Today the Manhattan Institute’s Center for Legal Policy (with which I’m affiliated) released a major new paper by Alexander Tabarrok and Amanda Agan of George Mason University’s Department of Economics. It’s titled “Medical Malpractice Awards, Insurance, and Negligence: Which Are Related?” As summarized by my colleague Jim Copland this morning at Point of Law, Tabarrok and Agan reach the following conclusions:
1. They show that medical malpractice premiums are closely related to medical malpractice tort awards. …
2. They show that medical malpractice premiums are not explained by insurance industry price gouging. …
3. They show that medical malpractice tort awards are related to some factors not rationally related to injuries. …
4. They show that malpractice tort awards and thus insurance premiums can vary dramatically for reasons having little or nothing to do with negligence.