Damage Caps and the Labor Supply of Physicians: Evidence from the Third Reform Wave

Nine states adopted caps on non-economic damages during the third medical malpractice (“med mal”) reform wave” from 2002-2005, joining twenty-two other states with caps on non-economic or total damages. We study the effects of these reforms on physician supply. Across a variety of difference-in-differences (DiD), triple differences, and synthetic control methods, in both state-and county-level regressions, we find no evidence that cap adoption leads to an increase in total patient care physicians, in specialties that face high med mal risk (with a possible exception for plastic surgeons), or in rural physicians.