IDEAS home Printed from https://ideas.repec.org/p/syd/wpaper/2123-7705.html
   My bibliography  Save this paper

Medical Malpractice and Physician Liability Under a Negligence Rule

Author

Listed:
  • Wright, Donald J.

Abstract

A model of costly medical malpractice claims, based on Bayes Rule, is developed to examine the effects of physicians being liable for actual damage under a negligence rule. This model is consistent with empirical evidence concerning the pattern of claims. It is shown that compensating actual damage does not provide physicians with appropriate incentives to spend the second best optimal amount of time with patients or to treat the second best optimal number of patients. As a result, too much medical malpractice occurs relative to the second best social optimum.

Suggested Citation

  • Wright, Donald J., 2011. "Medical Malpractice and Physician Liability Under a Negligence Rule," Working Papers 2011-04, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2123/7705
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2123/7705
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jennifer Arlen & W. Bentley MacLeod, 2005. "Torts, Expertise, and Authority: Liability of Physicians and Managed Care Organizations," RAND Journal of Economics, The RAND Corporation, vol. 36(3), pages 494-519, Autumn.
    2. Marie‐Cécile Fagart & Claude Fluet, 2009. "Liability insurance under the negligence rule," RAND Journal of Economics, RAND Corporation, vol. 40(3), pages 486-508, September.
    3. Steven Shavell, 1982. "On Liability and Insurance," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 120-132, Spring.
    4. Shavell, Steven, 1999. "The level of litigation: private versus social optimality of suit and of settlement," International Review of Law and Economics, Elsevier, vol. 19(1), pages 99-115, March.
    5. Danzon, Patricia M., 2000. "Liability for medical malpractice," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 26, pages 1339-1404, Elsevier.
    6. Frank A. Sloan & Lindsey M. Chepke, 2008. "Medical Malpractice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262195720, April.
    7. Steven Shavell, 2000. "On the Social Function and the Regulation of Liability Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 25(2), pages 166-179, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Yongmin & Li, Jianpei & Zhang, Jin, 2017. "Liability in Markets for Credence Goods," MPRA Paper 80206, University Library of Munich, Germany.
    2. Dylan Martin-Lapoirie, 2022. "Teamwork in health care and medical malpractice liability: an experimental investigation," European Journal of Law and Economics, Springer, vol. 54(2), pages 251-282, October.
    3. Kitamura Miguel (Masaru) & Arai Koki, 2022. "Impact of Shorter Trial Periods in Medical Litigation," Asian Journal of Law and Economics, De Gruyter, vol. 13(3), pages 301-322, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Lakdawalla, Darius N. & Seabury, Seth A., 2012. "The welfare effects of medical malpractice liability," International Review of Law and Economics, Elsevier, vol. 32(4), pages 356-369.
    3. Yongmin Chen & Jianpei Li & Jin Zhang, 2022. "Efficient Liability In Expert Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1717-1744, November.
    4. Marcel Boyer & Donatella Porrini, 2010. "Optimal liability sharing and court errors: an exploratory analysis," Working Papers hal-00463913, HAL.
    5. Hultkrantz, Lars & Nilsson, Jan-Eric & Arvidsson, Sara, 2012. "Voluntary internalization of speeding externalities with vehicle insurance," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 926-937.
    6. Cohen, Alma & Dehejia, Rajeev, 2004. "The Effect of Automobile Insurance and Accident Liability Laws on Traffic Fatalities," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 357-393, October.
    7. Paola Bertoli & Veronica Grembi, 2018. "Medical Malpractice: How Legal Liability Affects Medical Decisions," Contributions to Economic Analysis, in: Health Econometrics, volume 127, pages 235-261, Emerald Group Publishing Limited.
    8. Antoci, Angelo & Fiori Maccioni, Alessandro & Russu, Paolo & Sacco, Pier Luigi, 2022. "Curing is caring? Liability reforms, defensive medicine and malpractice litigation in a post-pandemic world," Socio-Economic Planning Sciences, Elsevier, vol. 80(C).
    9. Bertoli, Paola & Grembi, Veronica, 2019. "Malpractice risk and medical treatment selection," Journal of Public Economics, Elsevier, vol. 174(C), pages 22-35.
    10. Daniel P. Kessler & Daniel L. Rubinfeld, 2004. "Empirical Study of the Civil Justice System," NBER Working Papers 10825, National Bureau of Economic Research, Inc.
    11. Olbrich Anja, 2008. "Patient Welfare under the Legal Standard of Care," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(2), pages 1-19, July.
    12. Sverre Grepperud, 2005. "Medical Errors: Getting the Incentives Right," International Journal of Health Economics and Management, Springer, vol. 5(4), pages 307-326, December.
    13. Dionne, Georges & Harrington, Scott, 2017. "Insurance and Insurance Markets," Working Papers 17-2, HEC Montreal, Canada Research Chair in Risk Management.
    14. Patricia Born & M. Martin Boyer, 2011. "Claims‐Made and Reported Policies and Insurer Profitability in Medical Malpractice," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 78(1), pages 139-162, March.
    15. 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.
    16. Donatella Porrini & Reimund Schwarze, 2014. "Insurance models and European climate change policies: an assessment," European Journal of Law and Economics, Springer, vol. 38(1), pages 7-28, August.
    17. Polinsky, A. Mitchell & Shavell, Steven, 2014. "Costly litigation and optimal damages," International Review of Law and Economics, Elsevier, vol. 37(C), pages 86-89.
    18. Magnus Söderberg, 2008. "Uncertainty and regulatory outcome in the Swedish electricity distribution sector," European Journal of Law and Economics, Springer, vol. 25(1), pages 79-94, February.
    19. Sverre Grepperud, 2005. "Medical Errors: Mandatory Reporting, Voluntary Reporting, or Both?," European Journal of Law and Economics, Springer, vol. 20(1), pages 99-112, July.
    20. Mondello, Gérard, 2012. "La responsabilité environnementale des prêteurs : difficultés juridiques et ensemble des possibles," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(2), pages 257-278, Juin.

    More about this item

    Keywords

    Medical Malpractice; Liability;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:syd:wpaper:2123/7705. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vanessa Holcombe (email available below). General contact details of provider: https://edirc.repec.org/data/deusyau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.