Survey: Defensive Medicine Costs Up to a Third of Total Healthcare Spending

July 28, 2010
Terri Cullen

A new physician survey puts the cost of defensive medicine at between a quarter to a third of total U.S. healthcare spending each year, a sharply higher amount than previous estimated.

Not only are the vast majority of physicians practicing “defensive medicine” to avoid malpractice lawsuits, but a new survey of physicians shows these medically unnecessary tests and treatments cost hundreds of billions of dollars -- a far greater slice of U.S. healthcare spending than previously estimated.

A recent survey published in the Archives of Internal Medicine found that 91 percent of doctors surveyed said they believed that physicians “order more lab tests and procedures than patients need in order to protect themselves from malpractice suits.” The same percentage of doctors agreed that “protections against unwarranted malpractice lawsuits are needed to decrease the unnecessary use of diagnostic tests.” (The study surveyed 1,231 doctors, including general practitioners, surgeons, specialists, and emergency department doctors.)

The study’s authors -- Tara F. Bishop, MD; Alex D. Federman, MD, MPH; Salomeh Keyhani, MD, MPH -- estimated that as much as $60 billion is being spent on defensive medicine due to worries about malpractice suits.

But according to A Costly Defense, a new, free eBook published by Jackson Healthcare, a healthcare staffing and recruiting firm, the economic and non-economic impacts of defensive medicine may be significantly greater than previously estimated.

For example, physicians surveyed by Jackson between October 2009 and May 2010 estimated that the cost of medically unnecessary tests and treatments make up between a quarter and a third of annual total U.S. healthcare costs. At an estimated $2.5 trillion in annual healthcare spending, this would mean between $650 billion to $850 billion is spent each year on medically unnecessary care, according to the publication.

Harvard University economist Amitabh Chandra has been widely quoted as estimating the annual cost of defensive medicine at just $60 billion, or 3 percent, of overall healthcare spending. Other estimates put the cost at up to $200 billion.

“As we began to dig into understanding physician attitudes on defensive medicine, it became obvious to us that this was a major issue not being addressed by healthcare reform initiatives,” said Richard Jackson, chairman and chief executive of Jackson Healthcare. “Defensive medicine has far-reaching impacts beyond costs.”

In addition to driving up the costs of healthcare, physicians reported that defensive medicine limits access to certain patients, drives over- and under-treatment, delays adoption of medical innovations and negatively impacts the supply and satisfaction of physicians.

According to Jackson, “The traditional approach to defensive medicine has been tort reform in the form of damage caps. That is not a sustainable solution, and it only addresses the tip of a very large iceberg of costs.”