KHI News Service

Defensive medicine costs billions of dollars annually

But doctors' risks of being sued are less than imagined, study shows

By Mike Shields | September 14, 2010

Defensive medicine costs the nation an estimated $55.6 billion a year, or about 2.4 percent of total health care spending, according to a newly published study in Health Affairs, a leading policy journal.

The term "defensive medicine," refers to treatments or tests ordered by doctors primarily because they are worried they might be sued for malpractice.

Despite the costs resulting from medical providers' fear of lawsuits, there is only "modest potential," for decreasing overall health care costs through reform of tort or malpractice laws, according to the study's authors, Michael Mello, Atul Gawande and Amitabh Chandra.

The researchers said reforming the fee-for-service reimbursement system would, "probably provide greater opportunities for savings."

The September issue of "Health Affairs" included several articles focusing on malpractice and defensive medicine.

Dread factor

A companion report titled, "Physicians' Fears of Malpractice Lawsuits Are Not Assuaged by Tort Reforms," showed that doctors consistently overestimate the risk of being sued regardless whether they live in states that have capped or otherwise limited malpractice awards.

That study was based on a national survey of doctors which, among other things, found that 78 percent of respondents agreed or strongly agreed that it is becoming, "increasingly risky to rely on clinical judgement rather than diagnostic testing," when treating patients.

The authors concluded that, "individual physicians' concerns about their own malpractice risk are pervasive," and that those concerns, "appear to be relatively insensitive to their states' malpractice reforms, including caps on non-economic and punitive damages."

They said the survey results indicated an emotional, "dread factor," was at work among doctors.

"Surveys of the public demonstrate much higher levels of fear of dying in an airplane crash than in a car accident, even though the latter fate is far more likely," the authors wrote. "Severe, unpredictable, uncontrollable events are associated with a feeling of dread that triggers a statistically irrational level of risk aversion.

"Physicians may be subject to this phenomenon when it comes to malpractice suits. Because of the rarity of suits, most physicians have little familiarity with them. The consequences of being sued are perceived as potentially disastrous to one’s medical reputation, psychological well-being, and financial stability. Finally, physicians tend to view lawsuits as random events, unpredictable and uncontrollable, because they are not viewed as related to the quality of care provided. These factors may lead to a fear of suits that seems out of proportion to the actual risk of being sued."

Major case pending

Kansas is among the states that caps the amount of non-economic damages a patient can be awarded by a jury in a malpractice case. The cap, enacted in 1988, limits awards for pain and suffering to $250,000.

But that law has been challenged in the case of Miller v. Johnson and is now before the Kansas Supreme Court.

The court has had the case for 16 months, but has not yet released a decision.

The wait has Kansas doctors in suspense, according to Jerry Slaughter, executive director of the Kansas Medical Society. If the cap is found unconstitutional, that could eventually lead to more claims and more expensive malpractice insurance premiums.

Slaughter said any estimate of the costs of defensive medicine would be an educated guess, a point conceded by the authors of the Health Affairs articles, but he said there is no doubt the costs are real, exacting a toll in dollars and strains on doctors and patients.

"I think everyone in health care, the clinicians and the administrators, will tell you that it's real, that the pressures of defensive medicine do contribute to overall health care costs," he said. "Whatever the number, there's no question it adds significantly to the cost of health care in addition to placing a dynamic between patients and physicians that just complicates that relationship. It's not just financial consequences."

But while academics and politicians can argue the costs of defensive medicine based on abstractions and generalizations, doctors often must make quick decisions that can mean life or death of a patient. Fear of a lawsuit, no matter how unlikely, often becomes a factor in the decision making.

Slaughter offered this scenario as an example:

"Your kid takes a fall on the playground. You take him to the emergency room and the physician could say I don't think there's any damage there, though he got a pretty good knock on the head, then not run a CT image. Then child dies or ends up with a serious problem. No physician wants to stand in front of a jury and say that to save the system 500 bucks I didn't run this test because I didn't think it was necessary.

"Most juries would say: 'Sorry doctor, your job is not to reduce the health care costs for America," Slaughter said. "It's your job to take care of the patient. There are lots of anecdotal examples around of things like that. You can see why physicians feel this pressure to make sure they've done everything they possibly could."

Bowels of the court

Slaughter said the medical society is expecting the court to overturn the law. Most of the justices were appointed by former Gov. Kathleen Sebelius, a Democrat. Earlier in her career, she was a lobbyist for the trial lawyers' association, leading the fight against award caps. None of the judges were on the high bench the last time the court reviewed the law and found it acceptable.

Also, the case had been in the Court of Appeals before the justices reached down in April 2009 and pulled it up for their review, which suggested they want a hand in seeing the law modified.

The medical society has promised to push for a constitutional amendment, if the court rules that the current law is unconstitutional.

It's not known when the court will rule.

Slaughter said he suspected it would be after the November elections.

The case, "is in the bowels of the court," said Ron Keefover, a spokesmen for the justices. "They could be getting additional research. They could be awaiting a U.S. Supreme Court decision. They never divulge what their deliberations are."

Keefover said the fact the judges haven't rendered a decision after 16 months was not unusual, "given the complexity of the case. I've seen them (cases) held a year or longer."