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Do Physicians Respond to Liability Standards?

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  • Michael Frakes
  • Matthew B. Frank
  • Seth Seabury

Abstract

We explore the sensitivity of the clinical decisions of physicians to the standards of care expected of them under the law, drawing on the abandonment by states over time of rules holding physicians to standards determined by local customs and the contemporaneous adoption of national-standard rules. Using data on broad rates of surgical interventions at the county-by-year level from the Area Resource File, we find that local surgery rates converge towards national surgery rates upon the adoption of national-standard rules. Moreover, we find that these effects are more pronounced among rural counties.

Suggested Citation

  • Michael Frakes & Matthew B. Frank & Seth Seabury, 2015. "Do Physicians Respond to Liability Standards?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(1), pages 58-77, March.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201503)171:1_58:dprtls_2.0.tx_2-u
    DOI: 10.1628/093245613X14188909230136
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    References listed on IDEAS

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    1. Daron Acemoglu & Amy Finkelstein, 2008. "Input and Technology Choices in Regulated Industries: Evidence from the Health Care Sector," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 837-880, October.
    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, President and Fellows of Harvard College, vol. 111(2), pages 353-390.
    4. Janet Currie & W. Bentley MacLeod, 2008. "First Do No Harm? Tort Reform and Birth Outcomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 795-830.
    5. David A. Matsa, 2007. "Does Malpractice Liability Keep the Doctor Away? Evidence from Tort Reform Damage Caps," The Journal of Legal Studies, University of Chicago Press, vol. 36(S2), pages 143-182, June.
    6. Amitabh Chandra & Douglas O. Staiger, 2007. "Productivity Spillovers in Health Care: Evidence from the Treatment of Heart Attacks," Journal of Political Economy, University of Chicago Press, vol. 115(1), pages 103-140.
    7. 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.
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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. Christoph Engel & Urs Schweizer, 2015. "Does the Law Deliver? 32nd International Seminar on the New Institutional Economics June 11-14, 2014, Regensburg, Germany," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(1), pages 1-5, March.
    3. Michael D. Frakes & Matthew B. Frank & Seth A. Seabury, 2017. "The Effect of Malpractice Law on Physician Supply: Evidence from Negligence-Standard Reforms," NBER Working Papers 23446, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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