When IT Creates Legal Vulnerability: Not Just Overutilization but Underprovisioning of Health Care Could be a Consequence

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Publication History

Received: April 4, 2019
Revised: November 11, 2020; August 26, 2020
Accepted: October 3, 2021
Published Online as Articles in Advance: August 29, 2022
Published in Issue: September 1, 2022


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We study the potential impact of the legal vulnerability created by ubiquitous information technology (IT) and provide insights into its unintended consequences in a typical healthcare screening context. Screening policies determine the level of care provision (i.e., whether to conduct a test) based on patient risk information. If IT shares risk information with physicians in the testing stage, follow-up decisions may be more accurate. Yet, physicians may also face heightened legal risk from increased information visibility. In this context, we examine the socially optimal screening (based on risk information) and follow-up policies (based on risk and test information). Litigation is generally associated with the overutilization of health care because of physicians’ defensive medicine practices. In contrast, we find that the strategic underprovisioning of health care through screening policies could be a consequence of information sharing in the presence of litigation concerns. The underprovisioning of health care is aggravated if the precision of risk information relative to that of the medical test increases or the physician becomes more self-interested and less patient oriented. However, limits on malpractice damages can alleviate the underprovisioning of health care.

Additional Details
Author Yeongin Kim, Mehmet U.S. Ayvaci, Srinivasan Raghunathan, and Turgay Ayer
Year 2022
Volume 46
Issue 3
Keywords Health IT, medical litigation, information sharing, standards, game theory
Page Numbers 1483-1516
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