The Impact of Medical Liability Standards on Regional Variations in Physician Behavior: Evidence from the Adoption of National-Standard Rules

Abstract

I explore the association between regional variations in physician behavior and the geographical scope of malpractice standards of care. I estimate a 30 – 50% reduction in the gap between state and national utilization rates of various treatments and diagnostic procedures following the adoption of a rule requiring physicians to follow national, as opposed to local, standards. These findings suggest that standardization of substantive malpractice law may lead to greater standardization in practices and, more generally, that physicians may indeed adhere to specific liability standards. In connection with the estimated convergence in practices, I observe no associated changes in patient health.

Keywords: malpractice, standard of care, regional variations, locality rule

JEL Classification: I10, K13, K41