Working Paper: NBER ID: w24401
Authors: Pinka Chatterji; Siyang Li; Gerald R. Marschke
Abstract: We test whether state malpractice reforms differentially attract physicians whose human capital attributes may predispose them towards higher-than-average malpractice risk and lower quality patient care. Using an exit survey of physicians completing residencies between 1998 and 2017, we estimate willingness-to-pay to locate their first practice in a malpractice-reformed state. We find physicians are willing to forego on average about $11 in hourly wages to locate in a reform state. Training in a high vs. low-risk specialty, graduating from a less vs. more selective medical school, and training at a low vs. higher-ranked teaching hospital increases willingness-to-pay to locate in a reform state by $18 to $24 per hour. We argue that the generally strong human capital-bias in physician sorting responses to litigation reform may play a role in the geographic variation in patient care documented in the health literature.
Keywords: malpractice reform; physician sorting; human capital; healthcare quality
JEL Codes: I1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| state malpractice reforms (K13) | sorting of new physicians based on human capital characteristics (J24) |
| caps on non-economic damages (K13) | sorting of new physicians based on human capital characteristics (J24) |
| state malpractice reforms (K13) | willingness to pay (WTP) to locate in states with malpractice reform (J39) |
| physicians trained in high-risk specialties (I11) | willingness to pay (WTP) to locate in states with malpractice reform (J39) |
| physicians graduating from less selective medical schools (I14) | willingness to pay (WTP) to locate in states with malpractice reform (J39) |
| physicians trained at lower-ranked teaching hospitals (I23) | willingness to pay (WTP) to locate in states with malpractice reform (J39) |
| state malpractice reforms (K13) | geographic distribution of physicians based on risk profiles (I11) |
| high-risk specialists (I11) | sorting behavior of physicians (I11) |