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The welfare effects of medical malpractice liability

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  • Lakdawalla, Darius N.
  • Seabury, Seth A.

Abstract

We use variation in the generosity of local juries to identify the causal impact of medical malpractice liability on social welfare. Growth in malpractice payments contributed at most 5% points to the 33% total real growth in medical expenditures from 1990 to 2003. On the other hand, malpractice leads to modest mortality reductions; the value of these more than likely exceeds the costs of malpractice liability. Therefore, reducing malpractice liability is unlikely to have a major impact on health care spending, and unlikely to be cost-effective over conventionally accepted values of a statistical life.

Suggested Citation

  • Lakdawalla, Darius N. & Seabury, Seth A., 2012. "The welfare effects of medical malpractice liability," International Review of Law and Economics, Elsevier, vol. 32(4), pages 356-369.
  • Handle: RePEc:eee:irlaec:v:32:y:2012:i:4:p:356-369
    DOI: 10.1016/j.irle.2012.07.003
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    Cited by:

    1. Congressional Budget Office, 2010. "Selected CBO Publications Related to Health Care Legislation, 2009-2010," Reports 21993, Congressional Budget Office.
    2. Andrew Friedson & Thomas Kniesner, 2012. "Losers and losers: Some demographics of medical malpractice tort reforms," Journal of Risk and Uncertainty, Springer, vol. 45(2), pages 115-133, October.
    3. 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.
    4. Buzzacchi, Luigi & Scellato, Giuseppe & Ughetto, Elisa, 2016. "Frequency of medical malpractice claims: The effects of volumes and specialties," Social Science & Medicine, Elsevier, vol. 170(C), pages 152-160.
    5. Barkowski, Scott, 2015. "Does Defensive Medicine Reduce Health Care Spending?," MPRA Paper 64318, University Library of Munich, Germany.
    6. 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.
    7. Daniel Montanera, 2016. "The importance of negative defensive medicine in the effects of malpractice reform," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(3), pages 355-369, April.
    8. 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.
    9. repec:cbo:report:21993 is not listed on IDEAS

    More about this item

    Keywords

    Medical malpractice liability; Medical expenditures; Defensive medicine;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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