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The Impact of Medical Liability Standards on Regional Variations in Physician Behavior: Evidence from the Adoption of National-Standard Rules

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  • Michael Frakes

Abstract

I explore the association between regional variations in physician behavior and the geographical scope of malpractice standards of care. I estimate a 30-50 percent reduction in the gap between state and national utilization rates of various treatments and diagnostic procedures following the adoption of a rule requiring physicians to follow national, as opposed to local, standards. These findings suggest that standardization in malpractice law may lead to greater standardization in practices and, more generally, that physicians may indeed adhere to specific liability standards. In connection with the estimated convergence in practices, I observe no associated changes in patient health. (JEL I11, I18, J44, K13)

Suggested Citation

  • Michael Frakes, 2013. "The Impact of Medical Liability Standards on Regional Variations in Physician Behavior: Evidence from the Adoption of National-Standard Rules," American Economic Review, American Economic Association, vol. 103(1), pages 257-276, February.
  • Handle: RePEc:aea:aecrev:v:103:y:2013:i:1:p:257-76
    Note: DOI: 10.1257/aer.103.1.257
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    Citations

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    Cited by:

    1. Urs Schweizer, 2015. "Do Physicians Respond to Liability Standards?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(1), pages 83-86, March.
    2. Alberto Galasso & Hong Luo, 2016. "Tort Reform and Innovation," NBER Working Papers 22712, National Bureau of Economic Research, Inc.
    3. Arjen Van Witteloostuijn & Marcus Dejardin & Julie Hermans & Dendi Ramdani, & Johanna Vanderstraeten & Jacqueline Brassey & Hendrik Slabbinck, 2015. "Fitting entrepreneurial, firm-level and environmental contingencies for better performance," Post-Print halshs-01379907, HAL.
    4. Bertoli, P.; Grembi, V.;, 2017. "Medical Malpractice: How legal liability affects medical decisions," Health, Econometrics and Data Group (HEDG) Working Papers 17/14, HEDG, c/o Department of Economics, University of York.
    5. Christopher S. Carpenter & D. Sebastian Tello-Trillo, 2015. "Do ‘Cheeseburger Bills’ Work? Effects of Tort Reform for Fast Food," NBER Working Papers 21170, National Bureau of Economic Research, Inc.
    6. Bekkerman, Anton & Gilpin, Gregory A., 2014. "Can equitable punishment be mandated? Estimating impacts of sentencing guidelines on disciplinary disparities," International Review of Law and Economics, Elsevier, vol. 40(C), pages 51-61.
    7. Eibich, Peter & Ziebarth, Nicolas R., 2014. "Examining the structure of spatial health effects in Germany using Hierarchical Bayes Models," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 305-320.
    8. Sofia Amaral-Garcia & Paola Bertoli & Veronica Grembi, 2015. "Does Experience Rating Improve Obstetric Practices? Evidence From Geographical Discontinuities in Italy," CERGE-EI Working Papers wp540, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    9. Michael Frakes & Matthew B. Frank & Seth Seabury, 2015. "Do Physicians Respond to Liability Standards?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(1), pages 58-77, March.
    10. Michael D. Frakes & Matthew B. Frank & Seth A. Seabury, 2017. "The Effect of Malpractice Law on Physician Supply: Evidence from Negligence-Standard Reforms," NBER Working Papers 23446, National Bureau of Economic Research, Inc.
    11. Eric Helland & Anupam B. Jena & Dan P. Ly & Seth A. Seabury, 2016. "Self-insuring against Liability Risk: Evidence from Physician Home Values in States with Unlimited Homestead Exemptions," NBER Working Papers 22031, National Bureau of Economic Research, Inc.
    12. Frakes, Michael & Jena, Anupam B., 2016. "Does medical malpractice law improve health care quality?," Journal of Public Economics, Elsevier, vol. 143(C), pages 142-158.
    13. Paik, Myungho & Black, Bernard & Hyman, David A., 2017. "Damage caps and defensive medicine, revisited," Journal of Health Economics, Elsevier, vol. 51(C), pages 84-97.
    14. Peter Eibich & Nicolas R. Ziebarth, 2013. "Examining the Structure of Spatial Health Effects in Germany Using Hierarchical Bayes Models," SOEPpapers on Multidisciplinary Panel Data Research 620, DIW Berlin, The German Socio-Economic Panel (SOEP).
    15. Dzhamilya Nigmatulina & Charles Becker, 2016. "Is high-tech care in a middle-income country worth it?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(4), pages 585-620, October.
    16. Helland, Eric & Seabury, Seth A., 2015. "Tort reform and physician labor supply: A review of the evidence," International Review of Law and Economics, Elsevier, vol. 42(C), pages 192-202.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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