Are firms with ‘deep pockets’ more responsive to tort liability? Evidence from nursing homes

James A. Brickley, Susan F. Lu and Gerard J. Wedig

Health Economics, 2022, vol. 31, issue 8, 1590-1617

Abstract: We provide time series evidence of tort reform's impact on inputs and quality in the nursing home industry. Between 2000 and 2010, 11 state reforms capped noneconomic damages for health care services. Small chain and unaffiliated nursing homes enjoyed “judgment proof standing” and were less apt to be sued, prior to reform. We find that the managers of such homes were relatively unresponsive to the implementation of state caps on noneconomic damages. Large “deep‐pocketed” chain‐affiliated homes lacked judgment proof standing and implemented greater reductions in their nursing inputs in the aftermath of tort relief. However, we find little evidence of service quality erosion across four measured dimensions of care outcomes. Our findings are consistent with a “defensive care” model in which large chain homes employ unproductive inputs in an effort to meet a negligence standard of care.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/hec.4528

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:31:y:2022:i:8:p:1590-1617

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().