A recent study indicates that doctors actually order more tests than necessary if they are afraid of medical malpractice lawsuits. This is commonly called "defensive medicine." Prior to this study there was no way to really measure the effect of the threat of lawsuits. All that existed before was conjecture.
Some tort reform advocates have used claims about the high costs of "defensive medicine" as an argument for their cause. One measure tort reform advocates have successfully attempted in many states has been to limit how much money a person can get if they win a medical malpractice lawsuit.
MALPRACTICE CAPS HELP INSURANCE COMPANIES
in 1975, for example, California passed the Medical Injury Compensation Reform Act (MICRA). Among other things, that law limited the non-economic damages (meaning things like pain and suffering, but not loss of income) to $250,000. That number, by the way, has not been adjusted upwards for inflation since 1975.
That cap makes it easier for insurers to predict expenses of medical malpractice lawsuits. It also, however, has an effect on the people who were hurt by the negligence underlying a lawsuit.
Imagine that the negligence of a doctor caused the death of a person who was retired or too young to have an income. $250,000 would likely be the maximum the family would be able to recover. While no amount of money could ever make up for the loss of a child, that limit seems insulting.
A cap like that should have a very good reason to exist.
LAWSUITS NOT TO BLAME FOR HIGH HEALTH CARE COSTS
This study gives us the first evidence that doctors do, in fact, order unnecessary tests if they are afraid of being sued for malpractice. That's good to know. So, does that mean "defensive medicine" is driving up the costs of U.S. health care? Does it help to justify things like the medical malpractice damages caps mentioned above?
The study discovered that "defensive medicine" costs a medical facility an extra five percent.
According to the author of the study, that is "not enough to explain the large share of what's driving U.S. health care costs." The results of this study illustrate how important it is to base policy on accurate information.
An article on the study can be found here: https://www.nytimes.com/2018/07/23/upshot/malpractice-lawsuits-medical-costs.html