Article

‘Sorry’ Is Never Enough

How State Apology Laws Fail to Reduce Medical Malpractice Liability Risk

Benjamin J. McMichael, R. Lawrence Van Horn & W. Kip Viscusi *

Based on case studies indicating that apologies from physicians to patients can promote healing, understanding, and dispute resolution, thirty-nine states (and the District of Columbia) have sought to reduce litigation and medical malpractice liability by enacting apology laws. Apology laws facilitate apologies by making them inadmissible as evidence in subsequent malpractice trials.

The underlying assumption of these laws is that after receiving an apology, patients will be less likely to pursue malpractice claims and will be more likely to settle claims that are filed. However, once a patient has been made aware that the physician has committed a medical error, the patient’s incentive to pursue a claim may increase even though the apology itself cannot be introduced as evidence. Thus, apology laws could lead to either increases or decreases in overall medical malpractice liability risk. Despite apology laws’ status as one of the most widespread tort reforms in the country, there is little evidence that they achieve their goal of reducing litigation.

This Article provides critical new evidence on the role of apology laws by examining a dataset of malpractice claims obtained directly from a large national malpractice insurer. This dataset includes substantially more information than is publicly available, and thus presents a unique opportunity to understand the effect of apology laws on the entire litigation landscape in ways that are not possible using only publicly available data. Decomposing medical malpractice liability risk into the frequency of claims and the magnitude of those claims, we examine the malpractice claims against 90% of physicians in the country who practice within a particular specialty over an eight-year period.

The analysis demonstrates that for physicians who regularly perform surgery—a context in which patients are more likely to be aware of potential risks—apology laws do not have a substantial effect on the probability that a physician will face a claim or the average payment made to resolve a claim. For nonsurgeons, we find that apology laws increase the probability of facing a lawsuit and increase the average payment made to resolve a claim, a finding which is consistent with the presence of asymmetric information. Overall, our findings indicate that on balance, apology laws increase rather than limit medical malpractice liability risk.

* Benjamin J. McMichael is Assistant Professor of Law, Hugh F. Culverhouse Jr. School of Law, University of Alabama; R. Lawrence Van Horn is Associate Professor of Management and Law and Executive Director of Health Affairs, Owen Graduate School of Management, Vanderbilt University; and W. Kip Viscusi is University Distinguished Professor of Law, Economics, and Management, Vanderbilt University Law School.

For helpful comments on earlier drafts of this Article, we wish to thank participants at the American Law & Economics Association 2017 Annual Conference and the Southern Economic Association 2016 Annual Meeting.