Reducing Medical Malpractice by Targeting Physicians Making Medical Malpractice Payments

Some states use physicians' histories of medical malpractice payments to try to reduce the incidence of medical malpractice (and for other reasons). At least two types of policies fall into this category: using payments to decide which physicians will be investigated, and possibly sanctioned, by the state medical board; and making information about individual physicians' payment histories available to the public. Previous literature suggests that such policies will not be very effective because the link between medical malpractice and medical malpractice payments appears weak. Unlike previous researchers, we examine this issue directly and quantitatively. To do so, we develop a micro‐simulation model of the random processes determining medical outcomes, claiming rates, and payment rates, using information from several strands of literature to calibrate its parameters. To examine sensitivity of our predictions to changes in assumptions, we also consider 14 alternative models. For each of the 15 cases, we simulate data for a population of 100,000 physicians and analyze the simulated data. We find that neither type of policy will substantially reduce the population rate of malpractice and that the policy of publicizing payment histories could, in principle, backfire.