Health care spending in the US vs UK: The roles of medical education costs, malpractice risk and defensive medicine

We analyze how two key factors contribute to the high cost of healthcare in the US relative to the UK: (i) the higher private cost of medical education, and (ii) the higher risk of malpractice litigation. To assess the role of these factors we formulate, calibrate and simulate an equilibrium model of physician wages and the supply of medical graduates, work hours and treatment decisions of practicing physicians, and malpractice risk and...