I have long argued against the argument that tort reform is a viable means to cost control. One of my main reasons for doing so is that there is very little evidence that passing tort reform results in significant changes in physician practice.
One of the reasons for this is that there are many reasons for ordering tests, procedures, and hospitalizations outside of a fear of litigation. An obvious one, sometimes overlooked, is that there is a financial benefit to many physicians, offices, and hospitals for ordering that stuff as well. It's sometimes easier to say that you're doing so for "defensive" reasons because it gets you off the hook for overusing services and care.
It's for this reason that many blunt assessments of the cost of defensive medicine may be overblown. Lots of docs may say that they're doing something defensively when they are actually doing it for many reasons, even if malpractice litigation fears are legitimately part of the cause.
That's why I was so pleased to see a new study published in the journal JAMA Internal Medicine, "The Cost of Defensive Medicine on 3 Hospital Medicine Services". The authors rounded up 36 physicians who rated more than 4200 orders for 769 patients. Orders included tests, procedures, and hospitalizations. They were all ranked on a 5 point scale from 0 (not at all defensive) to 4 (completely defensive). Costs were analyzed using both cutoffs of 1 (defensive at all) and 4 (completely and only defensive).
The number of orders places was similar between physicians with fewer and more defensive order. The costs per patient were also similar between these two types of doctors ($1679 versus $1700). The mean cost per patient overall was $1695.
Of this, 13%, or $226, was found to be at least partially defensive in nature. But completely defensive orders, or those that had no justification outside of a fear of litigation, comprised only 2.9% of costs. Most of this was due to additional hospital days.
This is an important point. As the researchers note, past studies have found that "27% of computed tomographic scans, 16% of laboratory tests, and 14% of hospital admissions were ordered owing to concerns about liability." But such studies would include any level of defensiveness in the orders at all. We can realistically expect, however, that only completely defensive orders would be eliminated by tort reform. After all, if there are other reasons to order tests above our fears of being sued if we don't, those reasons will still exist even after comprehensive malpractice reform became law.
If we assume that overall health care spending is about $2.7 trillion, then 2.9% of that would be about $78 billion. That's not chump change, mind you, but it's still a very small component of overall health care spending. Given that there's little evidence that tort reform would lead to a significant reduction in this already small percentage of spending, there seems little reason to pursue it as a means to dramatically reduce health care spending in the United States.
None of this should be taken as a message that the malpractice system is not dysfunctional in this country, and could not benefit from significant reform. But evidence seems to indicate that in doing so, a reduction in the numbers of nuisance cases and an increase in the number of legitimate claims might be a more achievable outcome than a significant reduction in spending.