This Article analyzes the incentives of medical care organizations (MCOs) as healthcare intermediaries or, in a technical language, as platforms in a two-sided market for medical care. This feature of MCOs has been largely unnoticed, despite its profound implications for the quality of care and the law of medical malpractice. In what follows, I identify these implications and combine them with other factors - both legal and economic - that affect the quality of medical care under MCOs' framework. This discussion singles out a serious economic anomaly that the law of medical malpractice aggravates, instead of rectifying. This anomaly is the virtual absence of incentives on the part of MCOs and their doctors to compete with each other over the quality of medical care. The Article therefore offers a semi-regulatory law reform proposal that would unlock that competition.
This Essay exposes and analyzes a hitherto overlooked cost of the current design of tort law: its adverse effect on innovation. Tort liability for negligence, defective products, and medical malpractice is determined by reference to custom. We demonstrate that courts’ reliance on custom and conventional technologies as the benchmark of liability chills innovation and distorts its path. Specifically, the recourse to custom taxes innovators and subsidizes replicators of conventional technologies. We explore the causes and consequences of this phenomenon and propose two possible ways to modify tort law in order to make it more welcoming of innovation.
Torts and Innovation, 107 Michigan Law Review 285-315 (2008) (with Gideon Parchomovsky) download