How Much Does Fear of Malpractice Lawsuits Drive Health Care Costs?
Health Care

How Much Does Fear of Malpractice Lawsuits Drive Health Care Costs?

iStockphoto/The Fiscal Times

Doctors often complain about the costly effects of the U.S. medical malpractice system, saying that it drives them to practice “defensive medicine” — ordering extraneous tests or other services due to fear that they might otherwise face lawsuits.

In 2010, Congressman Tom Price, an orthopedic surgeon who would go on to become President Trump’s first Secretary of Health and Human Services, suggested that defensive medicine was costing the country as much as 26 percent of every dollar spent on health care. That outsized estimate wasn’t taken seriously, but the question of just how much defensive medicine drives costs has been the subject of debate among people concerned with wringing excess spending out of the health care system.

Now, a new National Bureau of Economic Research working paper by Duke University law professor Michael Frakes and MIT health care economist Jonathan Gruber puts a number on it, finding that fear of lawsuits increases the intensity, and cost, of inpatient hospital care by 5 percent, without benefiting patient health.

The researchers reached their conclusion by finding a control group who could not sure for malpractice: active-duty military members treated in the military health care system.

Read more about the study at The New York Times.