Abstract
Physicians often claim that they practice “defensive medicine,” including ordering extra imaging and laboratory tests, due to fear of malpractice liability. Caps on noneconomic damages are the principal proposed remedy. Do these caps in fact reduce testing, overall health-care spending, or both? We study the effects of “third-wave” damage caps, adopted in the 2000s, on specific areas that are expected to be sensitive to med mal risk: imaging rates, cardiac interventions, and lab and radiology spending, using patient-level data, with extensive fixed effects and patient-level covariates. We find heterogeneous effects. Rates for the principal imaging tests rise, as does Medicare Part B spending on laboratory and radiology tests. In contrast, cardiac intervention rates (left-heart catheterization, stenting, and bypass surgery) do not rise (and likely fall). We find some evidence that overall Medicare Part B rises, but variable results for Part A spending. We find no evidence that caps affect mortality.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 26-68 |
| Number of pages | 43 |
| Journal | Journal of Empirical Legal Studies |
| Volume | 16 |
| Issue number | 1 |
| DOIs | |
| State | Published - Mar 2019 |
Funding
We thank participants in workshops at the American Society of Health Economics 2016 Annual Meeting, American Law and Economics Association (2016), Conference on Empirical Legal Studies (2016), Conference on Empirical Legal Studies—Asia (2017), Southern Economics Association (2016), University of Wisconsin at Milwaukee, Economics Department, University of Paris II Law School, Michael Frakes and Kosali Simon (discussants), William Sage, and Keith Telster for comments and suggestions. The National Heart, Lung, and Blood Institute provided funding for this project (5 R01 HL113550).
ASJC Scopus subject areas
- Education
- Law