Optimal mixed payment system and medical liability. A laboratory study

Finocchiaro Castro, Massimo and Ferrara, Paolo Lorenzo and Guccio, Calogero and Lisi, Domenico (2021): Optimal mixed payment system and medical liability. A laboratory study.

Abstract

In a controlled laboratory environment, we test the role of medical malpractice liability on physicians’ service provision under fee-for-service, capitation, and mixed payment. We find that the introduction of medical liability causes a significant deviation from patient-optimal treatment that it is not mitigated by the use of a standard mixed payment system. Specifically, we find that the presence of medical liability pressure involves a proper optimal calibration of mixed payment system. Our findings have relevant policy implications for the correct calibration and implementation of the mixed payment system.

• Item Type: MPRA Paper
• Language: English
• Keywords: medical liability; defensive medicine; payment systems; physicians’ behaviour; laboratory experiment
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior; I - Health, Education, and Welfare > I1 - Health > I12 - Health Behavior; K - Law and Economics > K1 - Basic Areas of Law > K13 - Tort Law and Product Liability ; Forensic Economics

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