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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
    Note: AG HC HE LS PE
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    References listed on IDEAS

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    1. Michael Frakes, 2013. "The Impact of Medical Liability Standards on Regional Variations in Physician Behavior: Evidence from the Adoption of National-Standard Rules," American Economic Review, American Economic Association, vol. 103(1), pages 257-276, February.
    2. Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc.
    3. Daniel Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 353-390.
    4. Joseph J. Doyle Jr. & John A. Graves & Jonathan Gruber & Samuel A. Kleiner, 2015. "Measuring Returns to Hospital Care: Evidence from Ambulance Referral Patterns," Journal of Political Economy, University of Chicago Press, vol. 123(1), pages 170-214.
    5. 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.
    6. Ronen Avraham & Leemore S. Dafny & Max M. Schanzenbach, 2012. "The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums," Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(4), pages 657-686, October.
    7. Mark McClellan, 1997. "Hospital Reimbursement Incentives: An Empirical Analysis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 91-128, March.
    8. Craswell, Richard & Calfee, John E, 1986. "Deterrence and Uncertain Legal Standards," Journal of Law, Economics, and Organization, Oxford University Press, vol. 2(2), pages 279-303, Fall.
    9. 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.
    10. Kessler, Daniel & McClellan, Mark, 2002. "Malpractice law and health care reform: optimal liability policy in an era of managed care," Journal of Public Economics, Elsevier, vol. 84(2), pages 175-197, May.
    11. 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.
    12. 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.
    13. Michael Frakes & Anupam B. Jena, 2014. "Does Medical Malpractice Law Improve Health Care Quality?," NBER Working Papers 19841, National Bureau of Economic Research, Inc.
    14. Sloan, Frank A. & Shadle, John H., 2009. "Is there empirical evidence for "Defensive Medicine"? A reassessment," Journal of Health Economics, Elsevier, vol. 28(2), pages 481-491, March.
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    Cited by:

    1. 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).
    2. 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.

    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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