Defensive medicine costs less money than physicians think

Nothing polarizes the heath care debate more than defensive medicine. A recent study from Health Affairs will only add more fuel to the fire.

Here’s what I wrote a couple of years ago in USA Today: “When you consider that rampant testing is a major driver of escalating health care dollars, addressing defensive medicine should be a primary goal of cost containment.”

Is that still true?

Well, yes and no.

MedPage Today summarizes the findings:

Costs associated with medical malpractice added about $55.6 billion to the nation’s total health care costs in 2008 — roughly 2.4% of a more than $2.3-trillion tab — and most of that money went to pay for tests, procedures, and treatments associated with defensive medicine, according to an analysis by Harvard researchers …

… A second paper by J. William Thomas, PhD, of the Cutler Institute for Health and Social Policy at the University of Southern Maine, in Portland, and colleagues, analyzed the costs of defensive medicine across 35 medical specialties and concluded that “defensive medicine practices exist and are widespread, but their impact on medical costs is small.”

In other words, both the doctors and lawyers are right. Defensive medicine is rampant, per the doctors, but its cumulative cost effect is much smaller than most physicians think, per the lawyers.  (Although I’d argue that adding $55.6 billion to the nation’s annual health care costs should not be so easily dismissed.)

So, what’s next?

Politically, malpractice caps are dead — tort reformers should abandon that option. Furthermore, arguing that tort reform will save significant sums of money is growing less viable.

It’s more important to re-frame the malpractice debate to focus on patients. That’s where the malpractice reform crowd will have more solid evidence to stand on.

Again, in a previous USA Today op-ed:

… nearly one in six cases involving patients injured from medical errors received no payment. For patients who did receive compensation, they waited an average of five years before their case was decided, with one-third of claims requiring six years or more to resolve. These are long waits for patients and their families, who are forced to endure the uncertainty of whether they will be compensated or not.

And with 54 cents of every dollar injured patients receive used to pay legal and administrative fees, the overhead costs clearly do not justify this level of inefficiency.

Those who want to reform the malpractice system — namely, the majority of physicians — would be much more persuasive if they focused on how the current system is wholly inadequate in treating injured patients.  That’s something that conservative-leaning tort reformers and progressive heath reformers can agree on.

And it’s the only way that plausible solutions, like health courts or no-fault malpractice, can move forward.

 is an internal medicine physician and on the Board of Contributors at USA Today.  He is founder and editor of KevinMD.com, also on FacebookTwitterGoogle+, and LinkedIn.

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  • Donald Green MD

    There are also certain other realities not touched upon Kevin. First not all awards are unwarranted and therefore its true cost is below 2%. Further the testing is income to labs and hospitals and if removed other sources of income will have to replace it. Anytime someone says cost containment it means someone gets less payment or loses their position altogether. This must also be in the mix of things.

    Many malpractice suits results from miscommunication and problems with access. Lack of human to human contact, the doctor-patient relationship is what may need shoring up, not just the patient side. It is this core cottage industry tradition that has maintained trust between doctor and patient. It has taken a beating lately and worsening. This may be the where the pay dirt lies.

  • bev M.D.

    Excellent point; one always gains more traction when not seen to be acting in selfish interests. And it is true that most malpractice cases are won by physicians, even those in which malpractice has occurred. Perhaps it is time for some automatic compensation system to cut the legal system (and its delays and fees) out.

    I do wonder about the methods used to calculate the costs of defensive medicine. I simply do not believe the costs are so low, especially for imaging.

  • http://www.conisus.com Richard Leff

    When did 2.4% become a small amount? If we could cut this in half and save 1.2% of health care costs per year, it would be huge. To put it in perspective, $55 billion per year would approximately cover the cost of all cancer drug therapy based on 2009 estimates. Solving the defensive medicine problem won’t fix our health care system, but as they say, “A billion here, a billion there, and pretty soon you’re talking real money.” Although we need to protect the rights of the injured, we have to find a way that eliminates the pain and humiliation of the tort system which drives such a high rate of defensive behavior by physicians.

  • Matt

    Kevin offers two solutions, “health courts” and “no-fault”. The problem is both are non-starters.

    Health courts are non starters thanks to the US Constitution. Another rub is that in every serious (legislation ready) proposal, there are caps in them. They’re just dressed up in a fancier suit. The really big rub is the cost – there’s no evidence health courts will be any cheaper on administrative costs. After all, someone has to pay these “experts” who will sit on the court, and both parties will still want their own experts to review them.

    The second proposal, no-fault, would almost certainly cost the real party interested in tort reform, the insurers, more money. Despite what physicians think, there are significant barriers to starting a malpractice claim, most notably the cost of proving causation. This knocks out a bunch of claims that might well be malpractice, but the cost doesn’t justify the case. Remove the barrier of causation via no-fault, and they will be swamped with claims. Even if one takes all the criticisms of the methodology of the studies at face value, it’s pretty clear that most malpractice never sees a claim file, much less a courthouse. The insurers have no interest in making the claims process easier or faster. It’s simply not in their interest.

    Kevin says “conservative leaning tort reformers” can agree we need to help the patient more. Putting aside that their is nothing “conservative” about removing access to a jury trial, the real money behind “tort reform” doesn’t truly want to help the injured patient. The real money wants to limit its liability. Those two goals don’t often intersect.

    So while his sentiment sounds noble, and probably is, in practice it’s going nowhere.

    • Vox Rusticus

      Matt:

      Why do you say health courts are a non-starter when they exist in a limited way already? The special master system for vaccine litigation has been around for decades. Why no constitutional problem there?

  • Dr Lemmon

    I am shocked. Harmed patients collecting less than 50% of the awarded sum. Why is such inefficiency tolerated. This would seem to be a very inefficient legal system we have here is the US. Perhaps a cap on the percentage collected by the lawyers would help. Perhaps paralegals could handle some of the cases thus reducing costs. Perhaps arbitration would work. It could be settled faster for a smaller award and the patient would still come out ahead. Surely someone could come up with a better way.

  • drrjv

    Malpractice concerns allow doctors to be lazy and hospitals to make lots of money, especially in the ER setting. Health care practitioners can justify ordering a bunch of tests in the name of defensive medicine and not adequately evaluate the patient, smugly feeling that the various tests have protected them from the lawyers.

    Don’t expect anything to change until incentives change.

  • Matt

    You guys are misreading some of those numbers. For example:

    “When did 2.4% become a small amount? If we could cut this in half and save 1.2% of health care costs per year, it would be huge.”

    You assume that if you cut these tests there are magically savings. We don’t know that. Maybe these tests caught something that would cost far more to treat if not caught then, for example. What’s more, we don’t know that any “reform” will reduce the amount of testing. We’ve been told before that it will yet it has never panned out.

    “Harmed patients collecting less than 50% of the awarded sum. Why is such inefficiency tolerated.”

    Well, some of that money went to pay past medical bills or reimburse health insurers who paid them. A significant portion went to pay their attorneys and the expenses of trying it – those costs have to be paid by someone.

    You’re right the costs can be reduced if the cases go faster. But I don’t know of any insurers in the business of paying more people faster – do you? Surely a physician who waits on health insurers to pay (and sometimes has to sue them to get payment) can understand that.

  • George Hossfeld MD

    2 recent surveys of physicians (by Massachusettes and Illinois State Medical Societies) say otherwise. 18-28% of all labs, X rays, CT scans, MRIs, and ultrasounds are needlessly ordered, say Massachusettes physicians. In Illinois, one of the worse malpractice environment states, 83% of physicians say they routinely order tests, consults and admissions that are done primarily for legal, not medical reasons. In the small state of Massachusettes, estimates were $1.4 BILLION ! Nationally, that translates into more than enough to cover the entire population and still save lots of money. Sadly, most Illinois physicians say they now view every patient as a potential plaintiff. So much for the sanctity of the physician-patient bond… Rather than PhD academicians with little touch of reality who write about medical policy but have never treated so much as a sore throat, these surveys are done of actual practicing clinicians. Who do you think might know better?

  • Matt

    ” Who do you think might know better?”

    90% of teenagers think their curfew is too early. What does that tell us? Not much. Surveys aren’t very useful unless you’re getting ready to elect someone.

    • Primary Care Internist

      And 95% of lawyers are against limits on contingency fees. go figure.

      • Matt

        I would think anyone who isn’t independently wealthy or invincible would be. If a car runs you down today and you can’t work for a year, and have mountains of medical bills, how are you going to pay a good lawyer his hourly rate plus the costs of all the experts and such?

  • http://thehappyhospitalist.blogspot.com The Happy Hospitalist

    Let’s just bundle malpractice lawyer fees for med mal cases into DRGs and cap fees like the government does for hospitals.

    Cut off the wrong leg? The most the lawyer can get is a couple grand. Missed a heart attack? Perhaps $4 Gs.

    That sounds about right.

    • Matt

      If that results in attorney’s reaching the average pay of physicians, you’d probably get a lot of takers.

      Despite the freedom to bill how we want, on average we make 50% less – and 150% less than surgeons.

      If you guys want to come back to the free market, by all means I support you. But don’t be surprised if not all of you do as well financially as you’re used to.

  • Roy S

    MATT_ show me one good lawyer…..

  • mark

    The 2.4% number arrived at I think is still very very low. I think a lot of “futile” medicine in the ICU, NICU’s, late stage CA chemo, etcetera falls into the “defensive” medicine category. The push comes from a defensive standpoint and from families that have unrealiztic expectations and are shielded financially by third payers.