Defensive medicine and the cost of malpractice liability
"Defensive medicine" means tests, procedures or referrals ordered mainly to reduce legal risk rather than for clinical benefit. How much it adds to US health spending is debated. Here is what the most-cited research says, from different angles.
Key estimates
About $55.6 billion a year, roughly 2.4% of US health spending
Mello, Chandra, Gawande and Studdert estimated total medical-liability system costs at $55.6 billion in 2008 dollars. That includes about $45.6 billion in defensive medicine and about $5.7 billion in payments to patients.
Mello MM et al., "National Costs Of The Medical Liability System," Health Affairs 29(9), 2010. doi:10.1377/hlthaff.2009.0807
Federal tort-reform package: about 0.5% lower national health spending
The Congressional Budget Office estimated that a package of caps and other limits would lower national health spending by about 0.5%, roughly $11 billion in 2009, and reduce federal deficits by about $54 billion over 2010–2019.
CBO, letter to Sen. Orrin Hatch on proposals to limit medical-malpractice costs, October 9, 2009. cbo.gov/publication/41334
Counterpoints
Most claims involve real injuries, and many involve error
A review of 1,452 closed claims found that 97% involved a physical injury and about 63% involved an injury caused by error. Claims without error made up a small share of total system costs.
Studdert DM et al., "Claims, Errors, and Compensation Payments in Medical Malpractice Litigation," NEJM 354:2024–33, 2006. doi:10.1056/NEJMsa054479
Few negligent injuries lead to a claim
The Harvard Medical Practice Study found that only about 2% of negligent adverse events in New York hospitals led to a malpractice claim.
Localio AR et al., NEJM 325:245–51, 1991. doi:10.1056/NEJM199107253250405
Texas caps and spending
After Texas capped non-economic damages in 2003, researchers found no evidence that Medicare spending in Texas fell relative to other states.
Paik M, Black B, Hyman D, Silver C, "Will Tort Reform Bend the Cost Curve? Evidence from Texas," Journal of Empirical Legal Studies 9(2), 2012. doi:10.1111/j.1740-1461.2012.01253.x
Patient-safety context
The Institute of Medicine estimated that 44,000–98,000 hospital deaths a year in the US resulted from preventable medical errors.
IOM, To Err Is Human, 1999 (published 2000). nap.nationalacademies.org/catalog/9728
Questions worth asking
- If liability costs are about 2–3% of spending, what explains the rest of the gap between hospital charges and Medicare rates? (See hospital markups.)
- Can reforms such as health courts, communication-and-resolution programs or safe-harbor guidelines cut defensive medicine and still compensate injured patients?
- How do campaign contributions from both trial-lawyer and physician groups relate to how legislators vote? (See the legislator map.)