Biomaterial Database

Malpractice liability, technology choice and negative defensive medicine. 2012

Eberhard Feess

Frankfurt School of Finance & Management, Frankfurt, Germany. e.feess@frankfurt-school.de

We extend the theoretical literature on the impact of malpractice liability by allowing for two treatment technologies, a safe and a risky one. The safe technology bears no failure risk, but leads to patient-specific disutility since it cannot completely solve the health problems. By contrast, the risky technology (for instance a surgery) may entirely cure patients, but fail with some probability depending on the hospital's care level. Tight malpractice liability increases care levels if the risky technology is chosen at all, but also leads to excessively high incentives for avoiding the liability exposure by adopting the safe technology. We refer to this distortion toward the safe technology as negative defensive medicine. Taking the problem of negative defensive medicine seriously, the second best optimal liability needs to balance between the over-incentive for the safe technology in case of tough liability and the incentive to adopt little care for the risky technology in case of weak liability. In a model with errors in court, we find that gross negligence where hospitals are held liable only for very low care levels outperforms standard negligence, even though standard negligence would implement the first best efficient care level.

UI	MeSH Term	Description	Entries
D007349	Insurance, Health, Reimbursement	Payment by a third-party payer in a sum equal to the amount expended by a health care provider or facility for health services rendered to an insured or program beneficiary. (From Facts on File Dictionary of Health Care Management, 1988)	Health Insurance Reimbursement,Reimbursement, Health Insurance,Third-Party Payments,Third-Party Payers,Health Insurance Reimbursements,Insurance Reimbursement, Health,Insurance Reimbursements, Health,Payer, Third-Party,Payers, Third-Party,Payment, Third-Party,Payments, Third-Party,Reimbursements, Health Insurance,Third Party Payers,Third Party Payments,Third-Party Payer,Third-Party Payment
D008318	Malpractice	Failure of a professional person, a physician or lawyer, to render proper services through reprehensible ignorance or negligence or through criminal intent, especially when injury or loss follows. (Random House Unabridged Dictionary, 2d ed)	Professional Negligence,Negligence,Negligence, Professional,Professional Negligences
D003657	Decision Making	The process of making a selective intellectual judgment when presented with several complex alternatives consisting of several variables, and usually defining a course of action or an idea.	Credit Assignment,Assignment, Credit,Assignments, Credit,Credit Assignments
D003675	Defensive Medicine	The alterations of modes of medical practice, induced by the threat of liability, for the principal purposes of forestalling lawsuits by patients as well as providing good legal defense in the event that such lawsuits are instituted.	Defensive Practice,Medicine, Defensive,Defensive Practices
D006801	Humans	Members of the species Homo sapiens.	Homo sapiens,Man (Taxonomy),Human,Man, Modern,Modern Man
D016365	Liability, Legal	Accountability and responsibility to another, enforceable by civil or criminal sanctions.	Institutional Liability,Personal Liability,Professional Liability,Legal Liability,Medical Liability,Torts,Institutional Liabilities,Legal Liabilities,Liabilities, Institutional,Liabilities, Legal,Liabilities, Medical,Liabilities, Personal,Liabilities, Professional,Liability, Institutional,Liability, Medical,Liability, Personal,Liability, Professional,Medical Liabilities,Personal Liabilities,Professional Liabilities,Tort
D017048	Health Care Costs	The actual costs of providing services related to the delivery of health care, including the costs of procedures, therapies, and medications. It is differentiated from HEALTH EXPENDITURES, which refers to the amount of money paid for the services, and from fees, which refers to the amount charged, regardless of cost.	Medical Care Costs,Treatment Costs,Costs, Medical Care,Health Costs,Healthcare Costs,Cost, Health,Cost, Health Care,Cost, Healthcare,Cost, Medical Care,Cost, Treatment,Costs, Health,Costs, Health Care,Costs, Healthcare,Costs, Treatment,Health Care Cost,Health Cost,Healthcare Cost,Medical Care Cost,Treatment Cost
D018570	Risk Assessment	The qualitative or quantitative estimation of the likelihood of adverse effects that may result from exposure to specified health hazards or from the absence of beneficial influences. (Last, Dictionary of Epidemiology, 1988)	Assessment, Risk,Benefit-Risk Assessment,Risk Analysis,Risk-Benefit Assessment,Health Risk Assessment,Risks and Benefits,Analysis, Risk,Assessment, Benefit-Risk,Assessment, Health Risk,Assessment, Risk-Benefit,Benefit Risk Assessment,Benefit-Risk Assessments,Benefits and Risks,Health Risk Assessments,Risk Analyses,Risk Assessment, Health,Risk Assessments,Risk Benefit Assessment,Risk-Benefit Assessments
D018803	Models, Economic	Statistical models of the production, distribution, and consumption of goods and services, as well as of financial considerations. For the application of statistics to the testing and quantifying of economic theories MODELS, ECONOMETRIC is available.	Economic Models,Economic Model,Model, Economic
D020811	Biomedical Technology	The application of technology to the solution of medical problems.	Health Care Technology,Health Technology,Biomedical Technologies,Technology, Biomedical,Technology, Health,Technology, Health Care