The Myths of Medical Malpractice “Reform” and Obama’s Health Insurance Plan, Part III–Doctors’ Fear of Lawsuits and Unnecessary Testing

Both sides of the aisle want medical malpractice lawsuit “reform” in order to lower healthcare costs.  Prior posts, Parts I and II, discuss the myths of medical malpractice “reform”.

This post focuses on the debate’s central myth.

Myth IV–Doctors Order Unnecessary Tests in Fear of  Being Sued

See full size imageThe argument goes that doctors order unnecessary tests out of fear of being sued for medical malpractice.  The thinking is that doctors order every test possible so that  treatment will not be second guessed.   In the event that the doctor is sued, the jury will say that the doctor did nothing negligent and did everything possible.   Therefore, the cost of healthcare and insurance rises to pay for all of these unnecessary tests.

I have one answer to this claim:  poppycock!

There is one simple reason why doctors order tests:  it is good medicine.  No doctor will admit to doing unnecessary testing.  No patient going under the knife will say that his pre-surgical tests were wasteful.   

Doctors have an arsenal of tests, such as the MRI, which prior generations did not have.  When there is a suspicion of a problem, it is good medicine to do further examination and testing so as to “rule out” the condition.  The availability of tests are but one of  doctors’ tools.   

In the “good old days” doctors were able to diagnose a lumbar herniated disc without the MRI and EMG.  Indeed, back surgery was done without those tests.  However, today no spinal surgeon would give-up the MRI and EMG.  If you were to ask a spinal surgeon why he does the pre-surgical tests, his response is that it is good and careful medicine.  

This claim is also ridiculous because  health insurance will not pay for unnecessary testing.  Indeed, often the insurance company will require a letter of “medical necessity” from the treating doctor before it approves an expensive test.  For example, the treating doctor has to show need for an MRI so that not only will his bill be paid, but the insurance company will pre-approve the test.

See full size image

However, if a national health plan does pass, it is very possible that the opposite will occur.  There will be much less testing since care will be rationed.  As we have heard from Britain and Canada, there are long waits for MRI’s on so-called elective surgeries, such as spinal surgeries and knee and hip surgeries. 

Mark E. Seitelman, 9/11/09,


5 Responses to The Myths of Medical Malpractice “Reform” and Obama’s Health Insurance Plan, Part III–Doctors’ Fear of Lawsuits and Unnecessary Testing

  1. Mark Baird says:

    I could not agree more. What I see is threat of lawsuits is what scare people, it is really not the probability, most juries are reasonable, most people do not get sued.

    This is the problem that should be corrected, this exaggeration.

    Following is a GAO report on medical malpractice and could not find any evidence to substantiate the claims of lawsuits impacting health care costs, access to health care or defensive medicine (with one possible lose connection relating to OBGYN). But of course you will not see this report on any media outlet swinging left or right.

    Remember the CBO report regarding the cost of a single payer system that we all grasped to support our arguments against a single payer system…

    Well, there is the CBO report which had this to say about tort reform:

    “But even large savings in premiums can have only a small direct impact on health care spending–private or governmental–because malpractice costs account for less than 2 percent of that spending.”

    And of course there is Tillinghast-Towers Perrin (one of the largest in the world that provides risk management for the insurance and reinsurance industry).

    According to the actuarial consulting firm Towers Perrin, medical malpractice tort costs were $30.4 billion in 2007, the last year for which data are available. We have a more than a $2 trillion health care system. That puts litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs. That’s a rounding error. Liability isn’t even the tail on the cost dog. It’s the hair on the end of the tail.

    Of that 1 to 1.5 percent what portion of that is “frivolous”? (Page 10)

    And then of course the report from Towers Perrin that states that the total tort cost in the US is 2% of the GDP. What percentage of that is “frivolous” and of that percentage what percentage is “frivolous” corporate lawsuits. So how much are “frivolous” lawsuits driving up the cost of everything? Maybe less than 2 cents on the dollar or maybe even less the 1 cent on the dollar?

    “I know of no safe repository of the ultimate power of society but people. And if we think them not enlightened enough, the remedy is not to take the power from them, but to inform them by education.” – Thomas Jefferson

    • Thanks, Mr. Baird, for your detailed comments.

      The cost of medical malpractice will be the subject of my next article.

      Getting back to the subject of “fear of lawsuits” and unnecessary testing, the reality is that our medical industry is built on cross-referrals to specialists and sophisticated testing. If you have a nagging pain in your low back, the family doctor might send you to an orthopedist or neurologist. In turn, the specialist might send you for an MRI and EMG.

      Furthermore, the general public wants to see specialists and have testing when there is a problem which is either unsolved or requires surgery.

      In sum, the the “unnecessary testing” argument is another myth.

  2. […] our prior posts here.  See also our prior posts on the medical malpractice and Obamacare at I, II, III, and […]

  3. […] Myth that “Reform” Will Create Savings As we explored in Parts I, II, and III, there are many myths of medical malpractice “reform”  in the health insurance […]

  4. I really liked reading your post! Quallity content.

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