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Defensive Medicine: Evidence from Military Immunity

Michael D. Frakes and Jonathan Gruber ()

No 24846, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active-duty or not—that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.

JEL-codes: I11 I18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea
Date: 2018-07
Note: AG HC HE LS PE
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