The Cost of Defensive Medicine

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What is defensive medicine? As in defensive driving, in which you treat every other vehicle as a potential accident, in defensive medicine the physician treats the patient not only as someone who is ill, but as a potential plaintiff. This means that the physician orders not only the lab, X-rays, medications etc., necessary to treat the patient, but also that which would be helpful in a defense against malpractice. For years, physicians have claimed that this practice drives up the cost of medical care. Until now there has been no hard data to support this claim. In a recent article in the scholarly Quarterly Journal of Economics, two economists finally put a number to it. They studied the effect of malpractice law reform on Medicare patients with heart attacks for the years 1984, 1987, and 1990. They measured the effect of malpractice on the outcome to the patient and the cost of medical care. Their findings are startling. Malpractice reforms that reduce physician liability decrease the cost of care from 5 to 9 percent without increasing the death rate or incidence of complications. These findings must be considered conservative.

We know that the Medicare population is less prone to sue, and heart disease generates fewer suits than, say, childbirth. The legal profession has maintained that since the value of malpractice awards is only about 1 percent of health care costs, no appreciable savings would accrue from malpractice reform. Now we can say with authority that we can save at least 10 times that without decreasing the quality of care. Anybody interested?

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