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Does Experience Rating Improve Obstetric Practices? Evidence From Geographical Discontinuities

Author

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  • Amaral-Garcia, S.
  • Bertoli, P.
  • Grembi, V.

Abstract

We provide an assessment of the introduction of experience rating for medical malpractice insurance using 2002-2009 inpatient discharge records data on deliveries from the Italian Region of Piedmont. Considering experience rating as an increase in medical malpractice pressure, we show that such increase decreased the incidence of cesarean sections between 7 and 11.6% with no consequences on a broadly defined measure of complications. Our identification strategy exploits the territorial peculiarities of Piedmont: its 33 hospitals are distributed across 16 Courts' districts, 10 of which use schedules of non economic damages to set compensations for personal injuries and 6 do not. We use this ex-ante policy conditions to distinguish treated from control and implement first a difference in difference analysis, the robustness of which we test through a basic difference in discontinuities specification. We show that our results are robust to the different methodologies, and they can be explained in terms of a reduction in the discretion over obstetric decisions ratherthan a change in the risk profile of the patients.

Suggested Citation

  • Amaral-Garcia, S. & Bertoli, P. & Grembi, V., 2014. "Does Experience Rating Improve Obstetric Practices? Evidence From Geographical Discontinuities," Health, Econometrics and Data Group (HEDG) Working Papers 14/23, HEDG, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:hectdg:14/23
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    References listed on IDEAS

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    1. Veronica Grembi & Tommaso Nannicini & Ugo Troiano, 2011. "Policy Responses to Fiscal Restraints: A Difference-in-Discontinuities Design," Working Papers 397, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    2. Shurtz, Ity, 2013. "The impact of medical errors on physician behavior: Evidence from malpractice litigation," Journal of Health Economics, Elsevier, vol. 32(2), pages 331-340.
    3. Janet Currie & W. Bentley MacLeod, 2017. "Diagnosing Expertise: Human Capital, Decision Making, and Performance among Physicians," Journal of Labor Economics, University of Chicago Press, vol. 35(1), pages 1-43.
    4. 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.
    5. 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.
    6. Sofia, AmaralGarcia & Veronica, Grembi, 2011. "Curb your premium! evaluating state intervention in medical malpractice insurance," MPRA Paper 32301, University Library of Munich, Germany.
    7. Dranove David & Ramanarayanan Subramaniam & Sfekas Andrew, 2011. "Does the Market Punish Aggressive Experts? Evidence from Cesarean Sections," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(2), pages 1-33, January.
    8. Ity Shurtz, 2014. "Malpractice Law, Physicians' Financial Incentives, and Medical Treatment: How Do They Interact?," Journal of Law and Economics, University of Chicago Press, vol. 57(1), pages 1-29.
    9. 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.
    10. Paul Fenn & Alastair Gray & Neil Rickman & Oliver Rivero-Arias & Dev Vencappa, 2013. "The Impact of Risk Management Standards on Patient Safety: The Determinants of MRSA Infections in Acute NHS Hospitals, 2001–08," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(3), pages 340-361, June.
    11. Toshiaki Iizuka, 2013. "Does Higher Malpractice Pressure Deter Medical Errors?," Journal of Law and Economics, University of Chicago Press, vol. 56(1), pages 161-188.
    12. David Dranove & Yasutora Watanabe, 2009. "Influence and Deterrence: How Obstetricians Respond to Litigation against Themselves and Their Colleagues," American Law and Economics Review, Oxford University Press, vol. 12(1), pages 69-94.
    13. Dubay, Lisa & Kaestner, Robert & Waidmann, Timothy, 1999. "The impact of malpractice fears on cesarean section rates," Journal of Health Economics, Elsevier, vol. 18(4), pages 491-522, August.
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    More about this item

    Keywords

    experience rating; medical liability insurance; difference-in-differences; difference-in-discontinuities; c-sections; schedules of damages compensation;

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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