Does Tort Law Improve the Health of
Newborns, or Miscarry?
A Longitudinal Analysis of the Effect of
Liability Pressure on Birth Outcomes
YT Yang, DM Studdert, SV Subramanian, and MM Mello
Introduction
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Previous study results
A question arises…
Focus
Policy motivation
2
Empirical literature review
Literature
Findings
Limitations
Harvard Medical Practice
Study (HMPS) (1990):
Based on the review of over
30,000 randomly selected patient
records and malpractice claims
files in New York State in 1984,
researchers investigated the
association between hospitals’
past claims experience and their
current patterns of care and
adverse events rates.
Mixed findings.
Hospitals facing the highest malpractice claim
risk had per-patient hospital care costs that were
higher than the statewide average.
They considered this association evidence of
deterrent effect.
Yet, when other outcome measures of the impact
of claim risk on medical practice were used, no
statistically significant association was found.
The association found between
malpractice risk and increased
per-capita cost of services does
not necessarily reflect a
deterrent effect; instead, it
might be due to defensive
medicine and other phenomena.
HMPS reanalysis (Brennan et
al.) incorporated more
sophisticated outcome measures
for deterrence.
Mixed findings.
A statistically significant negative relation was
found for a model using the no. of adverse events
per 100 hospitalizations as the outcome variable
and the no. of claims against the hospital per
1000 discharges as the malpractice-risk measure.
But, none of the other models showed a
statistically significant deterrent effect.
Omitting significant “patientrisk factors that might lead
some hospitals to have higher
rates of adverse events than
others, even if they were
similarly prone to negligence.”
Taragin et al. (1995) conducted
an analysis of the association
between physicians’ past
malpractice claims experience
and their chances of being sued
again.
The hypothesized relationship (the experience of
being punished for negligence might reduce the
likelihood of subsequent lawsuits for negligence,
which would be suggestive evidence of a
deterrence effect) was found
Absence of lawsuits against a
physician does not necessarily
imply an absence of negligence,
because only a fraction of
patients injured due to
negligence file a claim
3
Empirical literature review (focus on health outcomes)
Literature
Findings
Kessler et al. (1996) compared
treatment of Medicare patients
for ischemic heart disease and
acute myocardial infarction
across time and states to assess
the impact of tort reform.
A reduction in provider
liability exposure via
tort reforms had no
statistically significant
effect on rates of
mortality or medical
complications of heart
patients.
Sloan et al. (1995) examined the
effects of malpractice risk,
measured by claims frequency
and payments per exposure year,
on obstetrical outcomes in
Florida.
No evidence to suggest
that higher malpractice
pressure leads to better
outcomes.
Dubay et al. (1999) used Apgar
score as an indicator of health
outcome to assess the effect of
premiums.
No significant
improvement in health
outcome.
Limitations
•CBO found that the study results could not be replicated for
other conditions.
•Used Medicare data; the elderly unlikely to sue; liability
pressure rather low;
•Only tort reforms
•Relied on a single cross-section of data from one state.
•Adverse outcomes within 5 yrs of birth, is a poor measure,
since health status several years after birth may be influenced
by pediatrician behavior or other factors, in addition to OB’s
care.
•Apgar scores are a crude measure of morbidity of the newborn
and may not provide all the relevant information on adverse
outcomes.
•Premium data were acquired through an Urban Institute
survey, the quality and completeness of which have not been
ascertained by other analyses.
•Employed time and place fixed-effects to estimate withinplace changes by removing between-place variations; however,
given the short study period (2 years), there may not be
sufficient within-place variation to estimate.
4
Conceptual framework & Model specification
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Main hypothesis
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Unit of analysis
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Proxy for substandard obstetric care
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Longitudinal multilevel mixed-effect model
Yijk = Xijkβ + Z ijk uk + Z ijk u jk + εijk
( 3)
( 3)
(2)
(2)
5
Data Structure
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Data can be viewed as a series of 12 repeated measures for each
of the 51 jurisdictions.
Added a level of region, according to U.S. census divisions, to
adjust for potential regional effects on outcome variables.
6
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Dependent variables
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Data
Five outcomes
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Birth injury: impairment of the infant’s body function or structure
due to adverse influences that occurred at birth per 1,000 live births.
Low 5 min-Apgar score: having a 5-min Apgar score of less than 7
per 100 live births.
Low birthweight: weight of less than 2,500 grams at birth per 100
live births.
Preterm: Born before 37 completed weeks of pregnancy per 100 live
births.
Infant mortality: the rate at which babies less than one year of age
die per 1,000 live births.
Maternal mortality: the annual number of deaths of women from
pregnancy-related causes per 100,000 live births.
Low 5-min
apgar
score
Low birthweight
Preterm
birth
Infant
mortality
Maternal
mortality
Birth
injury
Mean
1.5
7.4
11.2
7.7
9.5
0.3
Std. Dev.
0.3
1.5
1.9
1.8
5.2
0.3
7
Trend in Low Birthweight
5
1
No. per 100 Live Births
10
No. per 100 Live Births
1.5
2
2.5
15
3
Trend in Low 5-min Apgar Score
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Trend in Birth Injury
0
5
No. per 100 Live Births
10
15
No. per 1000 Live Births
.5
1
1.5
2
20
Trend in Perterm Birth
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Trend in Maternal Mortality
0
5
No. per 1000 Live Births
15
10
No. per 100000 Live Births
10
20
30
20
40
Trend in Infant Mortality
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
8
Main explanatory variables
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Premiums:
MLM data
 weighted according to insurers’ market shares and
the geographic distribution of physicians within the
state.

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Tort reforms:
data from NCSL, ATRA, and MC&L.
 Dummy variables to account for the tort reforms.
 Data lagged by one year after implementation.

9
0
50,000
Premiums
100000
150000
Trend in US OB/GYN Malpractice Premiums
&
2002 US OB/GYN Malpractice Premiums: National View
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
10
Malpractice tort laws considered in analysis
Reform
Description of reform
Numbers of jurisdictions with the
reform
1991
2002
Attorney Fee Limits
The proportion of an award that an attorney can
contractually charge is statutorily capped at a
specific level.
20
25
Collateral Source Rule
Damages payable in a malpractice suit are statutorily
reduced by all or part of the dollar value of
collateral-source payments to the plaintiff.
29
35
Damage Caps: punitive only
Punitive damages are capped at a statutorily
established dollar amount.
7
19
Damage Caps: non-economic =<
250,000
Either non-economic, total damages or both types of
damages are capped at a statutorily established dollar
amount.
3
3
Damage Caps: non-economic 250,001 500,000
5
6
Damage Caps: non-economic or total
>500,000
8
11
Expert Witness Rule
Experts must be appropriately credentialed and
experienced with the standard of care in the case.
18
32
Joint and Several Liability Rule
The Joint and Several Liability rule is abolished
either for non-economic or total damages in all
claims, such that damages payable in a malpractice
suit are statutorily allocated in proportion to the
tortfeasors’ degree of fault.
29
33
Periodic Payment of Awards
Part or all of the damages are permitted or must to be
disbursed in the form of an annuity that pays out
over time.
27
29
Pretrial Screening
A voluntary or mandatory panel to identify nonmeritorious professional negligence claims.
24
31
11
Other explanatory variables: Provider factors
Variable (Mean/ Std. Dev.)
Significance/ Hypothesis
Data source
HMO penetration rate (18.3/
12.6)
The direction of the effects is
unclear, there is enough
literature to suggest that
attempts should be made to
control for the penetration of
for-profit hospitals and managed
care organizations in a model
predicting health outcome.
Morgan Quito Press using data
from InterStudy Publications
Limitation: relatively coarse
measure and not likely to fully
account for the potential
influence of managed care.
Urban hospitals (49.8/ 25.7
Urban hospitals also tend to
have more resources specifically
earmarked for quality
improvement.
Hospital Statistics of AHA
Non-physicians(7.3/ 4.9)/ nonhospital births(1.1/ 0.9)
ACOG found that out-ofhospital births attended by
midwives have an increased risk
NDF (birth certificates)
Investor-owned hospitals
(11.9/ 11.7)/ not-for-profit
hospitals (63.4/ 24.7)
12
Other explanatory variables: Medical risk factors
Variable (Mean/ Std. Dev.)
Significance/ Hypothesis
Data source
Adequate/ adeq+ prenatal care
(72.8/ 6.9)
Adequate prenatal care is widely
believed to improve pregnancy
outcomes, though many studies have
found weak or no effects of prenatal
care on birth outcomes.
NDF (birth certificates)
adequacy of prenatal care is measured
using the Adequacy of Prenatal Care
Utilization Index
Female Obesity (16.8/ 3.8)
CDC’s Behavioral Risk
Factor Surveillance
System (BRFSS).
Multiple births (2.8/ 0.5)
Births to women over 35 years old
(11.5/ 3.4) / teen births (12.4/ 3.3)
Tobacco use(14.9/5) /alcohol use
(1.6/1.2)
More poor outcomes
NDF (birth certificates)
4 principal components computed
from 14* underlying medical risks
of high-risk pregnancy & C/Section
*abruptio placenta, breech birth, ephalopelvic disproportion, chronic hypertension, cord prolapse, diabetes, dysfunctional
labor, eclampsia, excessive bleeding, fetal distress, incompetent cervix, placenta previa, pregnancy-associated hypertension,
and prolonged labor
13
Other explanatory variables: Socioeconomic factors
Variable (Mean/ Std. Dev.)
Significance/ Hypothesis
Data source
Per-capita income ($10,000)
Bureau of Economic Analysis
Employment-based (61.6/6.2)
Medicaid (10.8/ 3.4)
No insurance (14/ 4)
U.S. Census Bureau’s health
insurance data
Limitation: population insurance
rates not childbearing aged female
insurance rates
(2.73/0.45)
•
There is evidence linking lower
maternal socioeconomic status to
poor birth outcomes.
Minority births (20/ 14.8)
NDF (birth certificates)
Births to women with college
education (22.6/ 6.4)
NDF (birth certificates)
Interactions:
Because the impact of prenatal care on birth outcomes may be dependent on socioeconomic factors, we explored several
potential interaction effects between prenatal care and socioeconomic factors, such as prenatal care and per-capita income,
prenatal care and minority births, and prenatal care and insurance status.
The effect of managed care on birth outcomes may vary with socioeconomic status, as worse outcomes have been
detected in poor enrollees in HMOs. Therefore, we examined an interaction term between HMO penetration and percapita income.
14
Time trend
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Polynomial trends
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“Centering” time
15
Results: Effects of malpractice premiums
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Overall, the results provide no evidence of a deterrent
effect of liability pressure.
The coefficient and p-value of premiums for each of
the outcome variables are as follows:
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low 5-minute Apgar score: -0.02, p=0.16;
low birthweight: 0.02, p=0.43;
preterm birth: 0.02, p=0.51;
birth injury: -0.02, p=0.15;
infant mortality: -0.01, p=0.88;
maternal mortality: -0.15, p=0.53.
Main drivers?
16
Results: Effects of tort reforms
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No evidence that any of the tort reforms were
associated with significant changes in the rates of the
measured adverse birth outcomes.
For instance, the coefficient and p-value of caps on
noneconomic damages set equal or below $250,000 for
each of the outcome variables are as follows:
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low 5-minute Apgar score: -0.13, p=0.09;
low birthweight: 0.18, p=0.27;
preterm birth: 0.31, p=0.23;
birth injury: -0.01, p=0.16;
infant mortality: -0.05, p=0.90;
maternal mortality: 1.7, p=0.22.
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Discussion and policy implications

Deterring medical negligence?
The hypothesis rejected
 Effects are not evident.
 Reforms do not result in worse birth outcomes.
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Procedure rate variations justifiable?
Previous results
 Combined with the results here
 These findings suggest…
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18
Rebuttals against probable methodological reasons for the
failure to detect a potential deterrent effect
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Inadequately measured the malpractice
pressure?
Aggregated state-level data may have
attenuated the relationship?
Adverse birth outcomes are an inappropriate
proxy for substandard obstetric care?
19
Barriers to deterrence
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Externalization of the costs of negligence
reduces the economic incentive to improve
quality of care.
Poor fit between negligent practice and
malpractice claims results in inconsistent
incentives to providers to improve care.
Discordance between the current tort system
and what is known about medical errors.
20