Medical malpractice: an empirical examination of the litigation process

New data on medical malpractice claims against a single hospital in which a direct measure of the quality of medical care is available are used to investigate the roles of the negligence rule and incomplete information in the dispute settlement process in medical malpractice. We find that the quality of medical care (negligence) is an extremely important determinant of defendants' medical malpractice liability. More generally, we find that the data are consistent with a model in which plaintiffs are poorly informed ex ante about whether there has been negligence, file suit to gather information, and either drop the case if they find that negligence was unlikely or settle for a positive payoff if they find that negligence was likely. We also find that the cases are resolved earlier in the litigation process when the parties are more certain, one way or the other, about the likelihood of negligence.     

Back where we belong

If you were the CEO of Pitney Bowes, the postage meter maker, how would you envision the future of the business? The company has an undeniable core competence in the solutions it provides to high-volume postal service users. But with snail mail on the decline, some would say that core has about as much future as the buggy whip. In this article, Pitney Bowes chairman and CEO Michael Critelli gives us a glimpse of how he leads his company's strategy development--and how that development has supported a counterintuitive return to the company's core after decades of diversification. He and others in the company begin the process by tapping into deeply knowledgeable people and organizations to understand key trends in the business and the rate at which change is occurring. Then, it's a question of the firm reshaping the environment in which it does business, whether through R&D investments or work with regulators and policy makers who influence market forces; this is especially important in emerging markets. Focusing on a core business area enables a company to find adjacent high-margin opportunities and to offer comprehensive solutions to customers. What stands out most sharply in this account, however, is the importance of having a strategist's mind-set. Whether Critelli is reading the day's news, visiting a key account, or spending an hour with his own people working in the context of a customer mail room, he is constantly extrapolating possible long-term competitive implications from the immediate facts. Often inspired by strategic thinkers, Critelli believes that the greatest thing he can do for his organization is to shift the terms of the debate. "Rarely am I credited with sterling words or bold, symbolic actions", he writes. "Instead, I help people to see the business we are in differently and to reach a shared vision as to where we want to end up. And, little by little, things move in the right direction".     

Economic effects of immigrants on native and foreign-born workers: complementarity,substitutability, and other channels of influence

The authors use Standard Metropolitan Statistical Area (SMSA) data constructed from 1980 census microdata files and other sources to estimate a structural model of native/foreign-born labor demand and labor supply which distinguishes the effects upon real wages of each type of labor and on the employment of natives. The authors specify, econometrically estimate, and simulate the structural model which incorporates not only a production structure channel through which immigrants influence area real wages and employment, but also demand and native labor supply channels. It is noted that while these are not the only channels through which immigrants may affect native workers, the model nonetheless constitutes a step in the direction of a general equilibrium approach. In the production structure channel, immigrants and natives are found to be substitutes in production. Immigration lowers foreign-born wage rates and leads to lower wages for natives. The negative effects of the production channel usually are ameliorated through the demand channel. Further, immigrants add to local demand through their earnings and potentially through non-labor income, while also lowering unit costs and local prices which enhances real incomes and potentially net exports, and thus the demands for local output and area labor. The author discusses findings of interest from the simulation results based upon an analysis of all areas.     

Employer-sponsored health plans and experimental medical treatments: life and death cost/benefit decisions

The process of determining whether--and how--to limit coverage for certain expensive, experimental medical treatments is complex and involves social, legal and economic considerations. However, employers do have several options for responsibly containing their health plan costs while meeting their employees' basic health care needs.     

Shaping up the bottom line

Company-sponsored fitness programs help employees stay healthy and decrease employers' medical costs. Several case studies show the results of established programs in different industries.     

Who should set CEO pay? The press? Congress? Shareholders?

Populist fervor in an election year has transformed executive compensation from a business issue into a political one. Critics, led by Graef Crystal, author of In Search of Excess: The Overcompensation of American Executives, charge that CEOs are ripping off shareholders with their outrageous salaries while running U.S. corporations into the ground. Politicians claim overpaid CEOs are the root cause of the U.S. competitiveness problem. Add a recessionary business climate to the fact that some CEOs earn 130 times more than their lowest paid employees, and you have the makings of a populist rebellion. In a bid to appease voters, Congress is considering several bills that would limit the deductibility of "excessive executive salaries," the SEC has opened the issue to shareholder comment, and the Financial Accounting Standards Board is looking at new accounting standards for granting stock options to executives as part of company compensation schemes. Andrew R. Brownstein and Morris J. Panner say it's time to put the debate back where it belongs--in a business context. The real question is not are executives paid too much, but are shareholders getting their money's worth. Most U.S. corporations use stock compensation to link company long-term performance to executive salaries. And because of the staggering market performance of U.S. corporations in the 1980s, an overwhelming majority of CEOs are actually paid in line with their performance. Rather than cut executive pay, Brownstein and Panner suggest that corporations extend incentive-based compensation plans to all employees, thus narrowing the salary gap and establishing pay for performance at every level of the organization.