Doctors cut back hours when malpractice risk rises

When physicians perceive a risk of malpractice, it affects the number of hours they work and the number of patients they see to the equivalent of working two fewer hours per week for every 10 percent increase in liability, a study in the Journal of Law & Economics finds. While such a change may not seem great, it means that over the course of years, the lost work amounts to the equivalent of one physician out of 35 retiring without a replacement.

"When you aggregate that across all physicians, the total effect is quite large," says Mark Showalter, an economist who coauthored the study entitled "The Impact of Liability on the Physician Labor Market". Perceived change in liability could include, for example, an increase in the maximum damages that patients can receive in a case. The study showed that if there was a less perceived threat of malpractice, doctors would see more patients.

While there has been discussion for years about a federal law capping the amount of damages a patient can receive in a malpractice claim, a cap would probably not affect a doctor's perception of risk, given the huge swing in income levels between states.

The study combined data gathered by insurers about medical liability risks in each state and medical specialty, with physicians' responses to surveys about their workload and income. The study also found that doctors over 55, and those that have their own practices, are far more sensitive to changes in liability risk.

To learn more:
- read this press release
- here's the Journal of Law and Economics study