Tort reform opponents knock 'defensive medicine' argument

Trial lawyers and consumer advocates are trotting out a novel argument as they fight off tort reform proposals: they say medical malpractice suits, rather than driving over-use of costly tests by risk-averse doctors, instead prevent rationing.

The political stars are aligning in favor of tort reform this Congress, with House Republicans vowing to pass a $250,000 cap on non-economic damages, and the White House setting aside $250 million in the 2012 budget for state experiments. One culprit, in lawyers' view, is the concept of "defensive medicine" that has been uniting Republicans who want to cut doctors' malpractice insurance bills and Democrats worried about wasteful medical spending that's bankrupting federal programs.

This week, the consumer organization Center for Justice and Democracy began to release excerpts from a draft research article that questions the prevalence of defensive medicine. And the consumer advocacy group Public Citizen had scheduled a media briefing, now postponed, on defensive medicine for Tuesday.

"'Defensive medicine' by all scholarly reviews has become a myth, a combination of surveys of interested parties and the 'imagination' that those parties are avoiding — or believe they are avoiding — liability through alteration of their medical practices," writes Fred Hyde, a professor at the Columbia University Mailman School of Public Health, whose study was funded by the Center for Justice and Democracy. "The costs, if any, of defensive medicine, are trivial, in comparison to the medical and social costs of negligence."

The defensive medicine argument took on new prominence during the healthcare reform debate when the Congressional Budget Office estimated that medical malpractice reform proposals could reduce national health spending by about .5 percent. Two-fifths of that was attributed to lower medical liability premiums, and three-fifths to "slightly less utilization of health care systems."

In a Dec. 10, 2009, letter to Sen. Jay Rockefeller (D-W.Va.), CBO wrote that tort reforms would probably have a bigger impact on Medicare than on privately funded healthcare because private insurance plans are more likely to manage care.

"Such plans may limit the use of services that have marginal benefit to patients to a greater degree than does Medicare," CBO wrote, "leaving less room for changes in pressures regarding malpractice to affect utilization."

Hyde's article turns that analysis on its head: He argues that Democrats' healthcare reform law, by shifting away from Medicare reimbursements for each procedure towards payments for episodes of care, risks promoting healthcare rationing if the threat of lawsuits is curtailed.

"Health care reform may change financial incentives toward doing fewer rather than more tests and procedures," Hyde writes. "If that happens, concerns about malpractice liability may act to check potential tendencies to provide too few services."