Medical Malpractice in Public Healthcare Systems: an Empirical Investigation of Scheduled Damages
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Medical Malpractice in Public Healthcare Systems: An empirical investigation of scheduled damages Medische fouten in publieke gezondheidszorgsystemen: Een empirisch onderzoek naar normering van schadevergoeding Proefschrift ter verkrijging van de graad van doctor aan de Erasmus Universiteit Rotterdam op gezag van de rector magnificus Prof.dr. H.A.P. Pols en volgens besluit van het College voor Promoties De openbare verdediging zal plaatsvinden op maandag 30 juni 2014 om 11.30 uur door Paola Bertoli geboren te Vicenza, Italië 1 Promotiecommissie Promoters: Prof.mr.dr. L.T. Visscher Dr. M. Lippi Bruni Overige leden: Prof.dr. M.G. Faure LL.M. Prof.dr. L.A. Franzoni Prof.dr. N. Rickman Copromoter: Dr. V. Grembi 2 This thesis was written as part of the European Doctorate in Law and Economics programme A collaboration between 3 4 Acknowledgments I would like to express my sincere gratitude and recognition to my two supervisors, Veronica Grembi and Matteo Lippi Bruni for their advices and support. Chapter 4 is a co-authored work with Veronica Grembi. I am grateful to Veronica for her help in developing a full research project, for her assistance with the econometric methodology and analysis, and for constant encouragement. Her guidance and friendship have been invaluable to complete this work. I am thankful to Matteo Lippi Bruni for his insightful and detailed comments and feedbacks. I highly benefited from our frequent talks and discussions that have been very helpful especially to work out the structure of this dissertation. I would like also to thank Louis Visscher for his useful feedbacks and tips and for always being willing to answer all my questions. The financial support of the University of Bologna and of the European Doctorate in Law and Economics program is gratefully acknowledged. I am also thankful to Jennifer Arlen, Tom Baker, Rosa Ferrer, Tommaso Nannicini, Neil Rickman and Magdalena Th¨oni, the participants at the 2012 Italian Health Economics As- sociation Meeting, the 2012 Italian Association of Law and Economics Meeting, the 2013 workshop The Future of Law and Economics (Rotterdam), ISNIE 2013, the 15th Joint Sem- inar of EALE & The Geneva Association, the Eighth Conference of Empirical Legal Studies, the EDLE seminars and at the seminars at Bocconi University, Catholic University of Milan, Free University of Bozen, and Copenhagen Business School for their insightful comments and suggestions. Moreover, I would like to express my thanks to the EDLE staff, and especially Marianne and Lisa, for their help and kindness. Thanks to all the EDLE mates: Talita, Vijit, Dusko and all the others, (aside from being friends) for all the good times we had and for having made this experience much more enjoyable and much less tiring. In particular, I owe a special thanks to Peng Peng and Sergio, because they were patient enough to listen to all my ideas, complaints and ramblings about my work. I am also indebt to my mom and dad, Liliana and Paolo, for their patience and encour- agement. No matter how far I was and the decisions I made, they have always been at my side to support me and to make me feel their love. 5 6 Contents ListofAbbreviations.................................. viii ListofFigures...................................... x ListofTables...................................... xii 1 Medical Malpractice: An Introduction 1 2 Medical Malpractice and Liability in Italy 17 2.1Introduction.................................... 17 2.2TheHealthcareSystem.............................. 19 2.2.1 OrganizationalStructure......................... 24 2.2.2 MedicalPersonnel............................. 29 2.2.3 Healthcare Expenditure and Financing ................. 30 2.3 Medical Malpractice Liability .......................... 34 2.3.1 Civil Action or Criminal Prosecution? ................. 37 2.3.2 TheEuropeanExperience........................ 39 2.4MedicalMalpracticeCrisis............................ 45 2.4.1 MedicalMalpracticeInsurance...................... 47 2.4.2 Defensive Medicine . ......................... 51 2.5ConclusiveRemarks............................... 53 3 Limiting Noneconomic Damages As a Response to Malpractice Crisis 55 3.1Introduction.................................... 55 3.2PersonalInjuriesandNoneconomicDamages.................. 58 3.3 Pros and Cons of Capping Noneconomic Damages ............... 60 3.4KeyFeaturesofCapsDesign........................... 62 3.4.1 FlatCaps................................. 63 3.4.2 TieredCaps................................ 64 3.4.3 Schedules ................................. 65 3.5 Notion and Compensation of Noneconomic Damages under Italian Law . 67 3.5.1 TheEvolutionofNoneconomicDamagesCapsinItaly........ 70 3.6 Expected Effects and Background Literature .................. 74 iii 7 iv Contents 3.6.1 ClaimSeverity.............................. 74 3.6.2 ClaimFrequency............................. 75 3.6.3 Insurance Premiums ........................... 76 3.6.4 Insurance Profitability .......................... 78 3.6.5 Defensive Medicine ............................ 80 3.7ConclusiveRemarks............................... 84 3.8 Appendix ..................................... 86 4 Courts, Scheduled Damages and the Malpractice Insurance Market 95 4.1Introduction.................................... 95 4.2InstitutionalFramework............................. 98 4.2.1 The Acquisition of Malpractice Insurance in the Italian Healthcare Sys- tem..................................... 99 4.2.2 The Italian Judicial System ....................... 103 4.3ConceptualFramework.............................. 109 4.3.1 Empirical Strategy ............................ 112 4.4 The Dataset and Descriptive Statistics ..................... 117 4.5Results....................................... 123 4.5.1 Description of the Results ........................ 123 4.5.2 DiscussionoftheResults......................... 127 4.6 Concluding Remarks ............................... 131 4.7 Appendix A: Additional Tables and Figures .................. 134 4.8 Appendix B: The Award of Public Service Contracts in Italy ......... 143 4.8.1 ProvisionsonAdvertisingandTransparency.............. 144 4.8.2 Suitability of Applicants ......................... 145 4.8.3 Awarding Procedures . ........................ 146 4.8.4 ContractAwardCriteria......................... 152 4.8.5 Time Limits ................................ 154 4.8.6 BrokerageServices............................ 155 5 Courts, Scheduled Damages and Hospital Activity 157 5.1Introduction.................................... 157 5.2Background.................................... 160 5.2.1 Past Research on Defensive Medicine in Italy ............. 163 5.3TheoreticalFramework.............................. 164 5.4 Empirical Framework ............................... 169 5.4.1 OutcomeVariablesofInterest...................... 169 5.4.2 EstimationStrategy........................... 172 5.5 The Dataset and Descriptive Statistics ..................... 176 5.6Results....................................... 179 5.6.1 Hospitals................................. 180 5.6.2 Wards................................... 183 5.7 Concluding Remarks ............................... 186 8 Contents v 5.8 Appendix: Additional Tables and Figures .................... 189 6 Conclusions 193 Bibliography 203 9 10 List of Abbreviations AAI Alliance of American Insurers AMA American Medical Association AMAMI Associazione per i Medici Accusati di Malpractice Ingiustamente ANIA Italian Association of Insurance Companies ARITMIA Associazione Ricerca Italiana Tutela Medici Ingiustamente Accusati ASPC Italian Authority for the Supervision of Public Contracts BRFSS Behavioral Risk Factor Surveillance System CINEAS Consorzio Universitatio per l’Ingegneria nelle Assicurazioni DRG Diagnosis Related Group DSTLR Databse of State Tort Law Reforms EU European Union GAO U.S. General Account Office GDP Gross Domestic Product HHI Herfindahl-Hirschman Index IH Independent Hospital IMF Italian Ministry of Finance IMH Italian Ministry of Health IRAP Regional Tax on Production (Imposta Regionale sulle Attivit`a Produttive) IRPEF Nationa Personal Income Tax (Imposta sul Reddito delle Persone Fisiche) IRR Incidence Rate Ratios ISTAT Italian Institute of Statistics IV Instrumental Variable LEA Essential Levels of Care LHA Local Health Authority LHU Local Health Unit MEAT Most Economically Advantageous Tender MedPAC Medicare Payment Advisory Commission vii 11 viii List of Abbreviations MICRA Medical Injury Compensation Reform Act MLM Medical Liability Monitor MRSA Methicillin Resistant Staphylococcus Aureus Infections NAIC National Association of Insurance Commissioners NCHS National Center for Health Statistic NDF Natality Detail File NHDS National Hospital Discharge Survey NHS Healthcare National Service NHSLA National Health Service Litigation Authority NIS Nationwide Inpatient Sample NPDB National Practitioner Data Bank OECD Organisation for Economic Co-operation and Development OJ Official Journal of the European Union OLS Ordinary Least Squares ONIAM Office national d’indemnisation des accidents m`edicaux OTA Office of Technology Assessment PIAA Physician Insurance Association of America QALY Quality Adjusted Life Year QR Quantile Regression RH National Institute for Scientific Research SEER Surveillance Epidemiology and End Results TED Tenders Electronic Daily TH Teaching Hospital TSLS Twostage Least Squares U.S. United States of America UK United Kingdom VAT Value Added Tax 12 List of Figures 2.1TheItalianNationalHealthcareSystem...................