MEDICAL MALPRACTICE IN MICHIGAN - AN ECONOMIC-ANALYSIS

We analyzed the factors determining the amount of the recovery on clai ms based on medical malpractice. Our data set, which previously was no t explored, consists of 20,428 claims arising within Michigan that wer e closed between 1978 and 1990, During this period, major changes were made in the law governing malpractice litigation. We determine the ef fect of these changes and of various other factors affecting medical m alpractice claims. We analyze the effect of a statute that was designe d to curtail ''forum shopping'' by attorneys for plaintiffs. This stat ute was initially successful in curbing such activity, but its effect seems to be diminishing. In addition, we compare mediation awards with settlement payments, and settlement payments with the expected value of claims in litigation. Evidence suggests that a mediation award is t he mediation panel's estimate of a settlement payment appropriate for the case, and that cases are settled for substantially less than their expected value at trial.