TY  - JOUR
AU  - Lakdawalla,Darius N.
AU  - Seabury,Seth A.
TI  - The Welfare Effects of Medical Malpractice Liability
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15383
PY  - 2009
Y2  - September 2009
UR  - http://www.nber.org/papers/w15383
L1  - http://www.nber.org/papers/w15383.pdf
N1  - Author contact info:
Darius N. Lakdawalla
Schaeffer Center for Health Policy and Economics
University of Southern California
3335 S. Figueroa St, Unit A
Los Angeles, CA 90089-7273


Los Angeles, CA 90
Tel: 213/740-6012
E-Mail: dlakdawa@healthpolicy.usc.edu

Seth Seabury
RAND
1776 Main Street
Santa Monica, CA  90407
Tel: 310-393-0411 x6261
Fax: 310-393-4818
E-Mail: Seth_Seabury@rand.org
AB  - Policymakers and the public are concerned about the role of medical malpractice liability in the rising cost of medical care.  We use variation in the generosity of local juries to identify the causal impact of malpractice liability on medical costs, mortality, and social welfare.  The effect of malpractice on medical costs is large relative to its share of medical expenditures, but relatively modest in absolute terms—growth in malpractice payments over the last decade and a half contributed at most 5.0% to the total real growth in medical expenditures, which topped 33% over this period.  On the other side of the ledger, malpractice liability leads to modest reductions in patient mortality; the value of these more than likely exceeds the cost impacts of malpractice liability.  Therefore, policies that reduce expected malpractice costs are unlikely to have a major impact on health care spending for the average patient, and are also unlikely to be cost-effective over conventionally accepted ranges for the value of a statistical life.
ER  -