Few aspects of American law provoke as impassioned a public debate as medical liability. Physicians, insurers, lawyers, consumer groups, and politicians frequently clash over the effectiveness, fairness, and costs of the medical liability system, with the din reaching a crescendo during periods of “malpractice crisis.” Notwithstanding the high degree of civic engagement on this issue, evidence suggests that the medical liability system and its effects on health care are not well understood by the public. In a recent poll, a majority of respondents expressed a belief that malpractice suits were effective in preventing medical errors and making doctors take better care of their patients, but a majority also felt that too many lawsuits were brought and that providers' liability should be limited.

This snapshot of public opinion nicely captures the cognitive dissonance about the malpractice system that characterizes the broader policy debate about tort reform. It also illuminates the need for empirically informed analyses of the system and its performance. In this chapter, we describe the structure of the medical liability system – what happens when a lawsuit is filed, what the system costs, and where the money comes from. We then review the best available evidence on how well the system performs its primary functions of compensation, deterrence, and corrective justice and how it affects the way health care is delivered in the United States.

STRUCTURE OF THE AMERICAN MEDICAL LIABILITY SYSTEM

The Litigation Process

American medical malpractice law revolves around the concept of negligence.