Strict Liability for Medical Injuries? The Impact of Increasing Malpractice Liability on Obstetrician Behavior

The extent and existence of defensive medicine in the face of medical malpractice liability pressure is a perennial subject of both policy and academic debate. In this paper, I investigate the impact of a series of court rulings in Taiwan that increased physicians’ liability risks, and a subsequent amendment to the law that reversed the courts’ rulings, on physicians’ test-ordering behavior and propensity to perform Caesarean sections. I find that physicians faced with higher malpractice pressure increased laboratory tests as expected, but unexpectedly reduced Caesarean sections. The reduction in Caesarean deliveries may be due to the fact that liability risks were more closely aligned with physicians’ standard of care after the court rulings. After the law was amended to negate the court decisions, physicians reversed their previous behavior by reducing laboratory tests and increasing Caesarean deliveries. This pattern of behavior is highly suggestive of the existence of defensive medicine among physicians in Taiwan. *I am grateful for the many helpful comments and suggestions from Karen Eggleston, Jason Snyder, Dan Ho, and the fellows and scholars at the Asia Health Policy Program at the Shorenstein Center at Stanford University. This study is based in part on data from the National Health Insurance Research Database provided by the Bureau of National Health Insurance, Department of Health and managed by National Health Research Institutes. The interpretation and conclusions contained herein do not represent those of Bureau of National Health Insurance, Department of Health or National Health Research Institutes.