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The Association between Patient Safety Indicators and Medical Malpractice Risk: Evidence from Florida and Texas

American Journal of Health Economics, 2016 Forthcoming

Northwestern Law & Econ Research Paper No. 11-20

44 Pages Posted: 15 Jul 2011 Last revised: 22 Oct 2016

Date Written: May 5, 2016

Abstract

According to tort law theory, medical malpractice liability may deter negligence by healthcare providers. However, advocates of malpractice reform often argue that most malpractice claims are unrelated to provider performance. We study the connection between hospital adverse events and malpractice claim rates in the two states with public datasets on med mal claim rates: Florida and Texas. We use Patient Safety Indicators (“PSIs”), developed by the Agency for Healthcare Research and Quality, to measure rates for 17 types of adverse events. Hospitals with high rates for one PSI usually have high rates for other PSIs. We find a strong association between PSI rates and malpractice claim rates with extensive control variables and hospital fixed effects (in Florida) or county fixed effects (in Texas). Our results, if causal, provide evidence that malpractice claims leading to payouts are not random events. Instead, hospitals that improve patient safety can reduce malpractice payouts.

We also study local variation in adverse event rates, in the spirit of the Dartmouth Atlas work on variation in treatment intensity. We find large variations, both across counties and across hospitals within counties. This suggests that many adverse hospital events are avoidable at reasonable cost, since some hospitals are avoiding them.

Keywords: medical malpractice, patient safety indicators, hospital safety

JEL Classification: I11, I18, K13, K32

Suggested Citation

Black, Bernard S. and Wagner, Amy R and Zabinski, Zenon, The Association between Patient Safety Indicators and Medical Malpractice Risk: Evidence from Florida and Texas (May 5, 2016). American Journal of Health Economics, 2016 Forthcoming; Northwestern Law & Econ Research Paper No. 11-20. Available at SSRN: https://ssrn.com/abstract=1884630 or http://dx.doi.org/10.2139/ssrn.1884630

Bernard S. Black (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

Northwestern University - Kellogg School of Management

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)

European Corporate Governance Institute (ECGI)

Brussels
Belgium

Amy Rebecca Wagner

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Zenon Zabinski

Bates White ( email )

1300 I Street NW
Washington, DC 20005
United States

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