In: Operations Management
How does the existing U.S. legal system, as well as the need for professional liability insurance coverage, impact patient care, physician behavior, and healthcare costs?
In U.S. medical care, there was no structured form of patients care. If a patient would go to hospital for some minor issue, physicians would insist them to take various tests just to make their machines run and to increase their work flow, which is very unethical. Due to this malpractices, U.S. legal system has established some objectives - first to compensate those patients who are injured from improper medical care and second to prevent those malpractices by taking proper action. But the current compensation system is not effective as very few patients would get some reward because of malpractice injury and some patients can't show the evidence of negligence itself.
The liability system helps doctors to take care of the patients who has got injury during treatment and also get some compensation because of that. But the fact is that may be because of the lack of proper stewardship, medical practitioners would show negligence and this leads patients to get either too much care or too little care. So, if due to the legal system, the healthcare sector would increase care, it would be with high physician precaution. Besides, when there is less fault in medical statement, it may help to reduce the social costs of the physicians and doctors. Also, medical practitioners would change their behavior towards malpractices when the legal system would be too tight and when it would affect their incentives. So, it can be said that reformation of legal system actually changes physicians behavior and thus they started to defend against malpractices and thus reduces their chances of being sued.