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Medical Errors: Getting the Incentives Right

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Author Info
Sverre Grepperud ()
Abstract

This work examines the role of penalties as providers of incentives to prevent medical errors and ensure that such incidents, once they occur, become common knowledge. It is shown that a scheme with two penalties (accountability and non-report) induces the first-best solution. However, this scheme does not necessarily imply a punitive environment, but may, under given circumstances, yield insignificant and even negative penalties. Alternative sanction systems, such as voluntary reporting and immunity, are found to have less desirable properties. An exception is confidentiality (anonymity) which turns out to be an optimal scheme. Finally, the examination of various penalty restrictions (scope and scale) shows that such barriers may promote both tougher and softer sanction schemes. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s10754-005-3984-4
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Publisher Info
Article provided by Springer in its journal International Journal of Health Care Finance and Economics.

Volume (Year): 5 (2005)
Issue (Month): 4 (December)
Pages: 307-326
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:ijhcfe:v:5:y:2005:i:4:p:307-326

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Web page: http://www.springerlink.com/link.asp?id=106603

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Related research
Keywords: reporting incentives; immunity; confidentiality; voluntary reporting;

References listed on IDEAS
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  1. Malik Arun S., 1993. "Self-Reporting and the Design of Policies for Regulating Stochastic Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 241-257, May. [Downloadable!] (restricted)
  2. Danzon, Patricia M, 1991. "Liability for Medical Malpractice," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 51-69, Summer. [Downloadable!] (restricted)
    Other versions:
  3. Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Pauly Danzon. Patricia M. & Kington Mark V. & Raynard S., 1990. "The Effects of Malpractice Litigation on Physicians' Fees and Incomes," University of Chicago - George G. Stigler Center for Study of Economy and State 59, Chicago - Center for Study of Economy and State.
    Other versions:
  5. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169. [Downloadable!] (restricted)
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  6. Kessler, Daniel & McClellan, Mark, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 353-90, May. [Downloadable!] (restricted)
  7. Border, Kim C & Sobel, Joel, 1987. "Samurai Accountant: A Theory of Auditing and Plunder," Review of Economic Studies, Blackwell Publishing, vol. 54(4), pages 525-40, October. [Downloadable!] (restricted)
  8. Sloan, Frank A, 1990. "Experience Rating: Does It Make Sense for Medical Malpractice Insurance," American Economic Review, American Economic Association, vol. 80(2), pages 128-33, May. [Downloadable!] (restricted)
  9. Heyes, Anthony G., 1996. "Cutting environmental penalties to protect the environment," Journal of Public Economics, Elsevier, vol. 60(2), pages 251-265, May. [Downloadable!] (restricted)
  10. Marilyn J. Simon, 1982. "Diagnoses and Medical Malpractice: A Comparison of Negligence and Strict Liability Systems," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 170-180, Spring. [Downloadable!] (restricted)
  11. Kessler, Daniel & McClellan, Mark, 2002. "Malpractice law and health care reform: optimal liability policy in an era of managed care," Journal of Public Economics, Elsevier, vol. 84(2), pages 175-197, May. [Downloadable!] (restricted)
  12. Livernois, John & McKenna, C. J., 1999. "Truth or consequences: Enforcing pollution standards with self-reporting," Journal of Public Economics, Elsevier, vol. 71(3), pages 415-440, March. [Downloadable!] (restricted)
  13. Jensen, Gail A. & Spurr, Stephen J. & Weycker, Derek A. & Bulycheva, Maria, 1999. "Physicians and the risk of medical malpractice: The role of prior litigation in predicting the future," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(2), pages 267-289. [Downloadable!] (restricted)
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