IDEAS home Printed from https://ideas.repec.org/p/bsu/wpaper/200901.html
   My bibliography  Save this paper

Tort Reform and the Demand for Medical Care: Evidence from State-by-State Variation in Non-Economic Damages Caps

Author

Listed:
  • Anca Cotet

    () (Department of Economics, Ball State University)

Abstract

Previous literature indicates that non-economic damages caps increase the number of physicians but finds no significant effect on health. A potential explanation is that, by reducing the cost of malpractice, caps affect physicians’ incentives to provide high quality care, an important determinant of the demand of medical care. Using county level panel data this paper finds that caps adoption leads to a 4 percents decrease in surgeries, a 2 percent decrease in hospital admissions but has no significant effect on emergency care, outpatient visits, birth rates, or prenatal care conditional on births. There is also evidence of increase use of physicians located across the border. Taken together these results provide suggestive evidence of a decrease in demand leading to a net negative effect on utilization rates.

Suggested Citation

  • Anca Cotet, 2009. "Tort Reform and the Demand for Medical Care: Evidence from State-by-State Variation in Non-Economic Damages Caps," Working Papers 200901, Ball State University, Department of Economics, revised Mar 2010.
  • Handle: RePEc:bsu:wpaper:200901
    as

    Download full text from publisher

    File URL: http://web.bsu.edu/cob/econ/research/papers/bsuecwp200901r1cotet.pdf
    File Function: Second version, March 2010
    Download Restriction: no

    References listed on IDEAS

    as
    1. Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc.
    2. 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.
    3. Daniel Diermeier & Michael Keane & Antonio Merlo, 2005. "A Political Economy Model of Congressional Careers," American Economic Review, American Economic Association, vol. 95(1), pages 347-373, March.
    4. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-277, June.
    5. Sloan, Frank A, 1990. "Experience Rating: Does It Make Sense for Medical Malpractice Insurance," American Economic Review, American Economic Association, vol. 80(2), pages 128-133, May.
    6. Timothy Besley & Anne Case, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 769-798.
    7. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    8. 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.
    9. W. Kip Viscusi & Patricia H. Born, 2005. "Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(1), pages 23-43.
    10. Katherine Baicker & Amitabh Chandra, 2005. "The Effect of Malpractice Liability on the Delivery of Health Care," NBER Chapters,in: Frontiers in Health Policy Research, Volume 8 National Bureau of Economic Research, Inc.
    11. Browne, Mark J & Puelz, Robert, 1999. "The Effect of Legal Rules on the Value of Economic and Non-economic Damages and the Decision to File," Journal of Risk and Uncertainty, Springer, vol. 18(2), pages 189-213, August.
    12. Janet Currie & W. Bentley MacLeod, 2008. "First Do No Harm? Tort Reform and Birth Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 795-830.
    13. Daniel Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 353-390.
    14. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    15. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    16. Frank A. Sloan & Lindsey M. Chepke, 2008. "Medical Malpractice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262195720, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Malpractice; Non-economic damages; Patients; Medical Care Delivered;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • D00 - Microeconomics - - General - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bsu:wpaper:200901. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tung Liu). General contact details of provider: http://edirc.repec.org/data/debsuus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.