Tort Reform and the Demand for Medical Care: Evidence from State-by-State Variation in Non-Economic Damages Caps

Anca Cotet ()
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Anca Cotet: Department of Economics, Ball State University

No 200901, Working Papers from Ball State University, Department of Economics

Abstract: Previous literature indicates that non-economic damages caps increase the number of physicians but finds no significant effect on health. A potential explanation is that, by reducing the cost of malpractice, caps affect physicians’ incentives to provide high quality care, an important determinant of the demand of medical care. Using county level panel data this paper finds that caps adoption leads to a 4 percents decrease in surgeries, a 2 percent decrease in hospital admissions but has no significant effect on emergency care, outpatient visits, birth rates, or prenatal care conditional on births. There is also evidence of increase use of physicians located across the border. Taken together these results provide suggestive evidence of a decrease in demand leading to a net negative effect on utilization rates.

Keywords: Malpractice; Non-economic damages; Patients; Medical Care Delivered (search for similar items in EconPapers)
JEL-codes: D00 I11 I12 I18 K13 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2009-01, Revised 2010-03
New Economics Papers: this item is included in nep-hea and nep-ias
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http://econfac.bsu.edu/research/workingpapers/bsuecwp200901r1cotet.pdf Second version, March 2010 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:bsu:wpaper:200901

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