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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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Volume 8, Issue 2 (Jul 2008)


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Patient Welfare under the Legal Standard of Care

Anja Olbrich
  • 1Institute of Social Medicine and Health Economics, Otto-von-Guericke University,
Published Online: 2008-07-28 | DOI: https://doi.org/10.2202/1935-1682.1827


Presuming that the standard of care reflected in the physician reimbursement scheme harms patients, German and US courts enforce their traditional legal standard of care in malpractice lawsuits. This paper summarizes the literature, evaluates the legal standard in microeconomic terms and determines the insurers' and courts' impact on patient welfare. The legal standard proves to be inefficiently high. By contrast, patient welfare is maximized when insurers apply a two-part reimbursement scheme that induces physicians not to comply with the legal standard. If this is infeasible, another reimbursement scheme is suggested.

Keywords: medical malpractice; negligence rule; supply-side cost sharing; hand rule

About the article

Published Online: 2008-07-28

Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, DOI: https://doi.org/10.2202/1935-1682.1827. Export Citation

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