PER Distinguished Lecture Series: Jonathan Gruber

October 6, 2017 - 10:30am - 12:00pm
1512 International Affairs Building
420 West 118th Street
New York, NY 10027
United States

PER Distinguished Lecture Series: Jonathan Gruber, "Defensive Medicine: Evidence from Military Immunity"
Friday, October 6, 2017
1512 International Affairs Building

A major source of controversy in U.S. health care is the practice of “defensive medicine,” an unintended effect of the liability system in which physicians order extraneous tests and procedures as a result of fears over medical liability.  Existing evidence on the importance of this issue is quite mixed, however, partly because of the difficulty of finding a clean comparison between groups who are and are not subject to malpractice pressure.  The structure of malpractice protections under the Military Health System (MHS), the $50 billion/year program that provides health care for active duty military and their dependents, provides such a comparison. Active-duty patients seeking medical treatment from military facilities cannot sue should they suffer harm as a result of negligent medical care, while protections are provided to dependents treated at military facilities and to all patients—active-duty or not—that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from military hospital closures pursuant to the Base Realignment and Closure process, we estimate that liability immunity reduces inpatient spending by 10% with no measurable negative effect on patient outcomes.