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The Effects of Malpractice Pressure and Liability Reforms on Physicians' Perceptions of Medical Care

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  • Daniel P. Kessler
  • Mark McClellan
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    Abstract

    Understanding how and why liability laws and liability reforms alter the medical treatment decision-making process is central to reforming the current U.S. malpractice liability system. Survey methods serve a valuable role in this process because they measure how malpractice pressure affects physician perceptions of appropriate practices, and thereby capture an important determinant of treatment decisions. Based on analysis of the American Medical Association Socioeconomic Monitoring System survey, we present four findings. First, physicians from states enacting liability reforms that directly reduce malpractice pressure experience lower growth over time in malpractice claims rates and in real malpractice insurance premiums. Second, physicians from reforming states report significant relative declines in the perceived impact of malpractice pressure on practice patterns. Third, individual physicians' personal experiences with the malpractice system are a key determinants of the perceived importance of defensive medicine. Fourth, the impact of individual physicians' claims experience on perceptions is smaller in reforming than in nonreforming states. Taken together, these results suggest that reforms in law affect physicians' attitudes, both by reducing the probability of an encounter with the liability system and by changing the nature of the experience of being sued, for those physicians who defend against malpractice claims.

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    File URL: http://www.nber.org/papers/w6346.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6346.

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    Date of creation: Jan 1998
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    Publication status: published as Kessler, Daniel and Mark McClellan. "Malpractice Law And Health Care Reform: Optimal Liability Policy In An Era Of Managed Care," Journal of Public Economics, 2002, v84(2,May), 175-197.
    Handle: RePEc:nbr:nberwo:6346

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    1. Kessler, Daniel & McClellan, Mark, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 111(2), pages 353-90, May.
    2. Frank A. Sloan & Lindsey M. Chepke, 2008. "Medical Malpractice," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262195720, December.
    3. Danzon, Patricia, 1984. "The Frequency and Severity of Medical Malpractice Claims," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 27(1), pages 115-48, April.
    4. Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc.
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