Allowing Patients to Waive the Right to Sue for Medical Malpractice: A Response to Thaler and Sunstein

Abstract:     
This essay critically evaluates Richard Thaler and Cass Sunstein's proposal to allow patients to prospectively waive their rights to bring a malpractice claim, presented in their recent, much acclaimed book, Nudge: Improving Decisions about Health, Wealth and Happiness. We show that the behavioral insights that under gird Nudge do not support the waiver proposal. In addition, we demonstrate that Thaler and Sunstein have not provided a persuasive cost-benefit justification for the proposal. Finally, we argue that their liberty-based defense of waivers rests on misleading analogies and polemical rhetoric that ignore the liberty and other interests served by patients' tort law rights. There are many ways in which nudges could be part of reforming medical malpractice litigation and improving the quality of medical care. Thaler and Sunstein's use of behavioral economics to explore new ways of addressing persistent problems is an invitation to innovative and meaningful policy reform. Our criticisms of their medical malpractice waiver proposal are designed not to disparage this effort, but to remind policymakers of the importance of careful consideration of the facts before choosing a path for change.

Keywords: Nudge, liberty, health care, waiver, cost-benefit analysis, behavioral economics, professional negligence, torts, liability insurance, healthcare costs, bias perception, tort compensation

JEL Classifications: K13

Working Paper Series