Health economists win
award for study of 'defensive medicine'
Two Stanford assistant
professors of health economics have been honored for
their research on how liability laws influence health
care costs and treatment.
The Kenneth Arrow Award in
Health Economics for 1997 was presented Jan. 2 in Chicago
at the annual meeting of the American Economics
Association to Daniel Kessler of the Graduate School of
Business and Mark McClellan of the departments of
economics and medicine. Both hold doctoral degrees in
economics, but Kessler also holds a law degree and
McClellan a medical degree. The two professors are the
core faculty of the Center for Health Policy of
Stanford's Institute for International Studies, and
McClellan directs the "outcomes research
program" of the Medical School's Center for
Evaluation of Health Practices and Advancement of Primary
Care.
Kessler and McClellan won
the award for their paper titled "Do Doctors
Practice Defensive Medicine?" published in the Quarterly
Journal of Economics in May 1996. An international
panel of health economists judged it to be the most
important research paper in the field during the previous
year.
Medical malpractice
liability laws were created to compensate patients who
suffer harm at the hands of negligent doctors and to
provide incentives for doctors to be responsible, but
they don't always have their desired effects and can
increase the cost of health care, the researchers
concluded.
They found that when
states reformed malpractice laws to put caps on damages
for pain and suffering, or to eliminate punitive damages,
hospital expenditures for heart disease patients were
reduced by about 5 percent, yet did not leave the
patients with worse health outcomes. They concluded that
fears of malpractice lawsuits prompt doctors to practice
"defensive medicine," giving more tests and
treatment than they would otherwise deem appropriate.
McClellan and Kessler are
also studying how technological changes in medicine have
affected costs and quality of care. They have organized
an international conference on that subject to be held on
campus Feb. 26 through 28, sponsored by the Center for
Economic Policy Research and the Graduate School of
Business.
The Arrow Award is named
in honor of Kenneth Arrow, Stanford professor emeritus
and winner of the Nobel Memorial Prize in Economic
Sciences. Arrow's research on risk and insurance is one
of the foundations of modern health economics, according
to Associate Professor Alan Garber, who directs the
Center for Evaluation of Health Practices and Advancement
of Primary Care. SR
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