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Medical malpractice and physician liability under a negligence rule

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  • Donald J., Wright

Abstract

A model of costly medical malpractice claims, based on Bayes Rule, is developed to examine the effects of physicians being liable for actual damage under a negligence rule. This model is consistent with empirical evidence concerning the pattern of claims. It is shown that compensating actual damage does not provide physicians with appropriate incentives to spend the second best optimal amount of time with patients or to treat the second best optimal number of patients. As a result, too much medical malpractice occurs relative to the second best social optimum.

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File URL: http://www.sciencedirect.com/science/article/pii/S0144818811000391
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Bibliographic Info

Article provided by Elsevier in its journal International Review of Law and Economics.

Volume (Year): 31 (2011)
Issue (Month): 3 (September)
Pages: 205-211

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Handle: RePEc:eee:irlaec:v:31:y:2011:i:3:p:205-211

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Web page: http://www.elsevier.com/locate/irle

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Keywords: Medical malpractice Liability;

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  1. Patricia M. Danzon, 1991. "Liability for Medical Malpractice," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 51-69, Summer.
  2. Shavell, Steven, 1999. "The level of litigation: private versus social optimality of suit and of settlement," International Review of Law and Economics, Elsevier, vol. 19(1), pages 99-115, March.
  3. Marie-Cécile Fagart & Claude Fluet, 2007. "Liability Insurance under the Negligence Rule," Cahiers de recherche 0730, CIRPEE.
  4. Jennifer Arlen & W.Bentley Macleod, 2004. "Torts, Expertise, and Authority: Liability of Physicians and Managed Care Organizations," Working Papers 04-26, New York University, Leonard N. Stern School of Business, Department of Economics.
  5. Steven Shavell, 2000. "On the Social Function and the Regulation of Liability Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 25(2), pages 166-179, April.
  6. Frank A. Sloan & Lindsey M. Chepke, 2008. "Medical Malpractice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262195720.
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