This is the fourth installment of a nine-part series excerpting the chapter on medical care from the new edition of economist Thomas Sowell’s “Applied Economics.”

A major source of the high cost of American medical care is malpractice insurance for doctors and hospitals.

The average cost of this insurance for individual doctors ranges from about $14,000 a year in California to nearly $40,000 a year in West Virginia. In particular specialties, such as obstetrics and neurosurgery, the cost of malpractice insurance can exceed $200,000 a year in some places.

These costs of course get passed on to patients, the government or whoever is paying for medical treatments. Even so, these are not the only financial costs created by medical malpractice lawsuits, nor are financial costs the only costs or necessarily the most important costs.

The threat of lawsuits can impose costs on obstetricians that raise their insurance premiums high enough to cause many of these doctors to stop delivering babies, or to stop delivering them in places where high jury awards on dubious evidence make it uneconomic to continue practicing obstetrics.

The net result of this can be that pregnant women in those places are at more risk than before because now there may be no doctor available in the vicinity to deliver their baby when the time comes.

Nor are obstetricians the only doctors who flee from places where it is easy to file lawsuits and win large damage awards. Pennsylvania, for example, lost one third of its surgeons between 1995 and 2002.

Ideally, juries would award malpractice damages only when the probability that malpractice had actually taken place was sufficiently clear, and the award only at a level sufficient to compensate real damages and deter such malpractice in the future.

In reality, an injured, deformed, or brain-damaged baby and an eloquent lawyer can lead to jury awards in the millions of dollars, even when it is by no means clear that the doctor who delivered that baby was in any way at fault.

A large study conducted jointly by the American College of Obstetricians and Gynecologists and the American Academy of Pediatrics — released in 2003 and reviewed and approved by leading medical authorities in and out of government, as well as from as far away as Australia and New Zealand — concluded that “the vast majority of brain damage and cerebral palsy among these infants originates in factors largely or completely outside the control of delivery room personnel.”

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