Does Experience Rating Improve Obstetric Practices? Evidence from Geographical Discontinuities in Italy
Abstract: Using data from 2002 to 2009 inpatient discharge records on deliveries in the Italian region of Piedmont, we assess the impact of an increase in malpractice pressure on obstetric practices, as identi fied by the introduction of experience-rated malpractice liability insurance. Our identifi cation strategy exploits the exogenous location of public hospitals in court districts with and without schedules for noneconomic damages. We perform di fference-in-di fferences analysis on the entire sample and on a subsample which only considers the nearest hospitals in the neighborhood of court district boundaries. We fi nd that the increase in medical malpractice pressure is associated with a decrease in the probability of performing a C-section from 2.3 to 3.7 percentage points (7% to 11.6% at the mean value of C-section) with no consequences for a broadly defi ned measure of complications or neonatal outcomes. We show that these results are robust to the di fferent methodologies and can be explained by a reduction in the discretion of obstetric decision making rather than by patient cream skimming.
