Ronen Avraham (Northwestern) and Max Schanzenbach (Northwestern) recently circulated a paper that will interest tort and health law scholars. In Impact of Tort Reform on Private Health Insurance Coverage, the authors use changes in private health care coverage as a proxy for the effect of the tort reform on health care costs. The authors draw on private health insurance coverage because reliable and stable measures of health care costs are not readily available over time and across states. A summary of the paper's findings, drawn from the abstract, follows.
"In triple-difference specifications, we find that reform generally increased health insurance coverage for the most price-sensitive groups (the young, the self-employed, and the single). We also find that those uninsured around the time of reform were more likely to obtain private insurance after reform. Given the multicollinearity of many reforms, it is difficult to gauge the impact of individual reforms. However, the evidence suggests that limitations on punitive and non-economic damages do not affect private insurance coverage, while caps on total damages, collateral source reform, and reforms to liability and payment structure are associated with increased private insurance coverage for price-sensitive groups. Accordingly, we conclude that some tort reforms are effective in reducing healthcare costs. The magnitude of the effects on price sensitive groups suggests that some tort reforms can reduce health care costs by as much as two percent."