Recent malpractice premium hikes and federal tort reform proposals have focused attention on medical liability costs. One frequent justification for tort reform proposals is the potential impact of liability on defensive medicine. There is, however, scant and conflicting evidence on whether malpractice risk alters physician practices. In this paper, I examine whether malpractice risk alters the procedure choices of obstetricians, who face one of the highest rates of malpractice lawsuits among medical specialties. By focusing on obstetricians, I can observe the impact of malpractice risk on the use of procedures such as cesarean sections, prenatal care visits, diagnostic tests, and so on. Because the measured malpractice risk may signal something unobserved about physician quality or practice style, I use malpractice claims against doctors with specialties other than obstetrics and gynecology (ob-gyn) as an instrument for ob-gyn claims. I find that cesarean section rates and most other measures of physician behavior are not sensitive to medical malpractice risk.
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