The impact of medical errors on physician behavior: evidence from malpractice litigation.

How do medical errors affect physician behavior? Despite the importance of this question empirical evidence about it remains limited. This paper studies the impact of obstetricians' medical errors that resulted in malpractice litigation on their subsequent choice of whether to perform a C-section, a common procedure that is thought to be sensitive to physician incentives. The main result is that C-section rates jumped discontinuously by 4% after a medical error, establishing an association between medical errors and treatment patterns. C-section rates continued to increase afterwards, bringing the cumulative increase 2.5 years after a medical error to 8%.