The practice of offering unnecessary and costly medical tests or treatments in order to protect physicians from being sued adds billions to the nation's healthcare costs. Federal health officials, professional medical societies and others have been trying to curb this defensive medicine trend.
But if the high upfront costs motivated by medical liability concerns result in fewer errors and malpractice claims, they may not be so wasteful, suggest the authors of a new BMJ study.
The researchers used hospital admissions data from 24,637 Florida physicians to evaluate the relationship between how much was spent on tests and procedures and the physicians' later risk of a lawsuit.
Greater spending was associated with a reduced risk of the liability claims across seven specialties, according to findings published online Wednesday. “More frequent consultations and increased diagnostic testing could in theory reduce diagnostic errors, which are the leading cause of malpractice claims,” the authors wrote.
The argument seems counterintuitive, given the nationwide spotlight on value- and evidence-based healthcare. Those efforts reward providers for following recommended guidelines and for cutting excess costs.
And in fact, medical liability insurers are in a sluggish market, with direct premium collections down for the second straight year in 2014, according to a Modern Healthcare analysis this fall.
Total premium revenue dropped 1.3% from 2013 to 2014, after taking a 2.5% dip from 2012 to 2013. The last time the industry saw growth in direct premium revenue was in 2006, when it grew by 3%. Just seven of the top 25 liability insurers collected more premium revenue than they did the previous year.
Experts say a favorable climate for risks and claims has resulted in a slight reduction in the frequency of medical malpractice claims for a number of years.
Drs. Daniel Waxman, a scientist at the RAND Corp., and Hemal Kanzaria of UCLA's emergency medicine department posted a joint response to the BMJ study. “The real policy-relevant question is whether physicians use fewer resources when the threat of lawsuit is diminished,” they asked. There is good evidence, they suggest, that the answer appears to be “no.”
For more than three years, medical specialty societies through the Choosing Wisely campaign have published lists for clinicians and patients that detail which tests and treatments may be appropriate for certain conditions of diagnoses. Patients may face unnecessary harm, stress and expense by undergoing procedures they don't need.
In January, health systems Ascension, Trinity Health and others joined insurance giants Aetna and Health Care Service Corp. in forming the Health Care Transformation Task Force. Their goal is to shift 75% of their business to contracts with incentives for quality and lower cost by January 2020.
The BMJ study said higher upfront spending on resources may actually be a “socially beneficial deterrence” if the costs lead to fewer errors and ultimately fewer malpractice claims. The lawsuits cost the nation nearly $56 billion in direct and defensive medicine expenses annually, or about 2.4% of overall healthcare spending, according to estimates from a 2010 study.
The new study includes data from more than 18 million hospital admissions at acute-care hospitals in Florida. Researchers focused on seven specialties: internal medicine; internal medicine subspecialty; family medicine; pediatrics; general surgery; general surgery subspecialty; and obstetrics and gynecology. Specialists who provided the most expensive care between 2000 and 2009 were the least likely to be part of a medical liability allegation between 2001 and 2010.
For example, a general surgeon whose hospitalized patients averaged nearly $52,000 in costs had only a 0.4% chance of a lawsuit, while a general surgeon whose patient costs averaged $25,000 faced a 2.3% risk of lawsuit. Similarly an OB-GYN whose average per-patient hospital costs were $18,000 faced a 0.4% chance of a lawsuit compared to the 1.9% chance for an OB-GYN whose average hospital costs for patients was $8,600.
A comparison of the costs of additional resource use and the value of reduced errors would be needed to determine whether this defensively motivated care was not warranted, noted the researchers from the Harvard Medical School, Stanford School of Medicine, University of Southern California's Center for Health Policy and Economics and the National Bureau of Economic Research.
The authors note several limitations. The link between resource use by physicians and malpractice claims may be confounded by some unmeasured factors. Physicians with higher charges may also treat high-risk patients with more severe illness, for example. Whether or not the higher spending was indeed the result of defensive medicine could also not be determined from the data analyzed.
Critics dispute claims that tort reforms that put caps on damages could save hundreds of millions by reducing doctors' fears of being sued. But again, liability premiums have been flat or declining even in states that have not imposed caps on damages.
On average, rates in 2014 declined by 1.6% for nonsurgical internal medicine physicians, 1.3% for general surgeons and 1.7% for OB-GYNs, according to annual survey data from the Medical Liability Monitor.
