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Exploring the Nexus between Certainty in Injury Compensation and Treatment Selection

Paola Bertoli and Veronica Grembi

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: We study how legal and financial incentives affect medical decisions. Using patient-level data, we identify the effect of a change in medical liability pressure exploiting the geographical distribution of hospitals across court districts, where some districts improve the certainty of expected damages per injury while others do not. As certainty increases, unnecessary c-sections increase by 20%. This increase is higher for hospitals with lower quality, farther from consumers associations, facing lower expected damages, and paid more per c-section. Combining the difference-in- difference with a regression discontinuity design, we show that the effect is already detectable in the short-run.

Keywords: scheduled damages; Cesarean sections; difference in difference (search for similar items in EconPapers)
JEL-codes: K13 K32 I13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-law
Date: 2017-08
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Working Paper: Exploring the nexus between certainty in injury compensation and treatment selection (2017) Downloads
Working Paper: Exploring the nexus between certainty in injury compensation and treatment selection (2017) Downloads
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