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Medical Malpractice Reform and Physicians in High-Risk Specialties

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  • Jonathan Klick
  • Thomas Stratmann

Abstract

If medical malpractice reform affects the supply of physicians, the effects will be concentrated in specialties facing high liability exposure. Many doctors are likely to be indifferent regarding reform, because their likelihood of being sued is low. This difference can be exploited to isolate the causal effect of medical malpractice reform on the supply of doctors in high-risk specialties, by using doctors in low-risk specialties as a contemporaneous within-state control group. Using this triple-differences design to control for unobserved effects that correlate with the passage of medical malpractice reform, we show that only caps on noneconomic damages have a statistically significant effect on the per capita number of doctors and that this effect is concentrated among only those specialties that face the highest litigation exposure. (c) 2007 by The University of Chicago. All rights reserved.

Suggested Citation

  • Jonathan Klick & Thomas Stratmann, 2007. "Medical Malpractice Reform and Physicians in High-Risk Specialties," The Journal of Legal Studies, University of Chicago Press, vol. 36(S2), pages 121-142, June.
  • Handle: RePEc:ucp:jlstud:v:36:y:2007:i:s2:p:s121-s142
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    File URL: http://dx.doi.org/10.1086/520416
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    1. Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc.
    2. Dubay, Lisa & Kaestner, Robert & Waidmann, Timothy, 2001. "Medical malpractice liability and its effect on prenatal care utilization and infant health," Journal of Health Economics, Elsevier, vol. 20(4), pages 591-611, July.
    3. Rizzo, John A. & Blumenthal, David, 1994. "Physician labor supply: Do income effects matter?," Journal of Health Economics, Elsevier, vol. 13(4), pages 433-453.
    4. Daniel Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 353-390.
    5. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    6. Paul H. Rubin & Joanna M. Shepherd, 2007. "Tort Reform and Accidental Deaths," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 221-238.
    7. Jonathan Gruber & Phillip Levine & Douglas Staiger, 1999. "Abortion Legalization and Child Living Circumstances: Who is the "Marginal Child"?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 263-291.
    8. Eric Helland & Jonathan Klick & Alexander Tabarrok, 2005. "Data Watch: Tort-uring the Data," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 207-220, Spring.
    9. David A. Matsa, 2007. "Does Malpractice Liability Keep the Doctor Away? Evidence from Tort Reform Damage Caps," The Journal of Legal Studies, University of Chicago Press, vol. 36(S2), pages 143-182, June.
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    Cited by:

    1. Jonah B. Gelbach, 2016. "When Do Covariates Matter? And Which Ones, and How Much?," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 509-543.
    2. 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.
    3. 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.
    4. Matter, Ulrich & Stutzer, Alois, 2015. "Politico-economic determinants of tort reforms in medical malpractice," Working papers 2015/02, Faculty of Business and Economics - University of Basel.
    5. 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.
    6. 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.
    7. Cotet-Grecu, Anca, 2015. "The impact of non-economic damages caps on obstetrics: Incentives versus practice style," Economics & Human Biology, Elsevier, vol. 17(C), pages 29-41.
    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. Ethan M. J. Lieber, 2014. "Medical Malpractice Reform, the Supply of Physicians, and Adverse Selection," Journal of Law and Economics, University of Chicago Press, vol. 57(2), pages 501-527.
    10. Hyman, David A. & Silver, Charles & Black, Bernard & Paik, Myungho, 2015. "Does tort reform affect physician supply? Evidence from Texas," International Review of Law and Economics, Elsevier, vol. 42(C), pages 203-218.
    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. Eric Helland & Darius N. Lakdawalla & Anup Malani & Seth A. Seabury, 2014. "Unintended Consequences of Products Liability: Evidence from the Pharmaceutical Market," NBER Working Papers 20005, National Bureau of Economic Research, Inc.
    13. Pinka Chatterji & Siyang Li & Gerald R. Marschke, 2018. "Medical Malpractice Reforms and the Location Decisions of New Physicians," NBER Working Papers 24401, National Bureau of Economic Research, Inc.
    14. Jessica Wolpaw Reyes, 2010. "The Effect of Malpractice Liability on the Specialty of Obstetrics and Gynecology," NBER Working Papers 15841, National Bureau of Economic Research, Inc.
    15. 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.
    16. repec:bla:jrinsu:v:84:y:2017:i:2:p:691-715 is not listed on IDEAS
    17. Eric Helland & Mark H. Showalter, 2009. "The Impact of Liability on the Physician Labor Market," Journal of Law and Economics, University of Chicago Press, vol. 52(4), pages 635-663, November.
    18. Malani, Anup & Reif, Julian, 2015. "Interpreting pre-trends as anticipation: Impact on estimated treatment effects from tort reform," Journal of Public Economics, Elsevier, vol. 124(C), pages 1-17.
    19. Matter, Ulrich & Stutzer, Alois, 2016. "The role of party politics in medical malpractice tort reforms," European Journal of Political Economy, Elsevier, vol. 42(C), pages 17-35.

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