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IZA Discussion Paper No. 18455
March 2026
How Does Tort Reform Affect Health Care Delivery
Charles Courtemanche, Joseph Garuccio

Health care costs in the U.S. have grown dramatically over the past several decades, with one possible cause being physicians providing unnecessary services out of fear of being sued for malpractice – a phenomenon known as “defensive medicine”. States responded by enacting different types of tort reforms. This paper reviews the literature on the effects of these reforms on outcomes related to malpractice risk, quantity and quality of health care services, overall utilization and expenditures, physician supply, and patient affordability. We use Google Scholar to identify papers within this scope and use either associational or quasi-experimental quantitative methods. The preponderance of evidence points towards non-economic damage caps reducing malpractice risk, quantity of services (aside from diagnostics and obstetrics), and overall health care utilization and expenditures while increasing physician supply and not having detrimental effects on patient outcomes. In general, the effects of other types of reforms are less clear. The literature would benefit from further research utilizing methodological advances related to combining machine learning with causal inference and eliminating bias from heterogeneous treatment effects.

Communications
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Network Coordination
Christina Gathmann
christina.gathmann@liser.lu

The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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