Malpractice reforms in Texas, Georgia, and South Carolina, which changed the liability standard for emergency care from ordinary negligence to gross negligence, provide unusually broad protection for emergency physicians. We did not find evidence that these reforms decreased practice intensity, as measured by the rate of the use of advanced imaging, by the rate of hospital admission, or in two of three cases, by average charges. Although there was a small reduction in charges in one of the three states (Georgia), our results in aggregate suggest that these strongly protective laws caused little (if any) change in practice intensity among physicians caring for Medicare patients in emergency departments.

We chose study outcomes on the basis of defensive practices that have been identified by emergency physicians in surveys.7,8 In one such survey,7 70% of the respondents said they often practiced defensively; of these, 63% cited ordering an imaging study as their most recent act of defensive practice, 14% mentioned recommending hospital admissions, and the remainder cited ordering other tests that would increase per-visit charges.

Overuse of advanced imaging is cited as a common defensive practice across many specialties.7,8,28 In a Massachusetts survey, emergency physicians estimated that 30% of CT scans and 19% of MRIs ordered were for “defensive purposes.”8 Other specialists offered similar estimates.8 Our results challenge the validity of these assertions, or at least suggest that the use of emergency department imaging is unlikely to be affected by malpractice reform alone.

One might argue that physicians in the reform states do not believe that they are fully protected. This is true to some degree, but the critique may be applied to any other law. For example, some have advocated for “safe harbor” laws, which would provide specific protections to physicians who adhere to evidence-based guidelines. If physicians do not believe that they are adequately protected by a legal standard of gross negligence, then they also might not believe that they are protected by a statute that provides a safe harbor for evidence-based guidelines. Indeed, a recent study showed that evidence-based guidelines would be applicable to only a minority of malpractice claims.29

Typical interpretations of the gross negligence standard are that defendants are protected if they exercise “even a slight degree of care” or a “degree of care which every man of common sense, however inattentive he may be, exercises under the same or similar circumstances.”15 It seems likely that physicians would correctly perceive that any practice that could be defended as concordant with guidelines would also be defendable as not grossly negligent. Although data on the number of malpractice claims specifically related to emergency department care are unavailable, the 2003 Texas reforms (which included provisions that affected other specialties) were associated with a 60% overall reduction in malpractice claim filings and a 70% reduction in malpractice payments.12 Substantial commentary (e.g., legal blogs and newspaper reports) supports the notion that the legal community in the reform states characterizes the gross negligence standard as providing “virtual immunity” to emergency physicians, although it is clear that some suits are still being filed.15,16,30

Our study was limited to the fee-for-service Medicare population and therefore applies mainly to the care of patients 65 years of age or older. However, it is known that temporal and geographic trends in emergency department care of Medicare fee-for-service patients parallel those in the broader population.31 Furthermore, the Congressional Budget Office has estimated that the potential savings from reduced defensive practice is higher for fee-for-service Medicare patients than for an all-payer mix.11 Still, the effect of state laws on defensive medicine in non-Medicare (primarily younger) patients may be different.

Previous attempts to estimate the effect of other types of malpractice reform such as caps on noneconomic damages (which arguably offer physicians less real or perceived protection) produced inconsistent results. Such studies typically used state-level rather than encounter-level data and did not choose study outcomes identified as defensive practices by physician self-reports.12,32 Because we controlled for a wide range of potential confounders, the main risk of making an incorrect inference from the results of this study lies in the uncertainty of the counterfactual situation. To compare what happened in reform states with what would have happened without reform, we made two key assumptions: that any systematic change during the study period that affected hospitals in reform states but not hospitals in control states was a result of the reform itself and that there was no systematic change that affected hospitals in control states (on average) but not those in reform states. With regard to total charges, we cannot exclude the possibility that state-level differences in billing practices might have developed during the study period. For example, “up-coding” (the use of higher-intensity codes to maximize revenue) is thought to have increased during the study period,33 and it is possible that this increase occurred more in some states than in others. Because hospital admission and advanced imaging are hard end points, they seem to be less susceptible than emergency department charges to confounding.

The specialty-specific nature of our study adds to the precision of the analysis but limits generalizability. Although available data suggest that emergency physicians face an average risk of being sued,34 the resource-intensive nature of the emergency department may amplify the costs of defensive practice. For example, emergency physicians face far fewer barriers than primary care providers to ordering advanced imaging tests, and they play a gatekeeper role to costly hospital inpatient admission.14 Other specialties might be more or less responsive to similar changes in the legal climate.

Cost reductions associated with defensive medicine represent only one of many reasons that a state might choose to enact malpractice reform. We do not address other possible positive or negative effects of reform (e.g., altered regional supply of physicians, improved physician job satisfaction, or less compensation for injured patients). Also, we did not attempt to evaluate the effect of reform on rates of medical errors or health outcomes. Evidence regarding the effect of malpractice reform on the quality of care has been mixed.10,13

In the context of the existing literature, our findings suggest that physicians are less motivated by legal risk than they believe themselves to be. Although a practice culture of abundant caution clearly exists, it seems likely that an aversion to legal risk exists in parallel with a more general risk aversion and with other behavioral, cultural, and economic motivations that might affect decision making. When legal risk decreases, the “path of least resistance” may still favor resource-intensive care. Our results suggest that malpractice reform may have less effect on costs than has been projected.