Does Medical Malpractice Reform Increase Physician Supply? Evidence from the Third Reform Wave is the latest installment of a series of papers assessing medical malpractice reforms and their implications for (and on) doctors. In the paper, Myungho Paik (Hanyang Univ.), Bernie Black (Northwestern), and David Hyman (Illinois) find little evidence that caps on non-economic damages influence physician supply. The abstract follows.
"Nine states adopted caps on non-economic damages during the third medical malpractice (“med mal”) reform wave” from 2002-2005, joining twenty-two other states with caps on non-economic or total damages. We study here the effects of these reforms on physician supply. Across a variety of difference-in-differences (DiD), triple differences, and synthetic control methods, we find no evidence that cap adoption predicts an increase in total patient care physicians, in specialties that face high med mal risk (except plastic surgeons), or in rural physicians. Consistent with this analysis, we also find no association between med mal claim rates and physician supply in state and county fixed effects regressions over 1995-2011. We reconcile our results to two prior papers that find evidence of an increase in physicians in high-risk specialties."