The Costs of “Defensive Medicine”
Monday, April 20th, 2009
As I’ve written several times over past few weeks, there is copious evidence that the costs of malpractice litigation and awards are only a drop in the bucket — less than 3 percent, possibly as little as 1 percent — of the total costs of U.S. healthcare. But what about the costs of “defensive medicine”?
The claim is that doctors order unnecessary tests and treatments because they fear being sued, and the costs associated with these “defensive medicine” practices are a major driver of health care costs. This may be the strongest real argument for “tort reform,” as opposed to most other arguments, which are largely fiction.
The Annenberg Political FactCheck website addressed this issue in 2004. According to Annenberg, a 1996 study by Stanford economists Daniel P. Kessler and Mark McClellan “is one of the few academic studies that has ever attempted to measure the cost of ‘defensive medicine’ attributable to lawsuits.” Kessler and McClellan studied the cost of treating hospitalized heart patients in states with caps on damage awards and other restrictions on malpractice suits to similar patients in states without such restrictions.
Kessler and McClellan concluded that reducing “provider liability pressure” led to savings of “5 to 9 percent in medical expenditures without substantial effects on mortality or medical complications.” You can find these numbers repeated in many other position papers on health care costs, including the Robert Wood Johnson Foundation reported cited in the last post.
However, Annenberg says, other studies have failed to duplicate the Kessler-McClellan findings.
“A 1990 study by the Harvard University School of Public Health “did not find a strong relationship between the threat of litigation and medical costs,” CBO said. And a 1999 study in the Journal of Health Economics found only tiny savings – less than three-tenths of one percent – when studying the cost of Caesarian sections in states with limits on lawsuits, compared to states without limits.”
At different times, Annenberg says, the U.S. Office of Technology Assessment, the Congressional Budget Office, and the General Accounting Office have all said that the Kessler and McClellan study was too narrow to provide a basis for estimating overall costs of defensive medicine. What might be true of heart patients might not be true for other medical circumstances. Extrapolating an overall “defensive medicine” cost from heart patient studies alone simply is not valid.
This is not to say that there is no “defensive medicine” problem, or that there are no costs associated with it. The point is that there is no exact measure of what those costs might be. People who claim a certain amount of dollars will be saved by tort reform either are speculating or using flawed studies.
The issue of tort reform is critical for those suffering from mesothelioma and other asbestos-related diseases. The extravagant claims of “tort reform” proponents must be challenged aggressively.
April 20, 2009
Barbara O’Brien
