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Designing Optional No‐Fault Insurance Policies for Health Care Systems

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  • David E. M. Sappington

Abstract

Legislation to create optional no‐fault insurance (ONFL) programs has recently been enacted in Florida and Virginia. ONFI programs provide compensation to patients when certain medical complications arise, provided the patient agrees not to sue the doctor for additional damages. The optimal design of ONFI programs is explored in this paper, focusing on the incentive effects of ONFI programs. The question of whether ONFI programs should be funded entirely by participating doctors, or whether social subsidies are optimal, is examined.

Suggested Citation

  • David E. M. Sappington, 1994. "Designing Optional No‐Fault Insurance Policies for Health Care Systems," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 113-142, March.
    • Handle: RePEc:bla:jemstr:v:3:y:1994:i:1:p:113-142
    DOI: 10.1111/j.1430-9134.1994.00113.x
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    5. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
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