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Impact of State Tort Reforms on Utilization

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.

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Impact of State Tort Reforms on Utilization

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  1. Impact of State Tort Reforms on Utilization Jackson Williams

  2. 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.

  3. 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

  4. A Simple View of Tort Reform’s Predicted Effects

  5. 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.

  6. Graphing Defensive Medicine:Assume No Payment Incentives

  7. Graphing Defensive Medicine:Assume No Payment Incentives

  8. Graphing Defensive Medicine:Payment Incentivizes Stinting

  9. Difference-in-Differences AnalysisGrowth in Diagnostic, Lab & X-Ray 2000-2007

  10. Difference-in-Differences AnalysisGrowth in Diagnostic, Lab & X-Ray 2000-2007

  11. 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.

  12. More Realistic View of Volume and Intensity in Past Decade?

  13. 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?

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