The effects of liability on the practice patterns of obstetricians and gynecologists

During the past decade, there has been growing concern that obstetricians and gynecologists have responded to increasing liability risks primarily by reducing or eliminating the obstetrical component of their practices. This study used multivariate techniques to assess the association between regional differences in the liability climate and the obstetrical practice choices of obstetricians. The results of the behavioral model of physicians practice choice which is the analytical framework for this analysis are ambiguous: physicians may theoretically increase or decrease obstetrical practice due to worsening liability climate. Physicians may increase obstetrical practice because the reduction in income associated with higher premiums may drive them to provide more of the riskier and more highly-paid obstetrical services which constitute one component of their practices. They may decrease obstetrical practice if the increased expected loss associated with a higher probability of a claim associated with a worsening liability climate dominates the income effect. The empirical analysis used data from a 1987 national survey of members of the American College of Obstetricians and Gynecologists. Controlling for physician characteristics and market level variables which affect the demand and supply of obstetrical services, there was no evidence that a more severe liability climate in a state was associated with higher probability of the physician having no obstetrical practice or fewer deliveries or fewer high-risk deliveries. Rather, a worse liability climate was usually associated with a higher probability of obstetrical practice and a higher volume of obstetrical cases. Physician-specific factors such as age, gender, and practice setting, rather than the liability climate or other market-level factors, were more significant predictors of the practice choices of physicians. The results of this analysis suggest that in spite of a worsening liability climate, obstetricians continued to provide obstetrical care, and a worsening of the liability climate may have been associated with an increase in their share of the market for obstetrical services