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Defensive Medicine and Medical Malpractice July 1994 OTA-H-602 NTIS order #PB94-193257 GPO stock #052-003-01377-1 Recommended Citation: U.S. Congress, Office of Technology Assessment, Defensive Medicine and Medical Malpractice, OTA-H--6O2 (Washington, DC: U.S. Government Printing Office, July 1994). Foreword he medical malpractice system has frequently been cited as a contributor to increasing health care costs and has been targeted in many health care reform proposals as a potential source of T savings. The medical malpractice system can add to the costs of health care directly through increases in malpractice insurance pre- miums, which may be passed on to consumers and third–party payers in the form of higher fees. However, total direct costs of the medical mal- practice system represent less than 1 percent of overall health care costs in the United States. The medical malpractice system may also increase costs indirectly by encouraging physicians to practice defensive medicine. In this assess- ment, the Office of Technology Assessment first examines the nature of defensive medicine, adopting a working definition of defensive medi- cine that embraces the complexity of the problem from both the physi- cian and broader public policy perspectives. It then presents and critical- ly examines existing as well as new evidence on the extent of defensive medicine. Finally, it comments on the potential impact of a variety of medical malpractice reforms on the practice of defensive medicine. This assessment was prepared in response to a request by the House Committee on Ways and Means and the Senate Committee on Labor and Human Resources. The report was prepared by OTA staff, but OTA gratefully acknowledges the contributions of the assessment advisory panel, numerous researchers who did work under contract to OTA, and many other individuals who provided valuable information and re- viewed preliminary drafts. As with all OTA documents, the final respon- sibility for the content of the assessment rests with OTA. Director Advisory Panel R. Randall Bovbjerg Richard Frank Barry Manuel Panel Chair Professor Associate Dean Senior Research Associate Department of Health Policy and Boston University College of The Urban Institute Management Medicine Washington, DC School of Hygiene and Public Boston, MA Health John Ball The Johns Hopkins University J. Douglas Peters Executive Vice President Baltimore, MD Charfoos and Christensen American College of Physicians Attorneys at Law Philadelphia, PA Pamela Gilbert Detroit, MI D irector James Blumstein Public Citizen Congress Watch Richmond Prescott Professor of Law Washington, DC Former Associate Executive Vanderbilt University Law School Director Nashville, TN Rodney Hayward The Permanante Medical Group, Assistant Professor Inc. Troyen Brennan Department of Internal Medicine San Francisco, CA Associate Professor University of Michigan School of Department of Medicine Medicine David Sundwall Harvard Medical School Ann Arbor, MI Vice president and Medical Director Boston, MA American Healthcare Systems Richard Kravitz Institute Brad Cohn Assistant Professor of Medicine Washington, DC President University of California, Davis Physician Insurers Association of Sacramento, CA Laurence Tancredi America Private Consultant San Francisco, CA George Malkasian Ncw York, NY Department of Obstetrics and Edward David Gynecology James Todd Chairman Mayo Clinic Executive Vice President Maine Board of Registration in Rochester, MN American Medical Association Medicine Chicago, IL Bangor, ME Note: OTA appreciatess and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panel members. The panel does not. however-, necessarily disapprove, or endorse this report. OTA assumes fu!l responsibility for the rcport and the accuracy of its contents. iv Preject Staff Clyde J. Behney PROJECT STAFF ADMINISTRATIVE STAFF Assistant Director, OTA Judith L. Wagner Beckie Erickson Project Director Office Administrator Sean R. Tunis Health Program Director Jacqueline A. Corrigan Daniel B. Carson Scnior Analyst P.C. Specialist David Klingman Carolyn Martin Senior Analyst Word Processing Specialist Leah Wolfe Analyst Philip T. Polishuk Research Analyst PRINCIPAL CONSULTANTS Russell Localio Jeremy Sugarman Pcnnsylvania State University Duke University CONTRACTORS Laura-Mae Baldwin Pony Ehrenhaft Gloria Ruby University of Washington Consultant Consultant Kevin Grumbach Mark Hall Peter Glassman University of California/San Wake Forest School of Law RAND Francisco Peter Jacobson Harold S. Luft RAND Eleanor Kinney University of California/San Indiana Univcrsity Francisco Thomas Metzloff Duke University Laura Morlock John Rolph The Johns Hopkins Univcrsity RAND John Rosenquist University of California/Davis v c ontents 1 Findings and Policy Options 1 Defining Defining Defensive Medicine 3 The Extent of Dcfcnsive Medicine 3 Recent Factors Affecting the Amount of Defensive Medicine 9 The Impact of’ Malpractice Reform on Defensive Medicine 10 Defensive Medicine in an Era of Health Care Reform 15 Policy Options 16 2 Defensive Medicine: Definition and Causes 21 Defining Defensive Medicine 21 The Sources of Defensive Medicine 26 Conclusions 36 3 Summary of the Evidence on Defensive Medicine 39 Evidcncc of the Extent of Defensive Medicine 43 Conclusions” 74 4 Impact of Malpractice Reform on Defensive Medicine 75 The Impact of Conventional Malpractice Reforms on Direct Malpractice Costs 76 Impact of Newer Malpractice Reformas on Defensive I I Medicine 81 Defensive Medicine and Health Care Reform 91 Conclusions 92 APPENDIXES A Method of Study 95 B Acknowledgments 101 c The Impact of Nonclinical Factors on Physicians’ Use of Resources 104 D Methods Used in the OTA Clinical Scenario Surveys 106 E Detailed Results of the OTA Clinical Scenario Surveys 118 F Estimates of the Costs of Selected Defensive Medical Procedures 128 G Summary of State Studies on Tort Reforms 133 H Clinical Practice Guidelines and Malpractice Liability 140 I Description of 32 Direct Physician Surveys of Defensive Medicine Reviewed by OTA 149 J Detailed Critique of Reynolds et al. and Lewin-VHl Estimates 154 K Glossary 160 REFERENCES 165 INDEX 179 Findings and Policy Options 1 SUMMARY OF FINDINGS . Defensive medicine occurs when doctors order tests, proce- dures, or visits, or avoid certain high-risk patients or proce- dures, primarily (but not necessarily solely) because of con- cern about malpractice liability. ● Most defensive medicine is not of zero benefit. Instead, fear of liability pushes physicians’ tolerance for medical uncertain- ty to low levels, where the expected benefits are very small and the costs are high. ● Many physicians say they would order aggressive diagnostic procedures in cases where conservative management is con- sidered medically acceptable by professional expert panels. Most physicians who practice in this manner would do so pri- marily because they believe such procedures are medically indicated, not primarily because of concerns about liability. ■ It is impossible to accurately measure the overall level and na- tional cost of defensive medicine. The best that can be done is to develop a rough estimate of the upper limits of the extent of certain components of defensive medicine. Overall, a small percentage of diagnostic procedures--certain- ly less than 8 percent—is likely to be caused primarily by conscious concern about malpractice liability. This estimate is based on physicians’ responses to hypothetical clinical scenarios that were designed to be malpractice-sensitive; hence, it overestimates the rate at which defensive medicine is consciously practiced in diagnostic situations. 2 | Defensive Medicine and Medical Malpractice INTRODUCTION For more than two decades many physicians. re- searchers, and government officials have claimed that the most damaging and costly result of the medical malpractice system as it has evolved in ■ Physicians are very conscious of the risk of be- the United States is the practice of defensive medi- ing sued and tend to overestimate that risk. A cine: the ordering of tests, procedures, and visits, large number of physicians believe that being or avoidance of certain procedures or patients, due sued will adversely affect their professional, to concern about malpractice liability risk. financial. and emotional status. Calls for reform of the medical malpractice sys- tem have rested partly on arguments that such re- ■ The role of the malpractice system as a deterrent against too little or poor-quality care--one of forms would save health care costs by reducing its intended purposes—has not been careful- doctors’ incentives to practice defensively. Such ly studied. an argument even found its way into the 1992 presidential debates, when President Bush con- tended that “the malpractice ...trial lawyers’ law- suits ...are running the costs of medical care up $25 to $50 billion.’” (35) Such claims notwithstanding, the extent of de- fensive medicine and its impact on health care costs remain a matter of controversy. Some critics claim that defensive medicine is nothing more than a convenient explanation for practices that physicians would engage in even if there were no malpractice law or malpractice lawyers. This Office of Technology Assessment (OTA) ■ One malpractice reform that directly targets study of defensive medicine grew out of congres- wasteful and low-benefit defensive medicine sional interest in understanding the extent to is to enhance the evidentiary status in mal- which
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