Malpractice Liability Costs And The Practice Of Medicine In The Medicare Program

Abstract

This analysis suggests that an important association exists between malpractice costs and the use of imaging services in particular.by Katherine Baicker, Elliott S. Fisher, and Amitabh Chandra ABSTRACT: Mounting malpractice liability costs might affect physician practice patterns in many ways, such as increasing the use of diagnostic procedures while reducing major surgeries. This paper quantifies the association between malpractice liability costs and the use of physician services in Medicare. We find that higher malpractice awards and premiums are associated with higher Medicare spending, especially for imaging services that are often believed to be driven by physicians' fears of malpractice. e c e n t i n c r e a s e s i n p h ys i c i an m a lp r ac t i c e p r e m i u m s and rapid growth in the number and size of awards to plaintiffs have raised widespread concerns about the medical malpractice liability system. 1 Although some argue that the current system plays an important role in maintaining the quality of care, others point out that it fails to compensate most patients who suffer avoidable injuries and punishes many physicians for adverse events that were not caused by negligence.2 Perhaps even greater concerns have been raised about how rising malpractice premiums and payments affect the way that medicine is practiced.3 We focus on state-level variation in malpractice costs and health care use and spending patterns in the Medicare population from 1993 to 2001. We hypothesize that the practice of medicine-and the use of physician services in particular-

Low Costs Of Defensive Medicine, Small Savings From Tort Reform

“…This conclusion is similar to those of other recent studies, 18,21,23 and to that of the Congressional Budget Office (CBO). 24 There is a caution that applies to our cost estimate, as well as those of all empirical analyses of defensive medicine, including the CBO study referred to above.…”

“…[18][19][20] Other studies have found weak relationships, or no relationships at all, between either malpractice premiums and health care costs or direct reforms and health care costs. 16,17,21,22 Nearly all of the studies cited above focused on limited sets of clinical conditions or clinical specialties, or both. However, a few recent studies have used data supporting more comprehensive estimates of defensive medicine costs, and these suggest that reforms aimed at limiting damage awards are likely to lead to only modest cost savings.…”

“…However, a few recent studies have used data supporting more comprehensive estimates of defensive medicine costs, and these suggest that reforms aimed at limiting damage awards are likely to lead to only modest cost savings. [20][21][22][23] Based on these more recent studies, the Congressional Budget Office now estimates that decreased use of health care services associated with specific tort reforms could reduce national medical spending by 0.3 percent. 24 A more detailed review of the research cited above is available in the online Technical Appendix.…”

Emergency Physician Perceptions of Medically Unnecessary Advanced Diagnostic Imaging

“…Defensive medicine due to perceived medicolegal liability is widespread 17,45 and has been linked with higher imaging use and health care costs. 16,17,[45][46][47][48] While some have advocated that tort reform should be central to policies aimed at reducing excessive medical spending, 45,49 studies evaluating the effect of actual reform efforts have demonstrated a limited effect on cost reduction and physician behavior. 46,[49][50][51][52][53][54] However, given the high malpractice concern among physicians in our sample and others, 17,45,51 we believe that although tort reform would not be sufficient to eliminate overuse, 54 it may be a necessary initial step.…”

A perspective on the health care expenditures for defensive medicine

“…Claims expenditures of German liability insurance companies have doubled to 120 million euros between 2000 and 2009. A positive correlation between increasing patient compensation and health care expenditures was demonstrated by Baicker et al [1]. US federal states assigning high malpractice liability, registered increasing health care costs by 7% and a per-physician raise in expenditures of 4.2%.…”