Curb your premium! evaluating state intervention in medical malpractice insurance
AbstractUsing data of Italian public healthcare providers over years 2001 through 2008, we evaluate the impact of two policies adopted by Italian Regions (i.e., States) to cope with increasing medical malpractice costs using a Difference-in-Difference specification. We assess the impact of the policies on premiums paid and legal expenditures. The first policy consisted in collecting information and monitoring both compensation requests and any legal action related to a medical malpractice claim against a public healthcare provider. The second policy is a switch from private to public insurance for damages up to 500,000 euros combined with a centralized-regional contracting out in the private insurance market for damages in excess of 500,000 euros. Both policies represent attempts to cope with multiple agency problems within the public sector. Our results show that the impact of central monitoring in malpractice claims trend can reduce up to 29% the premiums paid for the treated providers, while the effect is obviously stronger for public insurance (41%). We control for the effects of the latter also on the trend of legal expenditures as proxy for common pool behaviors which do not result from our data. Validity tests show that our results are not driven by a decreasing trend affecting the insurance expenditures of the analyzed units before the policies’ introduction.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 32301.
Date of creation: Jul 2011
Date of revision:
Medical Errors; Medical Malpractice Premium; Legal Expenditures; Difference in Difference;
Find related papers by JEL classification:
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-27 (All new papers)
- NEP-IAS-2011-07-27 (Insurance Economics)
- NEP-LAW-2011-07-27 (Law & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniele Fabbri & Silvana Robone, 2010. "The geography of hospital admission in a national health service with patient choice," Health Economics, John Wiley & Sons, Ltd., vol. 19(9), pages 1029-1047, September.
- Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc.
- Acemoglu, Daron & Cantoni, Davide & Johnson, Simon & Robinson, James A, 2009.
"The Consequences of Radical Reform: The French Revolution,"
CEPR Discussion Papers
7245, C.E.P.R. Discussion Papers.
- Daron Acemoglu & Davide Cantoni & Simon Johnson & James A. Robinson, 2011. "The Consequences of Radical Reform: The French Revolution," American Economic Review, American Economic Association, vol. 101(7), pages 3286-3307, December.
- Daron Acemoglu & Davide Cantoni & Simon Johnson & James A. Robinson, 2009. "The Consequences of Radical Reform: The French Revolution," NBER Working Papers 14831, National Bureau of Economic Research, Inc.
- Kessler, Daniel & McClellan, Mark, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 353-90, May.
- 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.
- 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.
- Fenn, Paul & Gray, Alastair & Rickman, Neil, 2007. "Liability, insurance and medical practice," Journal of Health Economics, Elsevier, vol. 26(5), pages 1057-1070, September.
- Patricia M. Danzon, 1991.
"Liability for Medical Malpractice,"
Journal of Economic Perspectives,
American Economic Association, vol. 5(3), pages 51-69, Summer.
- George France & Francesco Taroni & Andrea Donatini, 2005. "The Italian health-care system," Health Economics, John Wiley & Sons, Ltd., vol. 14(S1), pages S187-S202.
- Eugenio Anessi-Pessina & Elena Cant� & Claudio Joninii, 2004. "Phasing Out Market Mechanisms in the Italian National Health Service," Public Money & Management, Chartered Institute of Public Finance and Accountancy, vol. 24(5), pages 309-316, October.
- Bordignon, Massimo & Turati, Gilberto, 2009. "Bailing out expectations and public health expenditure," Journal of Health Economics, Elsevier, vol. 28(2), pages 305-321, March.
- Decio Coviello & Stefano Gagliarducci, 2010. "Tenure in Office and Public Procurement," CEIS Research Paper 179, Tor Vergata University, CEIS, revised 21 Dec 2010.
- Daniel P. Kessler, 2011. "Evaluating the Medical Malpractice System and Options for Reform," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 93-110, Spring.
- Paul Fenn & Alastair Gray & Neil Rickman, 2004. "The Economics of Clinical Negligence Reform in England," Economic Journal, Royal Economic Society, vol. 114(496), pages F272-F292, 06.
- Melanie Lisac & Kerstin Blum & Sophia Schlette & Hans Maarse & Yvette Bartholomée & David McDaid & Adam Oliver & Ignacio Abásolo & Beatriz Lopez-Valcarcel & Gianluca Fiorentini & Matteo Lippi Bruni , 2008. "Health Systems and Health Reform in Europe," Intereconomics: Review of European Economic Policy, Springer, vol. 43(4), pages 184-218, July.
- Arrow, Kenneth J & Lind, Robert C, 1970. "Uncertainty and the Evaluation of Public Investment Decisions," American Economic Review, American Economic Association, vol. 60(3), pages 364-78, June.
- David H. Autor & John J. Donohue III & Stewart J. Schwab, 2003.
"The Costs of Wrongful-Discharge Laws,"
NBER Working Papers
9425, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.