Does Experience Rating Improve Obstetric Practices? Evidence from Italy

Health Econ. 2015 Sep;24(9):1050-64. doi: 10.1002/hec.3210. Epub 2015 Jun 15.

Abstract

Using inpatient discharge records from the Italian region of Piedmont, we estimate the impact of an increase in malpractice pressure brought about by experience-rated liability insurance on obstetric practices. Our identification strategy exploits the exogenous location of public hospitals in court districts with and without schedules for noneconomic damages. We perform difference-in-differences analysis on the entire sample and on a subsample which only considers the nearest hospitals in the neighborhood of court district boundaries. We find that the increase in medical malpractice pressure is associated with a decrease in the probability of performing a C-section from 2.3 to 3.7 percentage points (7-11.6%) with no consequences for medical complications or neonatal outcomes. The impact can be explained by a reduction in the discretion of obstetric decision-making rather than by patient cream skimming.

Keywords: C-sections JEL K13; I13; K32; experience rating; medical liability insurance; scheduled damages.

MeSH terms

  • Adult
  • Cesarean Section / statistics & numerical data
  • Female
  • Humans
  • Insurance, Liability / economics
  • Insurance, Liability / statistics & numerical data
  • Italy / epidemiology
  • Malpractice / economics
  • Malpractice / statistics & numerical data*
  • Models, Econometric
  • Obstetrics / economics
  • Obstetrics / standards
  • Obstetrics / statistics & numerical data*
  • Practice Patterns, Physicians' / economics
  • Practice Patterns, Physicians' / statistics & numerical data
  • Pregnancy
  • Pregnancy Outcome / economics
  • Pregnancy Outcome / epidemiology