Thesis
Are Florida physicians substituting bankruptcy protection for private malpractice insurance?
Washington State University
Master of Arts (MA), Washington State University
2007
Handle:
https://hdl.handle.net/2376/100883
Abstract
This paper proposes a model to explain the incentives which motivate a significant number of Florida physicians to practice medicine without malpractice insurance. The model demonstrates that, through the discharge of tort related debt, bankruptcy can serve as a form of insurance for physicians. Bankruptcy provides an upper boundary for the actual payment made on malpractice claims. The bankruptcy boundary reduces the expectation of loss in a given period because claims above the bankruptcy threshold are partially discharged. The premium rates on insurance include the full value of these claims, thus the expected loss increases with the purchase of insurance. Using a state contingent insurance model, the paper demonstrates that the decrease in expected claim value from forgoing insurance will motivate physicians to underinsure or practice "bare". An empirical analysis of data available on Florida malpractice claims does not show significant results to support the hypothesis that expected claim value is reduced by practicing uninsured. However, examination of the distribution of claims by specialty suggests that physicians who specialize in fields where very high value claims are more likely have greater incentives to practice uninsured. This is consistent with the notion that they are practicing uninsured so that bankruptcy will serve as an upper boundary to their loss. The paper further suggests that the use of bankruptcy as a substitute for private malpractice insurance by some physicians can improve efficiency. Others have argued that the medical liability system is an inefficient method of insuring patients against iatrogenic injury. The bankruptcy result allows patients and physicians to contract around the potentially inefficient liability standards. This should improve efficiency, so long as patients are well informed.
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Details
- Title
- Are Florida physicians substituting bankruptcy protection for private malpractice insurance?
- Creators
- Nicholas Geoffrey Crain
- Contributors
- Robert E. Rosenman (Degree Supervisor)
- Awarding Institution
- Washington State University
- Academic Unit
- Economic Sciences, School of
- Theses and Dissertations
- Master of Arts (MA), Washington State University
- Publisher
- Washington State University; Pullman, Wash. :
- Identifiers
- 99900525132701842
- Language
- English
- Resource Type
- Thesis