Study: Malpractice Costs $55.6 Billion Annually, Most In Defensive Medicine

An analysis by the journal Health Affairs has found that $55.6 billion, 2.4 percent of all annual health spending, is spent on medical malpractice, reports Modern Healthcare. “The estimate includes defensive-medicine activities, such as ordering tests or treatments … which alone costs an estimated $45.6 billion per year, the study found. … To get more concrete answers, the study’s researchers analyzed different areas of the medical liability system such as payments made to malpractice plaintiffs, defensive medicine and administrative costs, and the costs of lost clinician work time.” The study says that tort reform, such as placing a cap on noneconomic damages, could reduce some costs but are likely to have “little effect on overall healthcare spending … reform proposals such as moving away from fee-for-service reimbursement could have a greater impact” (Lubell, 9/7).

The Hill:  “‘Physician and insurer groups like to collapse all conversations about cost growth in health care to malpractice reform, while their opponents trivialize the role of defensive medicine,’ Amitabh Chandra, a co-author of the study and professor of public policy at Harvard’s Kennedy School of Government, said in a statement. ‘Our study demonstrates that both these simplifications are wrong — the amount of defensive medicine is not trivial, but it’s unlikely to be a source of significant savings'” (Lillis, 9/7).

MedPage Today reports on a second Health Affairs paper that seems to call the defensive-medicine findings into question: “A second paper by J. William Thomas, PhD, of the Cutler Institute for Health and Social Policy at the University of Southern Maine, in Portland, and colleagues, analyzed the costs of defensive medicine across 35 medical specialties and concluded that ‘defensive medicine practices exist and are widespread, but their impact on medical costs is small.’ So small, they wrote, that tort reform changes that would reduce medical malpractice premiums by 10% would only reduce the nation’s total medical costs by 0.120% to 0.134%” (Peck, 9/7).

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