Low Costs Of Defensive Medicine, Small Savings From Tort Reform

By J. William Thomas, Erika C. Ziller and Deborah A. Thayer
Health Affairs
September 2010

In this paper we present the costs of defensive medicine in thirty-five clinical specialties to determine whether malpractice liability reforms would greatly reduce health care costs. Defensive medicine includes tests and procedures ordered by physicians principally to reduce perceived threats of medical malpractice liability. The practice is commonly assumed to increase health care costs.

Across all specialties, reductions in medical malpractice premiums would lead to statistically significant savings in 2.0 percent of the conditions analyzed, but these are high-volume situations, comprising 35.8 percent of all episodes. However, the magnitude of savings that could be realized is small, accounting for less than 1 percent of medical care costs in every specialty. Across all thirty-five specialties, savings associated with a 10 percent premium reduction in medical malpractice premiums would be just 0.132 percent. Even if medical malpractice premiums were to be reduced as much as 30 percent, defensive medicine costs would decline no more than 0.4 percent.

http://content.healthaffairs.org/cgi/content/full/29/9/1578

Will bringing an end to defensive medicine reduce our national health expenditures? According to this and other studies, yes, but not by much.

Defensive medicine represents those tests and procedures that physicians order for the purpose of reducing the risk of medical malpractice liability. These are not random tests, but they are tests selected to prevent the patient from suffering harm – an essential component of malpractice.

If there were no liability exposure, why would a physician decide against ordering a test that might prevent a harmful outcome for the patient? Do physicians really believe that it is acceptable to gamble with the health of the patient by omitting potentially beneficial tests, yet is is not acceptable to place that same bet if a malpractice suit might ensue? Are these tests really for the benefit of the doctor and not for the benefit of the patient?

How often have you heard a physician confess to ordering a test that the patient didn’t need, but the test was still necessary to prevent a lawsuit? That is a non sequitur. If the physician could be sued for not ordering the test, then the test was absolutely essential.

The point of today’s message is that we keep looking in the wrong places for ways to try to control health care spending. Though we need malpractice reform for other reasons, we can’t look at it as a source of significant health care savings.

The most important first step to begin to control runaway health care costs would be to replace our wasteful, dysfunctional health care financing system with a single payer national health program – an improved Medicare for everyone – a Medicare that provides us with the financial tools with which we could slow the rate of health care spending increases.