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Unmeasured defensive medicine costs?



A letter in today's Wall Street Journal, responds to an op-ed suggesting that inefficiencies in having multiple doctors treat a single patient adds to health-care costs:

The elephant in the room that Dr. Bach does not mention is the liability physicians face when they do not refer a patient to a "specialist" and something untoward happens. Certainly it is more cost effective for society when care is coordinated more closely by salaried doctors, but when the diabetics' renal functions slowly decline, for example, their physicians better have consulted a nephrologist or there will be trouble. This scenario is played out in triplicate when the patients are more critically ill. To ignore this dynamic is to ensure that your prescription for savings will be ineffective.

Bruce Bodner M.D. F.A.C.S.
Taunton, Mass.

There are, of course, multiple incentives involved in these sorts of referrals (including the fee-for-service model criticized by Bach), so it would be difficult to tease out the marginal effect of excess malpractice liability (and then that effect would need to be offset by any increased health benefits, even if inefficient, from the increased referrals), but it is a reasonable estimate to say that the net cost of defensive-medicine referrals is in the tens of billions of dollars a year—a figure absent from the PRI $865 billion estimate, not to mention less pessimistic estimates of the cost of the tort system.

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.