Impact of State Tort Reforms on Utilization
Jackson Williams
Tort Reform
• In early part of past decade, prices of medical liability insurance spiked.
• AMA declared that certain states were experiencing “crises” where patients were losing access to doctors.
• Doctors’ lobbying campaigns for tort reforms were bolstered by promises of cost savings from reductions in “defensive medicine.”
• Ten states capped damages between 2002‐2005.
Putative Benefits of Tort Reform
• Increased Access
– As doctors get to keep more money, they will work harder, invest in their practices
– Prediction: More doctors, working more hours
• Decreased Defensive Medicine
– With less overall liability exposure, doctors should have less fear of lawsuits over missed diagnosis
– Prediction: Decreased utilization for testing
A Simple View of Tort Reform’s Predicted Effects
What Are the Dependent Variables?
• Investigators studying the Access Thesis have usually used number of doctors per state.
• Investigators studying the Defensive Medicine Thesis have usually used utilization data.
• However, as GAO noted, utilization is also expected to be higher as access increases.
• In other words, Access Thesis implies higher utilization even as Defensive Medicine Thesis predicts lower utilization.
Graphing Defensive Medicine:
Assume No Payment Incentives
Graphing Defensive Medicine:
Assume No Payment Incentives
Graphing Defensive Medicine:
Payment Incentivizes Stinting
Difference‐in‐Differences Analysis
Growth in Diagnostic, Lab & X‐Ray 2000‐2007
Difference‐in‐Differences Analysis
Growth in Diagnostic, Lab & X‐Ray 2000‐2007
Eisenberg: Physician’s Three Main Motivations
• The physician as the patient’s agent: Physician performs clinical services in the interest of, or demanded by, the patient. • The physician as guarantor of social good: Physician strives for efficiency and protection of the public.
• The physician as self‐interested practitioner: Physician seeks target income, pursues practice style convenient to him/her.
More Realistic View of Volume and Intensity in Past Decade?
Questions Raised By Findings
• Why haven’t policymakers and researchers more fully thought through (or articulated) these contradictions?
• Was there endogeneity involved in Tort Reform States’ growth?
• If there is true defensive medicine affecting utilization, what is the correct policy response?