Courts, Scheduled Damages, and Medical Malpractice Insurance

Paola Bertoli, Veronica Grembi

Research output: Working paperResearch

Abstract

We assess the impact of the introduction of schedules of non-economic damages (i.e. tiered caps systems) on the behavior of insurers operating in the medical liability market for hospitals while controlling the performance of the judicial system, measured as court backlog. Using a difference-in-differences strategy on Italian data, we find that the introduction of schedules increases the presence of insurers (i.e. medical liability market attractiveness) only in inefficient judicial districts. In the same way, court inefficiency is attractive to insurers for average values of schedules penetration of the market, with an increasing positive impact of inefficiency as the territorial coverage of schedules increases. Finally, no significant impact is registered on paid premiums. Our analysis sheds light on a complex set of elements affecting the decisions of insurers in malpractice markets. The analysis questions whether schedules of non-economic damages, as well as other limitations on compensations to medical malpractice victims, are an effective way to improve the payoff of health care providers.
Original languageEnglish
Place of PublicationMilan
PublisherUniversità Commerciale Luigi Bocconi
Number of pages40
DOIs
Publication statusPublished - 2013
SeriesBAFFI Center Research Paper
Number2013-145

Cite this

Bertoli, P., & Grembi, V. (2013). Courts, Scheduled Damages, and Medical Malpractice Insurance. Milan: Università Commerciale Luigi Bocconi. BAFFI Center Research Paper, No. 2013-145 https://doi.org/10.2139/ssrn.2367218