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Optimal mixed payment system and medical liability. A laboratory study

Massimo Finocchiaro Castro, Paolo Lorenzo Ferrara, Calogero Guccio () and Domenico Lisi ()

MPRA Paper from University Library of Munich, Germany

Abstract: In a controlled laboratory environment, we test the role of medical malpractice liability on physicians’ service provision under fee-for-service, capitation, and mixed payment. We find that the introduction of medical liability causes a significant deviation from patient-optimal treatment that it is not mitigated by the use of a standard mixed payment system. Specifically, we find that the presence of medical liability pressure involves a proper optimal calibration of mixed payment system. Our findings have relevant policy implications for the correct calibration and implementation of the mixed payment system.

Keywords: medical liability; defensive medicine; payment systems; physicians’ behaviour; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C91 I12 K13 (search for similar items in EconPapers)
Date: 2021-10-20
New Economics Papers: this item is included in nep-exp, nep-hea and nep-law
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