“Defensive Medicine” And Sky High Medical Malpractice Insurance Premiums Contribute To Out Of Control US Health Care Costs This is a huge failure for America, the country that perfected cost effectiveness principles

By Paolo von Schirach

April 19, 2013

WASHINGTON – In the crazy stew of the US health care system, a system in which a progressively more unhealthy population supports a medical profession in which doctors have a personal incentive to over prescribe, we also find “defensive medicine” a powerful ingredient whose net effect is to inflate costs even more, without adding any health care value.

Litigious America

We know that America is a very litigious society. However, at times suing for damages may be legitimate. There are companies that make and sell dangerous products. There are crooks who cheat and steal. There are negligent professionals, include doctors, who provide poor services, sometimes causing real damage. And therefore there are, as there should be, avenues to seek restitution or compensation through the legal system. This is fine. Corporations as well as individuals should be held accountable. They should be aware that wrong doing may carry heavy consequences. Negligence or willful misconduct are not permissible.

Malpractice law suits

That said, suing doctors, hospitals and others for medical malpractice has become a sport, so much so that major law firms these days routinely advertise their services on TV ads in which they tell people that, if they used this medication or underwent that treatment and became subsequently ill, they are entitled to financial compensation.

Now, if you were a doctor watching these TV ads what would be your reaction? Most likely, you would get worried, possibly very scared. And what would do you do? Either you stop practicing for fear of getting dragged into court by an unhappy patient or you try to protect yourself through a combination of a solid malpractice insurance policy and lavish use of “defensive medicine”.

Both “remedies” add nothing to the health of most Americans, while they contribute to jack up the overall cost of health care. Malpractice insurance can become very expensive, depending on where a doctor is practicing and his/her specialty. Quite clearly the cost of expensive insurance is passed on to the patients (and/or their insurance) via inflated costs of medical procedures.

Defensive medicine

“Defensive medicine” is a perverse remedy aimed at deflecting malpractice lawsuit. The doctor will prescribe every possible diagnostic test, no matter how expensive or unrelated to the symptoms, in order to build a record that he/she did everything imaginable to properly diagnose the ailment afflicting the patient. This way, should anything go wrong, it would be much harder to sue for malpractice a very diligent doctor who did “absolutely everything” to take good care of his patient.

Highest health care costs in the world

And then you wonder why America has the highest health care costs in the world? At least 1/3 higher than the average among rich countries? Yes, health care in America absorbs about 17% of GDP, while the average among developed nations is 9 to 10%. How so? Because here we have organized chaos in which waste piles up on waste. Doctors routinely over prescribe, this way jacking up overall costs. Hungry lawyers exploit unhappy patients to sue doctors. Insurance companies offer (expensive) malpractice packages to protect the doctors from the lawyers. The doctors charge these additional costs of doing business to the patients, and therefore to their insurance companies that will raise premiums to all. In all this doctors over-prescribe even more, in part to make more money, so that they can pay for their malpractice insurance, and in part to shield themselves against malpractice suits.

In this circus, US health statistics, especially if looked at in the light of these truly astronomic costs, are at best mediocre, and really bad in some categories. In other words all this extravagant health care related spending does not make the average American very healthy, especially if compared with citizens of other rich countries that in the aggregate spend much less.

And we thought that America had invented and perfected sound principles of cost effectiveness that would guide the organization of all economic activities. Well, certainly not medicine.

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