Defensive Medicine: Evidence from Military Immunity
We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active-duty or not—that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.
We are extremely grateful to Mike Dinneen and Daryl Crowe at the Military Health System and to Wendy Funk and Keith Hofmann at Kennell Inc. for making the MHS data available to us and for fielding endless questions. We thank Ronen Avraham for providing data on damage-cap reforms. We are also grateful to Jonathan Petkun and Chris Behrer for outstanding research assistance. We acknowledge funding from NIA grant R01AG049898. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- Spending on patients in the U.S. Military Health System who are treated in settings that preclude suits against providers is about 5...
Michael Frakes & Jonathan Gruber, 2019. "Defensive Medicine: Evidence from Military Immunity," American Economic Journal: Economic Policy, vol 11(3), pages 197-231.