Do Doctors Practice Defensive Medicine?

Daniel P. Kessler and Mark McClellan

No 5466, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: `Defensive medicine' is a potentially serious social problem: if fear of liability drives health care providers to administer treatments that do not have worthwhile medical benefits, then the current liability system may generate inefficiencies many times greater than the costs of compensating malpractice claimants. To obtain direct empirical evidence on this question, we analyze the effects of malpractice liability reforms using data on all elderly Medicare beneficiaries treated for serious heart disease in 1984, 1987, and 1990. We find that malpractice reforms that directly reduce provider liability pressure lead to reductions of 5 to 9 percent in medical expenditures without substantial effects on mortality or medical complications. We conclude that liability reforms can reduce defensive medical practices.

JEL-codes: I1 K13 (search for similar items in EconPapers)
Date: 1996-02
Note: EH LE
References: View complete reference list from CitEc
Citations: View citations in EconPapers (189)

Published as Kessler, Daniel and Mark McClellan. "Do Doctors Practice Defense Medicine?," Quarterly Journal of Economics, 1996, v111(2,May), 353-390.
Published as Towards a More Effective Monetary Policy, Kuroda, Twao, ed.,: Macmillan, 1997, pp. 137-164.

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