Faculty Bibliography

CONTEXT/BACKGROUND:Proponents of restrictions on malpractice lawsuits claim that tort reform will improve access to medical care. OBJECTIVE:To estimate the effects of changes in state malpractice law on the supply of physicians. DESIGN/METHODS:Differences-in-differences regression analysis that matched data on the number of physicians in each state between 1985 and 2001 from the American Medical Association's Physician Masterfile with data on state tort laws and state demographic, political, population, and health care market characteristics. MAIN OUTCOME MEASURE/METHODS:Effect on physician supply of "direct" malpractice reforms that reduce the size of awards (eg, caps on damages). RESULTS:The adoption of "direct" malpractice reforms led to greater growth in the overall supply of physicians. Three years after adoption, direct reforms increased physician supply by 3.3%, controlling for fixed differences across states, population, states' health care market and political characteristics, and other differences in malpractice law. Direct reforms had a larger effect on the supply of nongroup vs group physicians, on the supply of most (but not all) specialties with high malpractice insurance premiums, on states with high levels of managed care, and on supply through retirements and entries than through the propensity of physicians to move between states. Direct reforms had similar effects on less experienced and more experienced physicians. CONCLUSION/CONCLUSIONS:Tort reform increased physician supply. Further research is needed to determine whether reform-induced increases in physician supply benefited patients.

Although the most visible manifestations of medical malpractice involve patient safety and the legal process, the availability and affordability of liability insurance largely determine the direction of medical malpractice policy. Scientific and industrial developments since the first modern malpractice crisis in the 1970s reveal major problems with the structure and regulation of liability insurance. Comprehensive reforms that approach medical malpractice insurance as a health policy problem are needed, and the Medicare program may have a major role to play.

The rhetoric of malpractice reform is at fever pitch, but political advocacy does not necessarily reflect grassroots opinion. To determine whether the ongoing liability crisis has greatly reduced physicians' professional satisfaction, we surveyed specialist physicians in Pennsylvania. We found widespread discontent among physicians practicing in high-liability environments, which seems to be compounded by other financial and administrative pressures. Opinion alone should not determine public policy, but physicians' perceptions matter for two reasons. First, perceptions influence behavior with respect to practice environment and clinical decision making. Second, perceptions influence the physician-patient relationship and the interpersonal quality of care.

Antitrust litigation involving hospitals is common. This paper describes recent developments and underlying issues in antitrust law with respect to hospital-hospital relations, hospital-physician relations, and hospital-payer relations. A key unanswered question in each of these areas is how government regulation and public purchasing affect competitive markets for hospital services.

Pennsylvania, like many states around the country, is in the throes of a "tort crisis." The cost of professional liability insurance for physicians and hospitals is escalating rapidly, as its availability shrinks. Many hospitals are poorly situated to bear these rising costs, especially in an environment of flat reimbursement rates and poor investment returns. This paper examines the impact of the liability crisis on Pennsylvania hospitals and the strategies being used to weather the storm, including alternative risk financing and closer ties between hospitals and affiliated physicians. It concludes by connecting these trends to larger medical malpractice policy issues.

Political debate over medical malpractice reform seldom takes meaningful account of its policy context, including the emerging science of patient safety. Instead, stakeholders on both sides use the rhetoric of patient safety to support entrenched positions on hardened proposals such as capping damages and limiting access to information about errors. Despite its déjà vu quality, the current malpractice crisis can only be understood and addressed as the product of changes in the health care system since the last crisis nearly twenty years ago--changes that also informed the patient safety movement. Patient safety may therefore serve as a bridge between medical liability and health policy.

"Regulation by litigation" is a recently recognized trend in American legal governance that develops differently in each economic sector it affects. In health care, widespread litigation can be viewed as the product of three partial transformations: incomplete industrialization, incomplete consumerism, and incomplete social solidarity. One can argue that the public turns to the courts because other actors who might exercise judgment and authority to resolve problems appear unreliable. Because litigation has several features at odds with sound health policy--including its cost, its hindsight bias, and its adversarial character--it may be necessary to develop new discretionary institutions to address specific questions that regulators cannot or will not answer.

Competition law (encompassing both antitrust and consumer protection) is the forgotten stepchild of health care quality. This paper introduces readers to competition law and policy, describes its institutional features and analytic framework, surveys the ways in which competition law has influenced quality-based competition, and outlines some areas in need of further development. Competition law protects the competitive process--not individual competitors. It guides the structural features of the health care system and the conduct of providers as they navigate it. Competition law does not privilege quality over other competitive goals but honors consumers' preferences with respect to trade-offs among quality, price, and other attributes of goods and services.