Effect of Medical Malpractice on Resource Use and Mortality of AMI Patients

• Author: Praveen Dhankhar,M. Mahmud Khan,Shalini Bagga
• Date: 01 March 2007
• DOI: http://doi.org/10.1111/j.1740-1461.2007.00086.x
• Published date: 01 March 2007

Effect of Medical Malpractice

on Resource Use and Mortality

of AMI Patients

Praveen Dhankhar, M. Mahmud Khan, and Shalini Bagga*

We estimate the effect of medical malpractice on physician behavior and

health outcomes of AMI patients. The National Practitioner Data Bank

(NPDB) has been combined with the Nationwide Inpatient Sample (NIS).

Frequency of paid claims and claims severity are used as measures of

medical malpractice risk in each state. Results suggest that an increase in

medical malpractice risk leads to a reduction in resource use and improve-

ment in health outcome for patients with less severe medical conditions. For

patients with more severe medical conditions, medical malpractice is asso-

ciated with an improvement in mortality. Therefore, we find no evidence

that the costs of defensive medicine for most AMI patients are escalating.

Threat of a malpractice lawsuit lowers the mortality rate of AMI patients,

contradicting the widely held view that defensive medicine has no positive

effect on health status of patients.

I. Introduction

Theoretical and empirical studies suggest that risk of malpractice lawsuits

encourage physicians to practice “defensive medicine.”1In the literature,

defensive medicine is defined as ordering extra tests, procedures, and office

visits, mainly due to the fear of medical malpractice lawsuits and because the

benefit from the these extra tests and procedures is less than their cost. Most

studies on defensive medicine have focused only on the use of extra

*Address correspondence to Praveen Dhankhar, 2111 Abby Lane, Atlanta, GA 30345; phone:

1-404-277-3067; email: dhankharpraveen@hotmail.com. Dhankar and Bagga were at the Depart-

ment of Economics, Tulane University, New Orleans, LA ; Khan is at Health Systems Manage-

ment, Tulane University, New Orleans, LA.

1See Dubay et al. (1999), Kessler and McClellan (1996), and the OTA (1994) report.

Journal of Empirical Legal Studies

Volume 4, Issue 1, 163–183, March 2007

©2007, Copyright the Authors

Journal compilation ©2007, Cornell Law School and Blackwell Publisher, Inc.

163

resources due to malpractice fear (Dubay et al. 1999). However, medical

malpractice may act as a deterrent against less than optimal care, and the

increased use of medical resources may be beneficial for the patients (Office

of Technology Assessment (OTA) 1994). Thus, it is critical to include health

outcomes (as a measure of benefit) as well as costs in the study of defensive

medicine. This article estimates the impact of medical malpractice on

resource use and health outcomes for patients suffering from acute myocar-

dial infarction (AMI).

Heart disease is a leading cause of death in the United States and it

accounts for nearly one-seventh of all medical expenditure (Cutler &

McClellan 1996). We focus on patients suffering from AMI, commonly

known as heart attack. AMI is a major complication resulting from coronary

artery disease (CAD) and physicians can use any of the following three

technologies for its treatment: medical management, percutaneous translu-

minal coronary angioplasty (angioplasty), and coronary artery bypass graft

(bypass surgery) surgery.

The literature on defensive medicine has mainly focused on obstetric

patients, except for a study by Kessler and McClellan (1996), which found a

positive association between malpractice pressure and medical expenditures

on heart patients. They also found that reduction in provider liability pres-

sure had no substantial effect on mortality of heart patients. Rather than

using information on all heart patients, Kessler and McClellan used data for

elderly patients only for the years 1985–1990. Since stents were not in use

during this period, angioplasty without stent was not a substitute for bypass

surgery (Cutler & Huckman 2003).

The literature on obstetrics patients indicates that medical malpractice

leads to defensive medicine. Dubay et al. (1999) found that greater malprac-

tice pressure leads to a higher probability of cesarean delivery for the period

1990–1992. They found no significant improvement in health outcome,

using the Apgar score as its indicator, due to medical malpractice. Sloan

et al. (1995), using mortality of the child and the Apgar score as indicators of

health outcome, found no systematic improvement in birth outcomes due to

medical malpractice.

In this article we estimate the probability of an AMI patient receiving

any one of the three alternative treatments. We also estimate the impact of

medical malpractice on the probability of mortality from AMI. To measure

malpractice risk, we use the National Practitioner Data Bank (NPDB), a

comprehensive data set of all paid claims for medical malpractice. For the

inpatient data we use the Nationwide Inpatient Sample (NIS) for year 2002.

164 Dhankhar et al.