A Fear of Lawsuits Really Does Seem to Result in Extra Medical Tests
From the article:
Mr. Gruber and Michael D. Frakes, a Duke economist and lawyer, looked at the health care system for active-duty members of the military. Under longstanding law, such patients get access to a government health care system but are barred from suing government doctors and hospitals for malpractice. Their family members can also use the military hospitals, but they can sue for malpractice if they wish.
Their study looked at what happened to the hospital care that military members received when a base closing forced them to use their benefits in civilian hospitals, where it was possible to sue. Spending on their health care increased, particularly on extra diagnostic tests.
They also found that, even within the military hospitals, family members who could sue tended to get more tests than those who could not.
Previous research has primarily looked at the effects of smaller legal reforms, like state caps on the awards that malpractice victims can collect in court. Those studies showed some declines in medical spending related to the policies. But they tended to be small, and yearly variation in medical spending made it difficult to be sure how much of the difference was because of the legal change.
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