How often are patients seriously injured through faulty medical care? And what proportion of these people receive compensation for their injuries and suffering? This is the first book that tries to answer these questions in a careful, scholarly way. Among its important findings is that at most one in ten patients injured through medical negligence receives compensation through the malpractice system. The focus of public attention has been on the rising cost to physicians of malpractice insurance. Although Patricia Danzon analyzes this question thoroughly, her view is much broader, encompassing the malpractice system itself--the legal process, the liability insurance markets, and the feedback to health care. As an economist, she is concerned with the efficiency or cost-effectiveness of the system from the point of view of its three social purposes: deterrence of medical negligence, compensation of injured patients, and the spreading of risk. To provide evidence of the operation of the system in practice, to distinguish fact from allegation, and to evaluate proposals for reform, she has undertaken a detailed empirical analysis of malpractice claims and insurance markets. It is a major contribution to our understanding of how the system works in practice and how it might be improved.