Physicians and the risk of medical malpractice: The role of prior litigation in predicting the future

Abstract

This article examines the role of a physician’s prior experience in medical malpractice litigation in the resolution of current malpractice claims. We first use probability theory to show that if physicians are heterogeneous in the quality of care they practice, then a record of malpractice liability makes it more likely that the physician provides care of relatively low quality, and that if a malpractice claim is filed, it is more likely that the physician was in fact negligent in this case, and that the claim will be paid. We then show that this last result, which is testable, holds up when we analyze the resolution of medical malpractice claims filed in Michigan over the period 1982 to 1989. We find that malpractice liability, whether from an out-of-court settlement or through verdict of a court or arbitration panel, is significantly more likely when the defendant has a poor prior litigation record. The defendant’s litigation record is also positively and significantly related to the amount of a settlement payment, but not to an award made through trial or arbitration.