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Curb your premium: The impact of monitoring malpractice claims

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  • Amaral-Garcia, Sofia
  • Grembi, Veronica

Abstract

We study a policy aimed at increasing the level of information on medical malpractice costs and the risk exposure of local public healthcare providers. The policy is based on enhanced monitoring of medical malpractice claims by the level of government that rules providers in a multilevel institutional setting. In particular, we implement a difference-in-differences strategy using Italian data at the provider level from 2001 to 2008 to evaluate the impact of monitoring claims on medical liability expenditures, measured as insurance premiums and legal expenditures, which was adopted by only some Regions. Our results show that this information-enhancing policy reduces paid premiums by around 15%. This reduced-form effect might arise by higher bargaining power on the demand side or increased competition on the supply side of the insurance market. Validity tests show that our findings are not driven by differential pre-policy trends between treated and control providers. Moreover, this policy could be cheaply implemented also in other institutional contexts with positive effects.

Suggested Citation

  • Amaral-Garcia, Sofia & Grembi, Veronica, 2014. "Curb your premium: The impact of monitoring malpractice claims," Health Policy, Elsevier, vol. 114(2), pages 139-146.
    • Handle: RePEc:eee:hepoli:v:114:y:2014:i:2:p:139-146
    DOI: 10.1016/j.healthpol.2013.08.007
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    Cited by:

    1. Bertoli, Paola & Grembi, Veronica, 2017. "The political economy of diagnosis-related groups," Social Science & Medicine, Elsevier, vol. 190(C), pages 38-47.
    2. Paola Bertoli & Veronica Grembi, 2018. "Courts, scheduled damages, and medical malpractice insurance," Empirical Economics, Springer, vol. 55(2), pages 831-854, September.
    3. Sofia Amaral-Garcia & Paola Bertoli & Veronica Grembi, 2015. "Does Experience Rating Improve Obstetric Practices? Evidence From Geographical Discontinuities in Italy," CERGE-EI Working Papers wp540, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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    More about this item

    Keywords

    Medical malpractice premium; Legal expenditures; Monitoring claims; Italy; Difference in differences;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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