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The European Journal of Health Economics
Published in: The European Journal of Health Economics 8/2019

01-11-2019 | Original Research

Investigating medical malpractice victim compensation: micro-level evidence from a professional liability insurer’s files

Authors: Samantha Bielen, Peter Grajzl, Wim Marneffe

Published in: The European Journal of Health Economics | Issue 8/2019

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Abstract

We examine micro-level data on medical incidents recorded by a major Belgian professional liability insurer to identify the predictors of medical malpractice victim compensation. The data allow us to track each instance of suspect medical malpractice from the moment of insurer’s knowledge about the incident to file closure. We are, therefore, able to investigate the determinants of both the incidence and amount of indemnity payment while addressing the associated sample selection concerns. Conditional on some indemnity having been paid, provider specialty risk predicts the indemnity payment amount, but only via the effect of sustained injury type. We find little evidence of vertical or horizontal inequities in indemnity payment. Our results highlight previously overlooked features of the incident resolution process as quantitatively important predictors of victim compensation.
Footnotes
1
For a necessarily limited sample of contributions, overview of the literature, and further references on medical malpractice payments in the US, see, e.g. Rubin and Bishop [23], Studdert et al. [28], Orosco et al. [22], Jena et al. [18], Avraham [4], Farber and White [11], Sloan and Hsieh [25], Sloan et al. [26].
 
2
Sloan and Hsieh [25] implement Heckman’s [17] sample selection correction approach, but unjustifiably omit suspect malpractice cases that gave rise to no formal legal action and execute the estimation without an exclusion restriction, an inefficient approach giving rise to inflated standard errors.
 
3
Sloan and Hsieh [25] account for claimant, but not for defendant, legal representation. Sloan and Hsieh [25] also utilize a measure of the likelihood that the injury was avoidable. Their measure, however, is constructed on the basis of author-solicited ex-post responses of a panel of physicians and is therefore conceptually distinct from our insurer-appointed expert’s assessment of provider liability. Farber and White [12] utilize expert-provided assessments to construct a measure of care quality, but do not control for parties’ legal representation or legal insurance.
 
4
Elements of substantive information presented in this section draw on an analogous section in Bielen et al. [5].
 
5
Since September 2012, patients in Belgium may also file claims for compensation under a new ‘not-only-fault’ system administered by the government-sponsored Fund for Medical Accidents [29]. The new system became operational at the end of 2014. For the period of our study, the portfolio of claims processed by the professional medical malpractice insurer under consideration contains no claims channeled through the new system.
 
6
Rules of jurisdiction dictate that a lawsuit may be filed either at the court with jurisdiction over the geographic area of plaintiff’s residence or at the court with jurisdiction over the geographic area of the location of the incident.
 
7
In Belgium, there currently exists no specific legislation regulating medical malpractice victim compensation. The relevant provisions of the Belgian civil and criminal code offer no concrete guidance on the subject matter. To fill the resulting legal vacuum, some of the courts have attempted to develop their own unofficial guidelines for awarding damages. See De Callatay and Estienne [10] and Van Oevelen et al. [31].
 
8
Because judges are not obliged to distinguish between economic and non-economic damages, our data do not capture this distinction. This, however, comes without loss of generality given that our interest lies in explaining the determinants of total indemnity payments. Moreover, cases resolved via trial verdict are few (five percent of the sample), with plaintiffs awarded positive damages in only six of the cases.
 
9
That is, we compute average marginal effects on the left-truncated mean as the natural category of interest in our context (see, e.g. Cameron and Trivedi [6]: 552).
 
10
More specifically, high-risk specialties in our data are emergency medicine, anesthesiology and reanimation, gynecology and obstetrics, general surgery, neurosurgery, neurology, orthopedic surgery, plastic, reconstructive and aesthetic surgery, urology, and orthopedics. Medium-risk specialties are cardiology, dermato-venereology, internal medicine, ophthalmology, otorhinolaryngology, pulmonology, radiology, rheumatology, and stomatology. Low-risk specialties include physical medicine and rehabilitation, gastroenterology, geriatrics, clinical biology, oncology, nuclear medicine, pathological anatomy, pediatrics, psychiatry, radiotherapy, and general medicine.
 
11
The magnitude of the effect of low-risk category is statistically indistinguishable from the magnitude of the effect of medium-risk category. It is thus preferable to merge the two categories into one, low- to medium-risk, category.
 
12
Detailed results are available upon request.
 
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Metadata
Title
Investigating medical malpractice victim compensation: micro-level evidence from a professional liability insurer’s files
Authors
Samantha Bielen
Peter Grajzl
Wim Marneffe
Publication date
01-11-2019
Publisher
Springer Berlin Heidelberg
Published in
The European Journal of Health Economics / Issue 8/2019
Print ISSN: 1618-7598
Electronic ISSN: 1618-7601
DOI
https://doi.org/10.1007/s10198-019-01093-8

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