This research examines the impact of varying levels of medical malpractice litigation on area medical costs and physician supply. Utilizing two separate units of analysis and alternative regression equations, the results indicate that the level of malpractice litigation is positively related to local per capita medical expenditures and negatively related to the number of area physicians. The differences are presumed to be attributed to "defensive practices" by physicians based on varying degrees of perceived risk along with higher malpractice insurance premiums. The results suggest that the...