title: Torts, expertise, and authority: liability of physicians and managed care organizations.
abstract: We examine optimal individual and entity-level liability for negligence when expected accident costs depend on both the agent's level of expertise and the principal's level of authority. We consider these issues in the context of physician and managed care organization (MCO) liability for medical malpractice. Under current law, physicians generally are considered independent contractors and hence MCOs are not liable for negligent acts by physicians. We find that the practice of reviewing the medical decisions of physicians affects their incentives to take care, which in turn implies that it is efficient for MCOs to be held liable for the torts committed by their physicians.
authors.affiliation: New York University, USA. jennifer.arlen@nyu.edu
authors.forename: Jennifer
authors.initials: J
authors.lastname: Arlen
authors.forename: W Bentley
authors.initials: WB
authors.lastname: MacLeod
mesh_terms: D002983:Clinical Competence / Q000191:economics; D003284:Contract Services; D003363:Cost Control; D017047:Cost Sharing; D006801:Humans; D016365:Liability, Legal / Q000191:economics*; D008318:Malpractice / Q000191:economics*; D008329:Managed Care Programs / Q000191:economics*; D018803:Models, Economic; D010820:Physicians / Q000191:economics*; D011787:Quality of Health Care / Q000191:economics; D014600:Utilization Review / Q000191:economics*