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Study Questions Potential Healthcare Savings Gained by Tort Reform

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Although many proponents of tort reform believe that fear of malpractice lawsuits prompts physicians to order unnecessary tests and indirectly drives up medical costs, a Rand Corporation study recently published in the New England Journal of Medicine found otherwise.

The study analyzed the experience of emergency room doctors in Georgia, South Carolina, and Texas after the states raised the burden of proof for malpractice lawsuits to gross negligence for emergency care, basically requiring that doctors knowingly provide improper care to a patient to be found liable.

Rand researchers analyzed more than three million Medicare claims for three metrics – how often ER physicians ordered advanced imaging studies, the rate of inpatient admissions following ER visits, and total charges for an ER visit, and compared the data to that of neighboring states with lower bars for malpractice lawsuits. The researchers found that only Georgia exhibited a small drop in charges per patient, and nothing else really changed, according to a Washington Post report.

Defensive Medicine

According to the Congressional Office of Technology Assessment (OTA), defensive medicine “occurs when doctors order tests, procedures, or visits, or avoid high-risk patients or procedures, primarily (but not necessarily or solely) to reduce their exposure to malpractice liability.”

Actions may be considered defensive medicine even if performed for legitimate reasons, such as a belief in a procedure’s effectiveness, a desire to reduce medical uncertainty, or a financial incentive, as long as the primary motive is to avoid malpractice risk. The motive need not be conscious, and some medical practices become so routine that physicians are oblivious to the fact that liability concerns originally motivated their use.

A September 2014 study directed by Michael B. Rothberg of the Cleveland Clinic and published in the Journal of the American Medical Association was conducted to measure just how much defensive medicine there is and how much it really costs. The study concluded that defensive medicine accounts for approximately 2.9% of total healthcare spending, or $78 billion of the estimated $2.7 trillion U.S. healthcare costs, mostly due to additional days of hospitalization.

The findings suggest that doctors are “less motivated by legal risk than they themselves believe,” and creates doubt about the perceived amount of savings that could actually be realized through medical malpractice reform, according to the JAMA study.