Malpractice liability, along with medical technology and payment system distortions, regularly figures among the most-cited reasons for escalating health-care spending in the United States. On the one hand, Harvard economist Amitabh Chandra conservatively estimates that upwards of $60 billion, or 3 percent of total health care costs ($1.8 trillion), is spent annually as a result of direct litigation and indirect defensive medicine costs. On the other hand, tort reform advocates place the figure at $200 billion by extrapolating, to the entire U.S. population, the results of research conducted by Stanford professor Dan Kessler and Mark McClellan. Their 1996 study shows that tort reforms reduced provider liability costs for Medicare heart patients by 5 to 9 percent.

At the heart of these debates is the following question. Does medical malpractice liability achieve its dual goal of compensating victims of medical injuries and deterring medical errors, or does it merely encourage wasteful defensive medicine without improving patient health? Despite considerable empirical research, there is little evidence that malpractice litigation deters medical negligence. The evidence is much stronger—though still hotly debated—that malpractice fears actually encourage physicians to engage in defensive medicine. My work at Shorenstein APARC explores whether malpractice pressures affect physician behavior, patient health, and health care costs in Asia. Studying physicians’ response to legal changes in Taiwan, I find that greater malpractice liability may, under certain circumstances, prompt physicians to perform more services without necessarily improving patient health.

In particular, I focus on how increased medical malpractice liability affects physicians in Taiwan who provide treatment to pregnant women. I have studied how a series of court rulings as well as an amendment to Taiwanese law between 1997 and 2004 impacted physicians’ test-ordering behavior and decisions to perform Caesarian sections. Traditionally, Taiwanese doctors are held accountable for medical malpractice under two bodies of law: tort law in the Civil Code, and criminal law for harm resulting from negligent acts in the course of professional operations. The latter, prosecutorial approach is rare among industrialized nations.

In January 1998, a Taipei District Court decision in favor of plaintiffs in a civil suit for damages sent shockwaves through the medical community. The district court judge disregarded the traditional tort requirement of proving the defendant’s negligence (or fault), and applied the “strict liability” doctrine of the Consumer Protection Law to impose liability on a medical provider without any showing of wrongdoing. The court decision—subsequently affirmed by the Taipei High Court on September 1, 1999 and by the Supreme Court on May 10, 2001—sparked resentment among medical professionals. Passions flared in heated debates between medical and legal scholars about whether medical services should be considered a covered “service” under the Consumer Protection Law. Economists and legal academics questioned whether the traditional justifications for imposing strict liability apply in the highly unpredictable practice of medicine, especially in obstetrics. The saga concluded in April 2004, when the legislature amended the Medical Law to require negligence or fault in medical malpractice cases.

My research considers the effect of these court rulings and legal amendments on physicians’ test-ordering behavior and their propensity to perform Caesarean sections. I identify two sources of variation in perceived risks of malpractice liability: (1) the differences between the level of exposure to malpractice risks due to the ownership structure and size of the physicians’ place of practice; and (2) the differences in perceived risks based on the physicians’ geographical location.

My results are consistent with the existence of defensive medicine. First, with respect to their propensity to increase laboratory tests and reduce Caesarean sections, physicians who own their clinics (“physician-owners”) in Taiwan reacted more strongly to the legal changes than did physicians who are salaried employees at larger hospitals (“nonowners”). Physician-owners’ behavior did not change, however, in discretionary expenditures that were not associated with defensive medicine. Second, physician-owners working in areas under the jurisdiction of the Taipei District Court reacted more strongly to legal change than did those practicing in Kaohsiung, Taiwan’s second largest city, at the opposite end of the island.

The negative connection between the likelihood of Caesarean deliveries and increased malpractice liability deserves special mention, since most published studies find a positive association between malpractice liability risks and Caesarean rates. However, economists Janet Currie and Bentley MacLeod at Columbia University suggest that reforms in which liability is closely aligned with defendant’s actual levels of care may produce the opposite effect. In the Taiwan context, increased medical malpractice liability accrues directly to the physician-owners. Since Caesarean sections are generally riskier than natural deliveries, it seems logical that higher tort liability in Taiwan may actually decrease the likelihood of deliveries by Caesarean sections. In this sense, my study confirms Currie and MacLeod’s predictions and empirical results.

My work contributes to our understanding of health law and policy in several concrete ways. First, I add support to the existence of defensive medicine, even in a non-Common Law jurisdiction. Since I focus on Taiwan—an environment that lacks malpractice insurance, in which physicians are either owners or employees at providers of varying sizes—my research isolates the pure effect of malpractice liability to a greater extent than do many current studies. Second, I show that interaction between the payment and legal systems may either enhance or mitigate the hypothetical pure effects of legal policies. In a fee-for-service system, physicians subject to higher malpractice risks appear much more willing to increase laboratory tests than to reduce profitable Caesarean sections. Third, my research indicates that, by altering physicians’ exposure to risks, different organizational forms and ownership structures of health care provision may affect defensive medicine at differing rates.

In sum, the practice of “defensive medicine” appears not to be a uniquely American phenomenon. Indeed, it may also play a role in health care cost escalations in Asia, especially under heightened physician liability regimes.

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Shorenstein APARC Dispatches are regular bulletins designed exclusively for our friends and supporters. Written by center faculty and scholars, Shorenstein APARC Dispatches deliver timely, succinct analysis on current events and trends in Asia, often discussing their potential implications for business.

Tracy Quek from the U.S. Bureau at The Straits Times Singapore Newspaper discusses the "Divided Memories and Reconciliation Project," a three-year project to examine how the main players in North-east Asia - China, Japan, South Korea and Taiwan - along with the United States, form their views of the past, or what the scholars call "historical memories."

In April 2005, fierce anti-Japanese protests broke out in China.

Triggered in part by Japan's approval of newly revised history textbooks which glossed over the Japanese wartime abuses of six decades ago, the demonstrations were the most provocative upsurge of anti-Japanese unrest China had seen in years.

It was not the first time problems of the historical sort had sparked trouble between the neighbours in North-East Asia.

But researchers at Stanford University's Walter H. Shorenstein Asia-Pacific Research Centre hope that their work will damp down future outbursts and open a path to lasting reconciliation.

Led by director Gi-Wook Shin and co-director Daniel C. Sneider, researchers are completing an ambitious three-year project to examine how the main players in North-east Asia - China, Japan, South Korea and Taiwan - along with the United States, form their views of the past, or what the scholars call "historical memories."

Entitled Divided Memories and Reconciliation, the project began in 2007 and is divided into three phases. The first stage involves comparing how shared historical events are depicted in history textbooks of the five societies, as history education plays a crucial role in shaping citizens' perspectives on the past.

The second stage, which began last year, looks at the treatment of the 1931-1951 wartime period in the films of China, Japan, South Korea, Taiwan and the US.

In the third phase, researchers will survey elite opinion makers in China, Japan, South Korea and the US for their views on historical issues.

The study, said Mr Sneider, stems from the understanding that unresolved historical issues are drivers of regional tension, and continue to bedevil relations to this day.

"The past is very much part of the present. Unresolved problems of the past feed mistrust and suspicion," he told The Sunday Times. "History issues also feed rising nationalism that can undermine government efforts to repair damaged relations."

Despite growing economic and cultural ties, wounds inflicted in the time of war and colonialism still fuel anti-Japanese sentiment in China and South Korea. The outcome of China's civil war resonates today in tension between the mainland and Taiwan.

The goal was not to forge a common historical account for the region or reach a consensus on specific events, said Mr Sneider. He noted that such attempts by historians and government committees have had limited success.

Stanford University historian Peter Duus explained: "Writing a common history is not feasible politically because the teaching of history in East Asian countries is tied to building and strengthening national identity."

Instead, Stanford researchers felt it was more fruitful to "try to recognise and understand how each society has developed its own distinctive memory of the past, and how that has affected its national identity and relations with others", commented Prof Shin.

Prof Duus and Prof Shin were writing in separate chapters included in a soon-to-be-published edited volume on the textbook study. Parts of the book were seen by The Sunday Times.

To facilitate the textbook study, researchers translated into English the most widely circulated high school history textbooks used in China, Japan, Taiwan, South Korea and the U.S.

Focusing on the period from the beginning of the Sino-Japanese war in 1931 until the formal end of the Pacific War with the San Francisco Peace Treaty in 1951, the researchers selected eight historical issues for translation.

These included the Japanese capture and occupation of Nanjing, China in 1937 and the atomic bombing of Japan in 1945.

Researchers included the US in the textbook study because of its participation in the Pacific War, as well as its role in shaping post-war dynamics in the region.

Looking at the translated textbook excerpts side by side would allow people to compare how historical memory is shaped in the different school systems for the first time, said Mr. Sneider.

The team then brought together historians and textbook writers, including those from Japan and China, in a conference in February last year to analyse the treatment of history in thetextbooks, and their impact on regional relations.

The experts found that the region's history texts were far from objective.

"Textbooks have been written specifically to promote a sense of national identity, and the politics of nationalism invariably affects their writing," wrote Professor Shin.

Both Taiwan and mainland China textbooks, for example, play up the victory over colonialism and imperialism. But while "both agree the defeat of the Japanese army ended a century of humiliation and established China as an international power, the path to victory is described differently and so is the outcome," Professor Duus commented.

The deepest disagreements between the mainland and Taiwanese textbooks are about the nature and effectiveness of Chinese resistance to the Japanese. The Chinese texts played down the role of the Kuomintang, while the Taiwanese texts make scant mention of the Chinese Communist Party's guerilla bases.

Compared with the Taiwanese textbooks, the Chinese texts dwelled on the brutality of the Japanese military in more graphic detail.

American textbooks, in general, were better than the Asian textbooks at encouraging critical thought. "You have a debate over the decision to drop the atomic bomb on Japan, or discussions of the events that led to Pearl Harbour, for example," Mr Sneider noted.

In contrast with Chinese and US textbooks, the tone in Japanese textbooks is "muted, neutral, bland", Prof Duus wrote. While they make no effort to conceal the brutality of Japanese forces towards occupied peoples, they do not give students much of an analytical construct to understand events, observed Mr. Sneider.

What the study made obvious was that the problem was not just with the Japanese historytextbooks, even though they have received most of the criticism. Experts point out that the textbooks which whitewashed wartime abuses are used in less than 2 per cent of Japanese schools.

"This is a problem for everybody," said Mr Sneider. "We are all participants in creating a divided, and to some degree, implicitly distorted understanding of the past."

The edited volume on the textbook study - which includes discussions from the February 2008 conference, and translated textbook excerpts - will be out next year. A teaching supplement based on the textbook study has been prepared for use by high school teachers in the US.

Mr Sneider said researchers hoped their work would show that "we need to take a dispassionate, comparative approach to history that recognises there is no single historical truth that everybody has to subscribe to".

He added: "There is room for discussion which can hopefully lead to reconciliation."

In December 2009, the Asia Health Policy Program celebrates the first anniversary of the launch of the AHPP working paper series on health and demographic change in the Asia-Pacific. The series showcases research by AHPP’s own affiliated faculty, postdoctoral fellows, and visiting scholars, as well as selected works by other scholars from the region.

To date AHPP has released eleven research papers in the series, by authors from China, South Korea, Thailand, Taiwan, Pakistan, and the US, with more on the way from Japan and Vietnam. Topics range from “The Effect of Informal Caregiving on Labor Market Outcomes in South Korea” and “Comparing Public and Private Hospitals in China,” to “Pandemic Influenza and the Globalization of Public Health.”  The working papers are available at the Asia Health Policy website.

AHPP considers quality research papers from leading research universities and think tanks across the Asia-Pacific region for inclusion in the working paper series. If interested, please contact Karen Eggleston.

How do countries in the vast and diverse Asia-Pacific region differ in “prescribing cultures”? How do health systems in the region balance access to pharmaceuticals with incentives for innovation? How do the forces of globalization shape, and in turn are shaped by, cultural legacies about health and health care? These are the key questions addressed by the new Asia Health Policy Program book, Prescribing Cultures and Pharmaceutical Policy in the Asia Pacific.

AHPP held a book launch event September 23rd with three authors of the book detailing how pharmaceutical policies are interlinked globally and at the same time deeply rooted in local culture.