@article{8628f622d9c6431385e2c11f6035f757,
title = "Damage caps and defensive medicine, revisited",
abstract = "Does tort reform reduce defensive medicine and thus healthcare spending? Several (though not all) prior studies, using a difference-in-differences (DiD) approach, find lower Medicare spending for hospital care after states adopt caps on non-economic or total damages (“damage caps”), during the “second” reform wave of the mid-1980s. We re-examine this issue in several ways. We study the nine states that adopted caps during the “third reform wave,” from 2002 to 2005. We find that damage caps have no significant impact on Medicare Part A spending, but predict roughly 4% higher Medicare Part B spending. We then revisit the 1980s caps, and find no evidence of a post-adoption drop (or rise) in spending for these caps.",
keywords = "Defensive medicine, Healthcare spending, MEDICARE, Medical malpractice, Tort reform",
author = "Myungho Paik and Bernard Black and Hyman, {David A.}",
note = "Funding Information: We thank workshop participants at Hanyang University, Northwestern Law School, the 2013 Midwest Law and Economics Association Annual Meeting, 2013 Conference on Empirical Legal Studies, 2013 and 2014 Robert Wood Johnson Public Health Law Research conferences, 2014 American Society of Law, Medicine and Ethics Annual Health Law Professors Conference, 2014 AcademyHealth Annual Research Meeting, 2015 American Law and Economics Association Annual Meeting, 2015 Korean Association of Health Economics and Policy Fall Conference, and 2016 Korea's Allied Economic Associations Annual Meeting, and Frank Sloan (discussant) for comments and suggestions. We thank Michael Frakes for sharing with us his data on managed care penetration rates (used in Frakes and Jena, 2016), and Stuart Hagen of the Congressional Budget Office for answering our questions about the 2006 CBO report on defensive medicine. This work was supported by the research fund of Hanyang University (HY-2015). Publisher Copyright: {\textcopyright} 2016 Elsevier B.V.",
year = "2017",
month = jan,
day = "1",
doi = "10.1016/j.jhealeco.2016.11.001",
language = "English (US)",
volume = "51",
pages = "84--97",
journal = "Journal of Health Economics",
issn = "0167-6296",
publisher = "Elsevier",
}