Defensive medicine less costly than anticipated

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For the past several years, policymakers have linked physicians' fear of malpractice suits to the rise in defensive medicine, and assumed these forces were contributing to rising healthcare costs.

All kinds of numbers have been bandied about. Rep. Tom Price (R-Ga.), who is a physician, recently said on a House Republican website--America Speaking Out--that the cost of extra tests and procedures doctors perform to avoid getting sued, or to protect themselves if they do end up in court, is $650 billion a year. That represents 26 percent of all money spent on healthcare, NPR reports.

A PriceWaterhouseCoopers guesstimate put the tab for defensive medicine at $210 billion.

A recent article in Health Affairs pegs the cost of malpractice, including defensive medicine, at a much lower $56 billion a year, or 2.4 percent of annual healthcare spending.

While defensive medicine, or physicians' practice of ordering tests and procedures to limit potential patient lawsuits, is typically assumed to raise healthcare costs, the authors of the article argue that the practice does not. The impact of widespread defensive medicine practices on medical care costs is small, the authors write. While the amount of defensive medicine is not trivial, it's unlikely to be a source of significant savings, Amitabh Chandra, one of the study co-authors and professor of public policy at Harvard's Kennedy School of Government, said in a statement.

By extension, national tort reform, and a resulting decline in malpractice insurance premiums, would have little impact on costs in terms of reductions in defensive medicine, according to J. William Thomas, visiting professor at the Muskie School of Public Service at the University of Southern Maine, and his co-authors in another study in published in Health Affairs. Estimated savings from a 10 percent cut in malpractice premiums would translate into reduction in defensive medicine equal to less than 1 percent of total medical care costs in every specialty, their research found.
 
To learn more:
- read the Health Affairs abstract on the national costs of medical liability
- here’s the Health Affairs abstract on the low costs of defensive medicine
- see the Health Affairs abstract on how tort reforms don’t calm physician fears of malpractice lawsuits
- read the NPR article

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