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Tort Reform Will Not End Defensive Medicine

It’s ever so satisfying to be proven right. Well, maybe “proven” is too strong a word to use, but there is a bit of strong evidence that, as I have said in the past, the practice of defensive medicine is driven by powerful multifactorial incentives and is very unlikely to change even if the most often-asserted motivator, liability, is controlled. Today, Aaron Carroll guest blogs at Ezra Klein’s WaPo digs:

The argument goes that doctors, afraid of being sued, order lots of extra tests and procedures to protect themselves. This is known as defensive medicine. Tort reform assumes that if we put a cap on the damages plaintiffs can win, then filing cases will be less attractive, fewer claims will be made, insurance companies will save money, malpractice premiums will come down, doctors will feel safer and will practice less defensive medicine, and health-care spending will go way down.[...]

Health Affairs in December, estimated that medical liability system costs were about $55.6 billion in 2008 dollars, or about 2.4 percent of all U.S. health-care spending. Some of that was indemnity payments, and some of it was the cost of components like lawyers, judges, etc.; most of this, however, or about $47 billion, was defensive medicine. So yes, that is real money, and it theoretically could be reduced.

The question is, will tort reform do that?

That’s actually an answerable question. You could look at areas where tort reform has already happened and see how things have changed. For instance, we could look at Texas, where non-economic damages on malpractice lawsuits were capped at $250,000 about eight years ago. [...]
So what happened to costs of care after that law was put in place? Citizen Watch analyzed just that (pdf) using data from the Dartmouth Atlas of Health Care.

[Graph omitted] Texas is blue, the nation is red, and the law went into place at the dotted line. If anything, Texas’s Medicare spending seems to have gone up faster than the nation’s since 2003. Hardly a persuasive argument for tort reform = cost control.

You’ll have to click to the piece for the graph, but it’s as described. Now I can admit that there are confounding factors and alternative explanations for this finding. Maybe it just takes more than 8 years for doctors to adapt to a new liability climate. Maybe doctors didn’t really trust the new liability protections and so continued their old ways. Maybe the national culture of defensive medicine is strong enough than a single state can’t exert change. Maybe health care costs went up faster in TX for unrelated reasons unique to that state. All are possible.

However, my interpretation is that the fear of being sued is just one and not even the strongest driver of defensive medicine. As I have said before, there are many powerful reasons doctors practice in this fashion:

  • When we take risks, patients sometimes die. Doctors don’t like that.
  • When bad outcomes happen, peer review can be very harsh in retrospect. Not only is this humiliating, it is as career-threatening as a malpractice lawsuit.
  • While you get sued only in a small fraction of bad outcomes, almost all unexpected bad outcomes are scrutinized in peer review/QI fora, making these very powerful disincentives for physicians to take risks.
  • We are educated to practice in a cautious fashion, and the experts in the fields commonly assert very conservative “standards of care.” Cowboys and gunslingers are viewed very unfavorably.
  • Old habits die hard, and doctors are as conformist as any other profession, perhaps more. When the bulk of providers still proactive defensively, there’s a real risk for an individual doctor to adopt a more permissive standard of care.

None of this is to imply that I am not in favor of tort reform. My reason, however, is not a belief that tort reform will end defensive medicine or save the health care system money. My reason is that the current system functions poorly and too slowly, injured patients frequently receive nothing, and meritless cases can impose huge financial and emotional costs on physicians. It’s inefficient and horribly unfair. But when we look at the $2 trillion the nation spends on health care every year, tort reform should not be looked at as a potential game changer.

*This blog post was originally published at Movin' Meat*


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