Defensive Medicine Doesn’t Lead To Unnecessary Medical Treatment
One of the complaints about President Obama’s healthcare package is that it doesn’t include enough tort “reform” in it. Many argue that making it harder to sue doctors and making it impossible to recover large noneconomic damage verdicts will decrease the cost of healthcare by reducing defensive medicine. This is flat wrong, and here’s why.
There is no scientific or legal definition of what “defensive medicine” is, so we can’t look there. All we have is the colloquial definition of defensive medicine as when a doctor orders a procedure because he or she is afraid of being sued, not because the treatment is medically necessary. Some argue that if we make it harder for doctors to be sued, defensive medicine will decrease, and the concomitant decrease in unnecessary procedures will lower healthcare costs. One problem with this argument is that there are already checks in the system that prevent doctors from ordering unnecessary procedures. Insurers (including Medicare & Medicaid) have guidelines as to when they will pay for a specific procedure.
For every injury or illness, there are a range of possible treatments. The (very crude) drawing below represents that range. At the left end of the scale is to “do nothing” and see if the injury gets better on its own. At the far right end of the scale is immediate surgery to try and correct the problem. The bracket in the middle represents treatment within the permissible standard of care for a hypothetical injury. For this hypothetical injury, it would be inappropriate to do nothing, and it would also be inappropriate to take the patient to surgery immediately. Medically appropriate treatments might include administering drugs, ordering an inexpensive diagnostic test, and ordering an expensive diagnostic test. Doctor Smith may be conservative with his treatment and decide to order an inexpensive diagnostic test, while Doctor Jones may be aggressive and order the administration of drugs and the expensive diagnostic test. While both doctors treated the same injury in different ways, neither doctor committed malpractice. More importantly, if Doctor Smith is afraid of being sued and orders the expensive test, we cannot say that his fear of being sued led him to order a medically unnecessary test. The worst we can say is that the tort system nudged the doctor towards being more cautious.
Let’s tweak the hypothetical and make it a little more interesting. Assume that Doctor Smith buys the machine that does the expensive diagnostic tests. When he bought the machine, he had to finance it, and has a monthly payment for the machine. Now, when he orders that expensive test, he is paid for doing so. Do you think he is more likely to order the expensive test because he’s afraid of being sued, or because the profit from running the expensive test helps him pay that monthly payment?If we really want to minimize the incentives for doctors to err on the side of caution (does that really sound like a good idea?) then perhaps we should be more concerned about the financial incentives doctors have to err on the side of caution.
The “reform” crowd often argues that lawyers practice law in accordance to what’s best for themselves, and not for their clients. Is it really so hard to believe there are some doctors who practice medicine the same way? And is it really so hard to believe that those same doctors invented the concept of “defensive medicine” so they can blame lawyers for their pursuit of their own self-interest?