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Defensive Medicine: Evidence from Military Immunity

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  • Michael D. Frakes
  • Jonathan Gruber

Abstract

We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active-duty or not—that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.

Suggested Citation

  • Michael D. Frakes & Jonathan Gruber, 2018. "Defensive Medicine: Evidence from Military Immunity," NBER Working Papers 24846, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24846
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    Cited by:

    1. Michael S. Kofoed & Wyatt J. Frasier, 2019. "[Job] Locked and [Un]loaded: The Effect of the Affordable Care Act Dependency Mandate on Reenlistment in the U.S. Army," Upjohn Working Papers 19-300, W.E. Upjohn Institute for Employment Research.
    2. 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.
    3. Frakes, Michael D. & Frank, Matthew B. & Seabury, Seth A., 2020. "The effect of malpractice law on physician supply: Evidence from negligence-standard reforms," Journal of Health Economics, Elsevier, vol. 70(C).
    4. Michael D. Frakes & Jonathan Gruber & Anupam Jena, 2019. "Is Great Information Good Enough? Evidence from Physicians as Patients," NBER Working Papers 26038, National Bureau of Economic Research, Inc.
    5. 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.

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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