Male and Female Recoveries in Medical Malpractice Cases

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Male and Female Recoveries inMedical Malpractice CasesWalter Simmons a & Rosemarie Emanuele ba John Carroll University , University Heights, Ohio,USAb Ursuline College , Pepper Pike, Ohio, USAPublished online: 18 Feb 2007.

To cite this article: Walter Simmons & Rosemarie Emanuele (2004) Male and FemaleRecoveries in Medical Malpractice Cases, Review of Social Economy, 62:1, 83-99, DOI:10.1080/0034676042000183844

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Male and Female Recoveries in Medical

Malpractice Cases

Walter Simmons1 and Rosemarie Emanuele21John Carroll University, University Heights, Ohio 2Ursuline

College, Pepper Pike, Ohio

Abstract This study analyzes male and female recovery resulting from medical

malpractice injuries to discern the importance to the recovery differential ofgender differences in recoveries for medical malpractice injuries. We find thatthe pattern of recoveries follows one similar to that found in studying wagedifferentials between males and females. Differences in the relative

magnitudes of foregone earnings and nonmarket loses are reflected in thecomposition of recoveries. In addition, we find a recovery gap in whichfemales receive substantially less in recoveries when they receive male’s

average compensation for medical malpractice injuries. However, only asmall portion of the male and female recovery differential is explained by thecharacteristics of the claims, leaving a substantial portion of the differential

unexplained.

Keywords: malpractice, litigation, recoveries, decomposition

INTRODUCTION

The growth in the number and size of medical malpractice claims has been a

major public policy issue for almost thirty years. Concern over the issue led to

two national malpractice insurance crises in the mid 1970s and 1980s, and a

variety of tort reforms. The legislative reforms, which were enacted in all 50

states and the District of Columbia, addressed a variety of problems such as,

alternative dispute resolution mechanisms, certificates of merit, limits on

attorney fees, public access to National Practitioner Data Bank information

on repeat offenders, collateral source offsets, periodic payment of awards,

limits on damage awards, use of clinical practice guidelines, and enterprise

liability. Medical malpractice litigation has become one of the largest

REVIEW OF SOCIAL ECONOMY, VOL. LXII, NO. 1, MARCH 2004

Review of Social Economy

ISSN 0034 6764 print/ISSN 1470–1162 online# 2004 The Association for Social Economics

http://www.tandf.co.uk/journals

DOI: 10.1080/0034676042000183844

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components of the tort system and is widely held responsible in part for the

high cost of health care both because its expense is passed along directly in

insurance rates and because it compels physicians to practice costly defensive

medicine (Harvard Medical Practice Study 1991).

There is now a substantial body of work that evaluates the effects of tort

reform legislation and other variables on medical malpractice legislation.

Danzon (1984, 1986) analyzed the contributions of various factors, including

tort reform laws, to changes in the frequency and severity of malpractice

claims over time and across states. Sloan et al. (1989) used malpractice cases

throughout the United States to analyze the effects of various tort reform laws

on the probability that there will be a recovery, the amount of the recovery,

and the time required for a claim to be resolved. Coyte et al. (1991) studied the

determinants of the frequency and severity of Canadian malpractice claims.

Barker (1992) used statewide data to analyze the effect of tort reforms on the

relative price of malpractice insurance. Farber and White (1991), analyzing

malpractice claims against a single hospital, found that the quality of medical

care was important in determining malpractice liability, whether there is a

recovery and, if so, the amount paid. Bovbjerg (1989) provides a useful survey

of all types of legislation that have affected medical malpractice; laws

concerning insurance regulation, the quality of medical care, and tort reform.

Despite the enormous public and legislative interest about medical

malpractice claims, developments in legal doctrines and legal procedures

have not been able to comprehensively address the variety of medical

malpractice problems. Research on the connection between negligent medical

care and legal liability is essential in improving equitable fault determination

and standards. There are several commonly held beliefs about the current

legal processes relating to medical liability and malpractice. One theory

proposes that lay juries are not capable of fact-finding in complicated medical

cases. Another speculates that procedural rules and requirements for

establishing legal causation are overly complex and do not include the

scientific methodology necessary for accurate determination of medical

causation, while yet another says that the legal process does not effectively

reject merit less claims, while significant numbers of individuals injured by

negligent medical care do not file claims. Other theories claim that

compensation awards to persons injured by negligent medical care are not

equitable, consistent, efficient, or predictable.

One of the issues that have not been at the forefront of the medical

malpractice debate is the gender difference in recoveries resulting from

medical malpractice claims. In fact, relatively little empirical analysis and

public debate have addressed the issue of gender differences in medical

REVIEW OF SOCIAL ECONOMY

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malpractice recoveries. Indeed, malpractice litigation and the recoveries

resulting from them continues to be controversial. One of the main functions

of the litigation system in resolving medical malpractice claims is to deter

injuries and to compensate victims. Calculations of damages resulting from

medical negligence are expected to follow general rules (Brookshire 1987,

Blumstein et al. 1991). In determining individual loss factors such as market

loss, non-market loss, and pain and suffering are considered. However, the

tort system expects the litigation process to avoid the over and under

estimates of loss. Although calculations of damages are expected to follow

general rules, the lack of detailed information to guide the calculation of

damages, coupled with the fact that many assumptions underlie almost any

calculations of loss can result in extremely varied outcomes across

comparable cases. Such variability introduces inequities in recoveries and

may also encourage nuisance suits (Cooter and Rubinfeld 1989).

The issue of whether there is a difference between recoveries in similar cases

involving men and women should provide some insights and implications

about the efficiency and fairness of the medical malpractice system. If such a

difference exists, it may arise from different opportunity costs for time by men

and women or a difference in life expectancies. It may, however, indicate a

difference in the value society puts on the lives and livelihood of women. A

difference in life expectancies would tend to give women greater recoveries,

while differences in opportunity costs would tend to give women smaller

recoveries. Whether there is a differential, and if so, in what direction, is

therefore an empirical question. We examine the data to determine if the

litigation system may perceive the opportunity cost of women and men

differently, and award substantially different amounts for similar medical

malpractice injuries. We also evaluate the merits of the litigation system in

terms of its fairness in disposing of medical malpractice claims.

OVERVIEW OF THE MEDICAL MALPRACTICE SYSTEM

The story of the medical malpractice insurance crisis has been at the forefront

of health care debates and tort legislation over the past three decades. The

American Medical Association (AMA) estimated that as recently as the late

1950s only one doctor in seven had ever faced a malpractice claim in their

entire professional career. In general, large recoveries were uncommon, and

malpractice insurance premiums were affordably priced. Policymakers started

to take notice of medical malpractice insurance problems in the late 1960s, as

insurance and medical professionals became concerned about the rising

frequency of claims and costs of insurance. Congressional hearing resulted,

MALE AND FEMALE RECOVERIES IN MEDICAL MALPRACTICE CASES

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and an executive commission was convened, but found no crisis (Bovbjerb

1989). The first major malpractice crisis was declared in 1974 – 75. Many sets

of interrelated events initiated the problems and compelled public attention.

For reasons that are still poorly understood, the frequency and severity of

malpractice claims, which had risen only modestly through the 1960s,

increased sharply in the mid 1970s.1 During that period many medical

malpractice insurance companies withdrew from the market or announced

very large price increases. Some physicians in states such as California and

New York could not find coverage at virtually any price. The lack of

availability forced many physicians to seek regulatory relief from rate hikes as

well as reform of tort law and the liability insurance system. The mid to late

1970s saw an abundance of tort legislation across the country. However, in

the mid 1980s another component of medical malpractice problems emerged.

Some believe that the problems in the 1980s were more one of ‘‘affordability’’

than of availability. In the 1980s the problems of non-medical insured’s were

at center stage. Day care centers, liquor stores, city council members, and,

most ordinary seekers after liability insurance were finding coverage

expensive and difficult to obtain (Bovbjerb 1989). In the 1990s the problems

of increased frequency and severity persisted but emphasis shifted to problems

such as the quality of care, and issues such as defensive medicine, caps on

recoveries, alternative disposition methods, and physicians’ fees and incomes

became the dominant theme.

In general, the medical malpractice problems over the past three decades

resulted in all 50 states passing some form of legislations to address problems

such as, insurance availability, medical quality, and legal rules and process.

However, there are some persistent issues that remain prominent. Empirical

analysis has shown strong effects from some of the changes, such as

limitations on recoveries, but the issue of fairness to claimants and others with

medical malpractice injuries is still unresolved. The analysis in this study

provides some evidence and implications about gender differences in medical

malpractice recoveries.

DATA DESCRIPTION

The data analyzed in this study consist of closed medical malpractice claims

from the Michigan’s Bureau of Health Services (MBHS). Since 1987, the

Michigan Legislature has required all medical malpractice insurers, self-

1 During the early 1970s insurers’ investment earnings unexpectedly fell because of the first oil crisis and the

decline in the stock and bonds market. (Bovbjerb 1989).


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insurers, and both plaintiffs’ and defendants’ attorneys to file closed claims

with the MBRS Malpractice Unit. Michigan’s experience is important

because it is somewhat average. Its experience is a microcosm that closely

reflects the changes in medical malpractice litigation that occurred through-

out the United States during the period covered by the data. As was noted in

the previous section, nearly all states went through the same phases of an

initial malpractice crisis from 1974 – 75, when commercial insurers withdrew

from the market, and during a subsequent crisis in the 1980s resulting from

substantial increases in the frequency and severity of claims. In effect, our

study of gender differences in medical malpractice recoveries in Michigan

provides an economic analysis of gender differences in medical malpractice

claims in the United States as it evolved during the period of the data.

Moreover, the issue that we consider here, gender differences in medical

malpractice recoveries, transcends state borders.

The data set which contains information on cases that were closed between

1986 and 1991, provides detailed description about the characteristics of the

dispute and disputants, such as the name and license number of the

defendants, the severity of the injury, the type of insurance the claimant

had, the amount of recovery, and the manner in which the claims were

resolved. A description of the variables and their respective means are

presented in Table 1.

Severity of injury is measured on a 9-point scale. Level 1 (emotional

distress only) is the least severe type of injury and level 9 (death) the most

severe. In general, the amount of recovery is likely to be higher for more severe

injuries from which medical expenses and loss of income are greater than in

less severe cases. For cases resulting in death, the future medical expenses are

zero, so damages are expected to be lower than in cases involving more serious

types of injuries such as those labeled as permanent grave. Table 1 shows that

awards for both female and male increased with the higher levels of severity.

Plaintiffs who suffered permanent major and grave injuries were awarded

larger damages than death cases, because of the higher opportunity cost of

lost wages and future medical costs. The findings here are consistent with

those of other studies. For example, a Harvard Medical study (Taragin et al.

1992) found that the amount of recovery for malpractice claims correlated

closely with the severity of injury, even when the 9 levels of severity were

grouped as low severity, medium severity, and high severity levels.

We coded three dichotomous indicators to represent Medicaid, Medicare,

and Private insurance, with other or no insurance as the reference group. We

belief that these variables should be related to the plaintiff’s level of income.

Payment by Medicaid may indicate a low income, and payment by health


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Table 1: Variables, Definitions and Descriptive Statistics

Mean Recovery Mean Recovery

Males Females

Variable Variable Description (XM) (XF)

Emotional only Fright, no physical

damage.

10.5882 9.2204

Temporary

insignificant

Lacerations,

concussions, minor

scars, rash. No delay.

8.5115 8.6678

Temporary

minor

Infections, misset

fracture, fall in hospital.

Recovery delayed.

9.6460 9.7517

Temporary

major

Burns, surgical material

left, drug side effect,

brain damage.

10.2846 10.2499

Permanent minor Loss of fingers, loss of

damage to organs, non-

disabling injuries.

10.3699 10.5580

Permanent

significant

Deafness, loss of limb,

loss of eye, loss of

kidney or lung.

11.1700 11.2790

Permanent major Paraplegia, blindness,

loss of two limbs, brain

damage.

12.1790 11.7836

Permanent grave Quadriplegia, severe

brain damage, lifelong

care or fatal prognosis.

12.6463 12.4892

Death Injury resulted in death. 11.2101 11.6159

Age Plaintiff’s age. 11.0660 11.0150

Mediation Case was resolved

through mandatory

mediation.

10.2358 10.2665

Negotiated

Settlement

Case was resolved

through negotiated

settlement.

11.1763 11.1454

(continued overleaf )


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insurance will generally indicate a high income. Using the type of insurance as

a proxy for income introduces the possibility of measurement error, thus

interpretation of this variable should consider this limitation. For example,

the insurance types can also proxy age (although this is included as a direct

measure), disability, and being in certain industries or having certain pre-

existing conditions that make it difficult to obtain private health insurance.

More specifically, the insurance coverage of a plaintiff may be associated with

the employment of the spouse. Hence, a worker in a low paying job may have

excellent health coverage (private insurance) as a result of a high paying job

for the spouse. The results in Table 1 show that men with Medicaid and

private health insurance received larger awards than women. However,

women with Medicare and other types of insurance received larger mean

awards.

The size of the award should be positively related to the life expectancy of

the plaintiff. Ceteris paribus, we can expect younger plaintiffs to receive larger

recoveries than older plaintiffs. Three variables capturing the manner in which

a malpractice claim is resolved are included as independent variables. A claim

Table 1: (continued )

Mean Recovery Mean Recovery

Males Females

Variable Variable Description (XM) (XF)

Trial Verdict Case was resolved

through trial.

11.2432 11.9202

Medicare Plaintiff’s health

insurance in Medicare.

10.4185 10.6483

Medicaid Plaintiff’s health

insurance is Medicaid.

11.4420 11.1002

Private Health

Insurance

Plaintiff’s health

insurance is Private

Health Insurance.

11.1649 11.0172

Other Insurance Plaintiff’s health

insurance is other.

10.3609 11.4289

Number of observations 436 508

Amounts are in 1982 – 1984 dollars


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can be resolved through mandatory mediation, through voluntary negotiated

settlement, and through trial verdict. In general most claims are disposed

through some form of settlement with approximately 10 percent going to trial

(Payne et al. 1985, Danzon and Lillard 1985, Priest and Klein 1985, Taragin et

al. 1992).

THEORETICAL AND EMPIRICAL ANALYSIS

Standard litigation analysis has produced theoretical and empirical studies on

how and why legal disputes are settled and litigated (Landes 1971, Gould

1973, Posner 1973, Shavell 1982, Priest and Klein 1984, Cooter and Rubinfeld

1989). The models regard the litigation process as a choice between a certain

settlement and an uncertain resolution of the dispute at trial. They also

described the process whereby the parties in a dispute formed their

expectations about trial in deciding whether to accept or reject a settlement

offer. In these models a party’s decision to settle or to litigate is guided by the

objective of maximizing a plaintiff’s net return or minimizing a defendant’s

total loss.

In the litigation of medical malpractice claims standards exist for resolving

disputes and courts apply specific standards in deciding disputes. These

standards, which are based on legal rules and precedent, are not necessarily

uniform across courts, but the substantive issues of the process are assumed to

be applied consistently by the courts. In medical malpractice cases the

decision standard in determining the outcome of a medical malpractice claim

is based on the negligence rule. The negligence rule requires health care

providers to provide a minimum quality level of care (Danzon 1985, Shavell

1987, Farber and White 1991). In medical malpractice breach of accepted

medical practices by a health care provider is considered professional

negligence. Medical malpractice results when it can be determined that the

particular standard of care provided does not comply with any of the accepted

standards of care and consequently resulted in injury.

To determine the effects of various factors on the recovery amount we

estimate a single equation model for both male and female. The estimation is

done by ordinary least square on the log of total recovery. The distributions of

log recoveries are a better approximation to the normal distribution than the

distribution of recoveries (Farber and White 1991). The model expresses the

natural log of recovery (Ln R) as a linear function of a vector of k independent

variables (Xk):

Ln R ¼ SBkXk þ e1 ð1Þ


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where Bk represent k coefficients to be estimated, and e is a normally

distributed error term. The independent variables include severity of injury

measured on a nine point scale, age, two dummy variables to capture the stage

of resolution, and three dummy variables to capture type of medical

insurance.

Table 2 displays the estimated results for total recoveries. The

coefficients for the severity dummy variables are to be interpreted in

relation to the missing level, death. The signs of the coefficient adhere to

the theoretical predictions, with negative coefficients for lower severity

levels, such as emotional injury, and positive coefficients on the more

severe levels of injury, such as permanent grave. The results are consistent

with the findings that medical malpractice recoveries tend to increase with

the level of severity (Sloan and Wert 1991). An interesting outcome is

observed when one compares the significant levels for lower levels of

injuries for male and female. The severity for lower levels of injury such as

‘‘emotional only’’ are highly significant for women but not for men.

However, men with permanent major injuries have a significant advantage

over women with similar injuries. This outcome may imply that judges and

juries award compensation according to traditional perceptions of the

division of labor between men and women. They may place a larger value

on the domestic duties of women, and are more likely to award

compensation to women who experience minor injuries and are diverted

from domestic duties but not necessarily from earning income. They may

also place a larger value on the earning power of men, discounting the

earning potential of women and are therefore more likely to award

recoveries for major injuries for men. In general, the standard analysis

used in computing estimates of the costs of a medical malpractice claim

does not only reflect assumptions made about future market and

household productivity losses during an individual working life. Other

relevant measures such as, future medical care, life expectancy (life tables),

whether losses were discounted to present value, and, if so, which discount

rate was used, are utilized (Sloan et al. 1991). Thus, the size of award can

be related to life expectancy and the working life of the plaintiff. Medical

injuries can extend beyond working life and are often based on life

expectancy. For example, plaintiffs whose injuries result in permanent

injuries such as paraplegia, quadriplegia, and even emotional damage, are

compensated for loss of potential future income and also the ability to

sustain themselves for the rest of their lives. In addition, assuming that the

length of working lives between the two groups is the same may not alter

gender compensation differences. In general, males have higher earnings


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Table 2: Log of Total Recoveries in Male and Female Medical Malpractice Claims

Male Recovery Female Recovery

Coefficient Standard Coefficient Standard

Variable (bM) Error T-ratio (bF) Error T-ratio

Constant 10.8317 0.2290 47.29 11.1090 0.1948 57.02

Emotional only 7 0.5948 0.6172 7 0.96 7 2.5812 0.3637 7 7.10*

Temporary insignificant 7 2.5405 0.4434 7 5.73* 7 2.8568 0.4136 7 6.91*

Temporary minor 7 1.5260 0.2088 7 7.31* 7 1.8667 0.1816 7 10.27*

Temporary major 7 1.07322 0.2974 7 3.61* 7 1.3629 0.2128 7 6.40*

Permanent minor 7 0.7746 0.2086 7 3.71* 7 1.2056 0.1754 7 6.87*

Permanent significant 7 0.0980 0.1797 7 0.55 7 0.4254 0.1635 7 2.60*

Permanent major 0.8781 0.2017 4.35* 0.1089 0.1906 0.57

Permanent grave 1.3286 0.2585 5.14* 0.7463 0.3214 2.32**

Age 7 0.0061 0.0026 1 7 2.38** 7 0.0047 0.0027 7 1.75***

Negotiated Settlement 0.5990 0.1822 3.29* 0.8315 0.1407 5.91*

Trial Verdict 0.7290 0.2981 2.44** 1.5368 0.2408 4.69*

Medicare 7 0.1499 0.2978 7 0.50 7 0.3502 0.2408 7 1.45

Medicaid 0.3639 0.2288 1.59 0.2911 0.1744 1.67***

Private Health Insurance 0.2523 0.1339 1.88*** 0.0445 0.1372 0.32

(continued overleaf )

REVIE

WOFSOCIA

LECONOMY

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Table 2: (continued )

Male Recovery Female Recovery

Coefficient Standard Coefficient Standard

Variable (bM) Error T-ratio (bF) Error T-ratio

R-Squared 0.35 0.37

F Statistic 16.43* 21.40*

Number of observations 435 507

Stars indicate significant at the 0.01 (*), 0.05 (**) and 0.10 (***) critical levels

MALEAND

FEMALERECOVERIE

SIN

MEDIC

ALMALPRACTIC

ECASES

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losses over their working lives than females because of high rates of

participation in the labor force and higher wage rates.

The age variable is negatively correlated with recovery, indicating that

younger plaintiffs are significantly more likely to receive recoveries.2 The type

of insurance indicates that private health insurance plays a more significant

role in determining men’s recovery while Medicaid is just marginally more

significant in determining female recoveries. Both males and females are

significantly more likely to resolve claims through settlement and trial than

through a mandatory mediation process.3

DECOMPOSING THE RECOVERIES DIFFERENTIAL

This paper offers two empirical analyses of recoveries in medical malpractice

cases. The first test presented above draws comparisons between male and

female recoveries from the impact of identical variables. The second approach

draws adjusted comparisons by asking what the recoveries of females would

be if they faced the structure of recoveries that determine the recoveries of

men. More specifically, we attempt to answer the question, by what

percentage would female compensation change if they received men’s

compensation structure. Using the logarithmic recoveries differential, the

raw compensation differential between men and women can be written as

Ln RM � Ln RF ¼ XMbM �XFbF ð2Þ

where X and b are the vectors of mean levels of the independent variables and

parameter estimates, and Ri is the average logarithm of recoveries to sex

group i. Equation 3 can be decomposed to

Ln RM � Ln RF ¼ ðXM �XFÞbM þ ðbM � bFÞXF ð3Þ

The first term on the right of equation 3 is the difference between the mean

levels of claim characteristics. It is part of the recovery gap that is attributable

to differences between males and females due to observed characteristics such

as age and severity of injury. The second term on the right is the X weighted

2 When we categorize the age variables into groups (not shown in tables) we find that although the

youngest age group, 18 and under females and males, represents approximately .05 and .06 of the plaintiffs in

both groups, they received the highest injury awards.

3 In Michigan, mediation of malpractice claims became mandatory in 1986. The parties accepted the

mediation awards in only 12.5 percent of the cases. Michigan’s Mediation Tribunal noted that a rejected

mediation award can be used an opportunity for subsequent negotiated settlement.


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differences in parameter estimates. It is the portion of the gross recovery gap

that cannot be attributed to differences between male and female in their

observed characteristics, and is considered unexplained.4

We find a recovery differential of approximately 28 percent between male

and female awards. This means that female awards are 72 percent of male

awards and it implies that females would experience an increase in recovery if

they received male’s average compensation for medical malpractice injures.

We then decompose the compensation differential into a portion that is due

to differences in characteristics between males and females, and a portion that

remains unexplained.5 The empirical framework used to address such

question was developed by Oaxaca (1973) and Blinder (1973). Based on this

model the raw compensation differential between males and females from

equations 3 are presented in Table 3.

The recovery gap that would result from this differential treatment of male

and female claims is unobservable and can be attributed to many different

factors. In the literature on labor market earnings many studies attribute the

wage differential between men and women or between black and white either

to discrimination or to unobservable differences in ability and skill level

between the groups (Oaxaca and Ranson 1994, Card and Lemieux 1996).

According to the results of our analysis in Table 3, the male and female

recovery differential is substantially unexplained by differences in mean levels

of characteristics between the two groups. Claim characteristics such as

severity, age, and medical insurance generate only 0.00314 and – 0.073

recovery differential when evaluated at male and female mean levels.

Unexplained factors account for the residual of approximately 0.99686 and

1.073 percent of the recovery gap. These values are similar to those found in

the literature on wage differentials between men and women (Kosters 1991).

The fact that claims characteristics accounts for such small portion of

medical malpractice injury is not a great surprise in light of the nature of the

current litigation system. Many explanations can be given for the large

unexplained portion. In general terms, controversy prevails about the

accuracy and fairness of jury verdicts in medical malpractice cases. The law

4 This process can be alternatively specified and the unexplained log difference can be weigh by men’s

recoveries rather than women’s mean levels of characteristics. The result would be Ln RM7Ln RF=

(XM7XF) bF + (bM7 bF)XM

5 The model attributes the unexplained portion of the wage differential as discrimination. However,

defining discrimination as the compensation differential between observationally equivalent male and female is

suspect. In fact, we seldom observe all the variables that make up an individual’s capital stock. Therefore it

will be incorrect to label recovery differences between males and females with the same injuries as

discrimination. Despite the problems of interpretation the decomposition techniques has received prominent

application in the legal system.


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governing medical malpractice leaves considerable room for extraneous

factors to influence jury valuation of cases, for the law of damages is

incredibly vague and governed by ad hoc decisions. Jury instructions are

mainly qualitative rather than quantitative, and the law lacks a specific

mechanism for achieving consistency across cases (Bovbjerg and Metzloff

1991). As a result, unmeasurable factors such as jury sympathy with injured

plaintiff’s, and biased towards defendants with deep pockets may encourage

higher awards for similar injuries. Another plausible reason for the large

unexplained factor may be that variation in the valuation of injury may also

result because plaintiff lawyers disproportionately select cases of uncertain

liability where subjective damages are higher. One noted observation in the

state of Michigan, from which the data was derived is that ‘‘Forum

Shopping’’6 have resulted in legislation to restrict venue and prevent lawyers

from finding cause to move cases to an area solely to obtain a larger recovery.

SUMMARY AND CONCLUSION

This study analyzes medical malpractice compensation for males and females

with similar medical malpractice injuries. We estimate male and female

recoveries equations to discern the importance to the recovery differential of

gender differences in recoveries for medical malpractice injuries. We find that

the pattern of recoveries follows one similar to that found in studying wage

differentials between males and females. Differences in the relative magni-

Table 3: Decomposition of Males’ Recovery Advantage over Females’ Recoveries(percent)

Evaluated at

Recovery Advantage due to Male Means Female Means

Claim Characteristics 0.00314 7 0.073

Unexplained 0.99686 1.073

Note: male and female recoveries differential are largely unexplained by mean levels of

characteristics across the sexes. Outcome is based on the decomposition method (equation 3).

6 Forum Shopping is a practice whereby plaintiff’s lawyers contrived various pretexts to file claims in

counties where damage awards tend to be higher, such as the Wayne County, Detroit metropolitan area

(Spurr and Simmons 1996).


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tudes of foregone earnings and non-market losses are reflected in the

composition of recoveries. Females receive significantly more recoveries for

minor injuries involving more of an emotional nature, reflecting more

anticipated non-market losses because of a greater number of non-market

hours worked. Males recovered significantly more for more catastrophic

injuries, reflecting their higher expected earnings losses because of high rates

of participation in the labor force and higher wages. It also appears that the

longer life expectancy of women has a small and perhaps negligible effect on

the differential between male and female medical malpractice compensation.

We find a recovery gap in which females receive substantially less in

recoveries when they receive males’ average compensation for medical

injuries. However, only a small portion of the male and female recovery

differential is explained by the characteristics of the claims, leaving over 90

percent of the differential as unexplained.

There may be several possible reasons for the compensation differences

between males and females. First, although non-market loss is fully accepted

by economists, other participants in the dispute resolution process probably

have not accepted this mechanism. Second, claimant females in particular,

may elect to settle for less than the potential award at trial because of risk

aversion or the substantial cost and delay incurred in bringing a case to trial.

Third, legal rules, such as those limiting compensation for non-economic

damages may lead to under compensating for females. Fourth, women

plaintiffs may not be well represented by their attorneys. This may be because

women do not have the economic power to hire the best attorneys or they may

be more easily manipulated by their attorney and not push the case to its full

potential. Although some medical malpractice cases take place on a

contingency fee bases there are many factors that influence an attorney’s

decision to accept cases on a contingency basis. Attorneys are more likely to

accept cases with a higher probability of winning large awards. Since, men in

general, have greater potential market earning power than women, attorneys

may consider it more productive to pursue the case of a male than that of a

female. In addition, limitations on contingent fees for plaintiff’s attorneys

were enacted by several states. It is believed that limitations on contingent fees

should lead attorneys to pursue fewer marginal claims (Danzon 1983).

Finally, the ‘‘worthiness of the plaintiff’’ may result in judges and juries

viewing women plaintiffs as less deserving of large compensation. This may

imply that higher compensation will be given if the plaintiff is a male with a

good lawyer.


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Documents

Male and Female Recoveries in Medical Malpractice Cases