MALPRACTICE LITIGATION AND MEDICAL COSTS IN THE UNITED STATES


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Abstract

SUMMARYThis paper examines the relationship of medical malpractice litigation and medical costs in the United States. We relate medical malpractice settlements to medical costs for 190 metro and non-metro areas in the United States over a 5-year period and find that litigation is positively and significantly related to medical costs. Using a panel data set and a fixed-effects specification, the estimates indicate that malpractice litigation accounts for roughly 2–10% of medical expenditures, with the impact exceeding the dollar amount of settlements.

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