National Institute on Aging, Medical MalPractice, Healthcare Costs, and Technology Adoption
 
 
 

National Institute on Aging, Medical MalPractice, Healthcare Costs, and Technology Adoption

The Welfare Effects of Medical Malpractice Liability

Principal Investigator: Darius Lakdawalla

We use variation in the generosity of local juries to identify the causal impact of malpractice liability on social welfare. Growth in malpractice payments over the last decade and a half contributed at most 5 percentage points to the 33% total real growth in medical expenditures.  On the other hand, malpractice leads to modest mortality reductions; the value of these more than likely exceeds the costs of malpractice liability.  Therefore, reducing malpractice cost is unlikely to have a major impact on health care spending, and unlikely to be cost-effective over conventionally accepted values of a statistical life.