Name: 2A1 Tort Reform, Physician Remuneration Type, and Healthcare Expenditure
Start: 2021-08-02T14:15:00-0400
End: 2021-08-02T15:45:00-0400

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2A1 Tort Reform, Physician Remuneration Type, and Healthcare Expenditure

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Yu Fang, Temple University; Martin Grace, Temple University

Though tort reform supporters argue that tort reform could reduce healthcare costs, states have witnessed an increasing healthcare cost after enacting some tort reform. This paper looks at physicians’ financial incentives to assess whether the effect of tort reform on the healthcare expenditure depends on physicians’ economic incentives proxied by their remuneration type. With the tort reform dataset and NAIC health insurer’s filing statement during the years 2001-2018, we explore the effect of four commonly studied tort reforms on health insurance losses incurred conditioning on the types of plan enrollment. Various plans indicate different physicians’ remuneration types. Our preliminary results suggest a changing effect of tort reform conditioning on the studying period and on the type of physician remuneration. For example, compared with HMOs, insurers with a higher indemnity enrollment have significantly lower losses incurred after a joint & several liability reform, suggesting a lower health expenditure in FFS is likely related to defensive medicine rather than financial incentives. Such effects exist in the period 2001-2013. The relation changes to the opposite in the period 2014-2018. The results partially explain the mixed results in the literature.

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