Essays on Malpractice Law and Physician Behavior

This dissertation contributes to an understanding of the manner in which various dimensions of malpractice law shape physician behavior and how this behavior, in turn, impacts health outcomes. In Chapter 1, I explore the association between regional variations in physician practices and the geographical scope of the standards of care to which physicians are held in malpractice actions. To investigate this general association, I explore whether treatment utilization rates in a state converge towards national utilization levels as states abandon the use of "locality rules" to adopt laws requiring physicians to comply with national standards of care. I focus the analysis on the case of cesarean delivery and find robust evidence of convergence in cesarean section utilization, whereby as much as 40 60% of the gap between state and national cesarean rates is closed upon the abandonment of a locality rule. In Chapter 2, I estimate the returns to regional cesarean intensities, drawing on an arguably exogenous source of variation in cesarean rates resulting from the adoption of national-standard laws. I first document robust evidence of triage in regional cesarean utilization, whereby physicians in high intensity regions begin to perform cesareans on mothers who are less in need of this intensive delivery alternative. Second, I find no evidence to suggest that an increase in regional cesarean rates otherwise leads to an increase in average neonatal outcomes. Third, I find evidence suggesting that increases in regional cesarean rates may be crowding out mothers otherwise in need of cesarean delivery. In Chapter 3, I consider another dimension to malpractice law and estimate the relationship between different levels of malpractice pressure, as identified by the adoption of non-economic damage caps and related malpractice laws, and certain decisions faced by obstetricians during the delivery of a child. Contrary to the conventional wisdom, I find no evidence to support the claim that malpractice pressure induces physicians to perform a substantially greater number of cesarean sections. However, I do find evidence of positive defensive behavior in the utilization of episiotomies during vaginal deliveries and in the durations of maternal lengths of stay. Thesis Supervisor: Jonathan Gruber Title: Professor of Economics Thesis Supervisor: Amy Finkelstein Title: Professor of Economics Acknowledgments I am especially grateful to Jonathan Gruber for the many contributions he has made to my career and for his insightful and candid guidance. My first experiences with Jon came as an undergraduate research assistant nearly a decade ago. Involving me in a range of challenging and fascinating projects, Jon inspired me to embark upon a path into academic research. In my case, this path has brought me into the world of both law and economics. Jon's support and patience over the years has made it possible for me to navigate these two disciplines without sacrificing the quality of my empirical training. I also owe special thanks to Amy Finkelstein for her guidance, accessibility and interest. Amy's quick and sharp insight provided me with valuable reality checks throughout the dissertation process. I also benefited greatly from thoughtful comments and general support provided by the following people: Marcus Alexander, Jennifer Arlen, David Autor, Kate Baicker, Joseph Doyle, Einer Elhauge, Arnold Epstein, Amanda Kowalski, Michael Greenstone, Matthew Harding, Louis Kaplow, Michelle Mello, Meredith Rosenthal, Steve Shavell, and seminar participants at the Law and Economics Seminar at Harvard Law School and the Health Policy and Management Seminar at the Harvard School of Public Health. I am also grateful to Negasi Beyene, Maria Owings and the staff at the National Center for Health Statistics for their help with the National Hospital Discharge Survey files and to Ronen Avraham for graciously providing data on state tort laws. Funding from the National Institute on Aging, Grant Number T32-AG00186, is gratefully acknowledged. Throughout the production of this dissertation, my wife and I had the pleasure of welcoming a son, Jack, and a daughter, Sydney, into our lives. I am so fortunate to have such loving and wonderful children and I thank them for continuing to challenge and inspire me in new ways every day. I would also like to thank my parents for providing a constant source of support over the many years of my education. I would not be where I am today without their unwavering faith in my abilities and in the decisions that I have made to get here. Last but not least, I am forever grateful to the love and encouragement provided by wife, Jennifer. My journey through law school, graduate school and parenthood would not have been possible without her support and without the sacrifices that she has made. I dedicate this dissertation to her.