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The impact of tort reform on intensity of treatment: Evidence from heart patients

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  • Avraham, Ronen
  • Schanzenbach, Max

Abstract

This paper analyzes the effect of non-economic damage caps on the treatment intensity of heart attack victims. We focus on whether a patient receives a major intervention in the form of either a coronary artery by-pass or angioplasty. We find strong evidence that treatment intensity declines after a cap on non-economic damages. The probability of receiving a major intervention in the form of either an angioplasty or bypass declines by 1.25–2 percentage points after non-economic damage caps are enacted, and this effect is larger a year or two after reform. However, we also find clear evidence of substitution between major interventions. When doctors have discretion to perform a by-pass and patients have insurance coverage, caps on non-economic damages increase the probability that a by-pass is performed. The effect of non-economic damage caps on costs is not always statistically significant, but in models with state-specific trends, total costs decline by as much as four percent. We conclude that tort reform reduces treatment intensity overall, even though it changes the mix of treatments. Using the Center for Disease Control's Vital Statistics data, we find that tort reform is not associated with an increase in mortality from coronary heart disease; if anything, mortality declines.

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  • Avraham, Ronen & Schanzenbach, Max, 2015. "The impact of tort reform on intensity of treatment: Evidence from heart patients," Journal of Health Economics, Elsevier, vol. 39(C), pages 273-288.
  • Handle: RePEc:eee:jhecon:v:39:y:2015:i:c:p:273-288
    DOI: 10.1016/j.jhealeco.2014.08.002
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    Cited by:

    1. 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.
    2. Panthöfer, Sebastian, 2016. "Do Doctors Prescribe Antibiotics Out of Fear of Malpractice?," VfS Annual Conference 2016 (Augsburg): Demographic Change 145645, Verein für Socialpolitik / German Economic Association.
    3. Xin Zhao & Xiaoxue Li & Benno Torgler & Uwe Dulleck, 2021. "Patient violence, physicians treatment decisions, and patient welfare: Evidence from China," Health Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 1461-1479, June.
    4. Elissa P. Gentry & Benjamin J. McMichael, 2020. "Responses to Liability Immunization: Evidence from Medical Devices," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 17(4), pages 789-819, December.
    5. 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.
    6. Benjamin J. McMichael, 2017. "The Demand for Healthcare Regulation: The Effect of Political Spending on Occupational Licensing Laws," Southern Economic Journal, John Wiley & Sons, vol. 84(1), pages 297-316, July.
    7. Michael Frakes & Jonathan Gruber, 2020. "Defensive Medicine and Obstetric Practices: Evidence from the Military Health System," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 17(1), pages 4-37, March.
    8. Finocchiaro Castro, Massimo & Ferrara, Paolo Lorenzo & Guccio, Calogero & Lisi, Domenico, 2021. "Optimal mixed payment system and medical liability. A laboratory study," MPRA Paper 110276, University Library of Munich, Germany.
    9. Galasso, Alberto & Luo, Hong, 2018. "How does product liability risk affect innovation? Evidence from medical implants," CEPR Discussion Papers 13036, C.E.P.R. Discussion Papers.
    10. Alberto Galasso & Hong Luo, 2018. "When does Product Liability Risk Chill Innovation? Evidence from Medical Implants," NBER Working Papers 25068, National Bureau of Economic Research, Inc.
    11. Panthöfer, Sebastian, 2016. "Tort Reform and the Length of Physician Office Visits," UC3M Working papers. Economics 23861, Universidad Carlos III de Madrid. Departamento de Economía.
    12. Galasso, Alberto & Luo, Hong, 2016. "Tort Reform and Innovation," CEPR Discussion Papers 11358, C.E.P.R. Discussion Papers.
    13. Michael D. Frakes & Jonathan Gruber, 2018. "Defensive Medicine: Evidence from Military Immunity," NBER Working Papers 24846, National Bureau of Economic Research, Inc.
    14. Castro, M.F.; & Ferrara, P.; & Guccio, C.; & Lisi, D.;, 2018. "Medical Malpractice Liability and Physicians’ Behavior:Experimental Evidence," Health, Econometrics and Data Group (HEDG) Working Papers 18/11, HEDG, c/o Department of Economics, University of York.
    15. Javier Cano-Urbina & Daniel Montanera, 2017. "Do tort reforms impact the incidence of birth by cesarean section? A reassessment," International Journal of Health Economics and Management, Springer, vol. 17(1), pages 103-112, March.
    16. Ali Moghtaderi & Steven Farmer & Bernard Black, 2019. "Damage Caps and Defensive Medicine: Reexamination with Patient‐Level Data," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 16(1), pages 26-68, March.
    17. Dove John A. & Dove Laura R., 2020. "US State Tort Liability Reform and Entrepreneurship," Review of Law & Economics, De Gruyter, vol. 16(3), pages 1-45, November.
    18. Alberto Galasso & Hong Luo, 2016. "Tort Reform and Innovation," NBER Working Papers 22712, National Bureau of Economic Research, Inc.

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