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Medical malpractice liability and physicians’ behavior: Experimental evidence

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  • Castro, Massimo Finocchiaro
  • Ferrara, Paolo Lorenzo
  • Guccio, Calogero
  • Lisi, Domenico

Abstract

Medical liability has been suspected of increasing health expenditure insofar as it induces the practice of defensive medicine. Despite the large evidence on the role of medical malpractice liability, the identification of its causal effect on physicians’ treatment decisions is a difficult task. In this paper we study for the first time in a controlled laboratory setting the effect of introducing the risk of being sued for medical malpractice on the provision of physicians’ medical services. Our behavioral data show that introducing malpractice liability pressure does lead physicians to choose a higher amount of medical services, regardless of the physicians’ payment system. However, we also find that the payment system in which malpractice liability is implemented makes the difference under the societal perspective, with relevant implications for health policy.

Suggested Citation

  • Castro, Massimo Finocchiaro & Ferrara, Paolo Lorenzo & Guccio, Calogero & Lisi, Domenico, 2019. "Medical malpractice liability and physicians’ behavior: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 646-666.
  • Handle: RePEc:eee:jeborg:v:166:y:2019:i:c:p:646-666
    DOI: 10.1016/j.jebo.2019.08.006
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    More about this item

    Keywords

    Medical liability; Defensive medicine; Payment systems; Physicians’ behavior; Laboratory experiment;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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