Health care market has often been regulated by government legislation. A California law passed in 1999 regulating minimum nurse to patient ratios in hospital units is one of them. This legislation was prompted by results from previous research showing higher adverse patient outcomes when hospital nurse/patient ratios are low. In the second chapter of my dissertation, I use a census of hospital discharges in California during 1996-2000 to estimate the impact of hospital staff levels on adverse events by examining whether outcomes are correlated with the number of admissions in the hospital over the next two days. I find quantitatively small and statistically insignificant effects of Friday and Saturday admission shocks on mortality rates of patients admitted on Thursdays. These results suggest that the portion of the California law designed to guarantee adequate staffing when the patient census increases unexpectedly should have little impact on patient outcomes. Another regulation which has been proposed by the government is federal tort reform. One frequent justification for tort reform proposals is the potential impact of liability on defensive medicine. There is however, scant and conflicting evidence on whether malpractice risk alters physician practices. In the third chapter of my dissertation, I examine whether malpractice risk alters the procedure choices of obstetricians, who face one of the highest rates of malpractice lawsuits and pay much larger malpractice premiums than most other specialties. By focusing on obstetricians, I can observe the impact of malpractice risk on the use of procedures such as cesarean sections, vaginal births after cesareans, prenatal care visits, the use of diagnostic tests such as ultrasound and amniocentesis, and the use of various equipment and techniques during the delivery such as fetal monitoring, forceps and vacuum extraction. Because the measured malpractice risk may signal something unobserved about physician quality or practice style, I use malpractice claims against non-OB/GYNs as an instrument for OB/GYN claims. I find that cesarean section rates and most other measures of physician behavior are not sensitive to medical malpractice risk.