Will Reforming Our Malpractice Systems Lead To a Reduction in Health Care Spending?

Posted on November 24, 2014 by Shapiro Law Group

Proponents of malpractice reform say that changes will reduce the cost of healthcare, but an evidence-based viewpoint shows that this way of thinking is limited in scope and fails to address several key points in the debate about reform.

The basis of the pro-reform argument is the notion of “defensive medicine,” which suggests that doctors, fearful of lawsuits, will go out of their way to prescribe tests and scans of questionable necessity. However, the argument drastically overstates the likelihood of a lawsuit against the doctor. The National Practitioner Data Bank has mapped a steady drop in malpractice payments over the course of the last decade. To assume that doctors will regularly go out of their way to order unnecessary tests for fear of lawsuits fails to account for this trend.


The U.S. spent $45.6 billion on defensive medicine, which may seem like a lot, but that only comprises 2.4 percent of the total $2.4 trillion spent on healthcare in 2008.

Does Medical Malpractice Reform Work?

Texas is a good case study to show the failures of malpractice reform. By capping noneconomic damages in 2003, the state hoped to lower premiums for malpractice insurance as well as the number of claims. In the end, Medicare spending went up, the number of tests given to patients did not change and the number of patients stayed the same.

The reasoning for this is that the potential savings do not always make their way to the doctors, meaning there is little incentive for them to change their procedures. The reason the number of tests did not decrease is also a no-brainer. Defensive medicine is not just practiced to avoid lawsuits. Doctors need to be sure about their diagnoses. A study by JAMA Internal Medicine quantified this argument by allowing doctors to rate themselves on a defensiveness scale, and less than 3 percent of their orders were rated “completely defensive.” Completely defensive orders are the only orders that are likely to see a reduction if incentivized.

When an evidence-based analysis finds that reform is a step backwards, perhaps we should not fix what is not broken.

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Source: http://www.nytimes.com/2014/11/04/upshot/malpractice-reform-wont-do-much-to-reduce-health-spending.html?_r=1&abt=0002&abg=0

Did You Know?: A study done by the Harvard Medical Practice Study Group determined that for every 8 potential medical malpractice claims, only 1 claim was actually filed.


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