into unified courts and general jurisdiction courts. Regular readers know I have no love for the legal profession, and though this is limited data, it really doesn’t seem more litigation results in fewer doctors. In fact, (and its tough to impute causality on such data), the best story I can tell is that there is more litigation when there are more doctors, which may well be consistent with the notion that in general, the medical malpractice suits that are filed have merit despite some severe outliers.
What about costs? The closest thing I was able to find on a state basis were the cost of an average hospital stay for 2003- from Table 162 of the hardcopy (sorry – I can’t find it online without having to pay for it) of the Statistical Abstract of the United States for 2006.
So how do those costs correlate with malpractice cases? In the three states with a unified court system, about 48%. In the nine without, about -36%. Including all twelve… -6%. Put another way… it really doesn’t seem like hospital costs are higher in states where there are more malpractice cases. They seem to be marginally lower.
One final thing we can do with the data… how do costs correlate with number of doctors? Again… results differ for unified courts and general jurisdiction court states, but including all twelve states results in a 38% correlation between costs and doctors. So either doctors are attracted to states in which costs are high (perhaps because doctor salaries are part of the costs), or costs tend to be higher when there are more doctors (perhaps because more doctors means more specialists).
In any case, what the data doesn’t seem to show is any evidence supporting the conservative position that the cost of healthcare is high because of litigation.