Medical Malpractice Reform
F. Parisi (ed.), Oxford Handbook of Law and Economics (Oxford Univ. Press, Forthcoming)
37 Pages Posted: 17 Mar 2015 Last revised: 26 Apr 2015
Date Written: March 17, 2015
The purpose of this chapter is to assess the theoretical and empirical evidence regarding the efficacy of medical malpractice liability and limitations to it in achieving better healthcare outcomes, and to identify the unresolved issues that merit further attention from scholars. First, we will explore the theoretical and legal background on medical malpractice. Our discussion here is just a sketch of the issues, but it lays out the basic framework from which most scholars have worked. We next turn to the available empirical evidence by focusing on three basic areas of study: (1) the impact of malpractice limitations on payouts and litigation; (2) the effect of malpractice limitations on overall healthcare costs; and (3) the effect of malpractice on two major cost drivers in the healthcare system: cardiac and obstetrics practice. We conclude that limitations on liability did not, and likely cannot, significantly reduce healthcare costs. Finally, we discuss new and important trends in the literature regarding reforms to standards of care and the role of clinical practice guidelines as well as communication and disclosure programs. There is some evidence that healthcare providers are very sensitive to the legal standard of care, and correctly setting the standard of care is one of the greatest challenges faced by the healthcare system. Thus, standard setting in conjunction with medical liability has potential to improve medical treatment.
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