How Does Tort Reform Affect Health Care Delivery

Charles Courtemanche () and Joseph Garuccio ()
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Charles Courtemanche: University of Kentucky
Joseph Garuccio: University of Kentucky

No 18455, IZA Discussion Papers from IZA Network @ LISER

Abstract: Health care costs in the U.S. have grown dramatically over the past several decades, with one possible cause being physicians providing unnecessary services out of fear of being sued for malpractice – a phenomenon known as “defensive medicine†. States responded by enacting different types of tort reforms. This paper reviews the literature on the effects of these reforms on outcomes related to malpractice risk, quantity and quality of health care services, overall utilization and expenditures, physician supply, and patient affordability. We use Google Scholar to identify papers within this scope and use either associational or quasi-experimental quantitative methods. The preponderance of evidence points towards non-economic damage caps reducing malpractice risk, quantity of services (aside from diagnostics and obstetrics), and overall health care utilization and expenditures while increasing physician supply and not having detrimental effects on patient outcomes. In general, the effects of other types of reforms are less clear. The literature would benefit from further research utilizing methodological advances related to combining machine learning with causal inference and eliminating bias from heterogeneous treatment effects.

Keywords: tort reform; defensive medicine; physicians; hospitals; health care regulation (search for similar items in EconPapers)
JEL-codes: I11 I18 K13 L25 L51 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-ind
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