The House on Tuesday voted to repeal ObamaCare’s medical device tax, a provision that members of both parties have criticized as harming innovation.
The House voted 283 to 132 to repeal the 2.3 percent tax on sales of medical devices, with some Democrats joining Republicans to approve the measure. 57 Democrats voted for the measure.
We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active-duty or not—that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.