May 15

The Real Cost of Healthcare

by Wayne Oliver – Vice President, Center for Health Transformation
Originally published by AJC on May 18, 2011

We’ve all seen news reports of escalating healthcare costs and likely felt the implications of those spiraling expenses. Employers are shifting more costs to employees.  Many smaller companies are scaling back health coverage or dropping benefits entirely.

But there is a hidden cost of healthcare that no one wants to talk about and it’s one you’re going to start hearing more about: defensive medicine.

In healthcare, there can be “side effects” of medical procedures or prescription drugs. And, there is a rather significant “side effect” from the failure to do something about nuisance lawsuits filed against physicians. That side effect is called “defensive medicine.”

So we are clear, when physicians practice “defensive medicine,” they usually order unnecessary tests or procedures just in case they get sued.  According to a 2010 survey of physicians by Gallup for Alpharetta-based Jackson Healthcare, one of every four dollars spent in health care goes to defensive medicine.

The practice of defensive medicine is incredibly widespread and pervasive. Nearly every physician surveyed by Gallup indicated that he or she had ordered unnecessary tests or procedures, admitted patients to hospitals or other costly settings or prescribed unneeded prescription medications in the last year.

Defensive medicine is not only inconvenient as we are herded from one unnecessary test to the next, it is also very costly. And who picks up the tab for defensive medicine?  We all do.

How many times have we been given an unnecessary x-ray or CT scan for a routine illness or accident? A lot. How many times have we been referred to a “specialist” for “further evaluation?” Too many.

But rarely do we as patients ever question it.  Well, to be candid, the physicians who provide care and treat our illness or disease do it over and over again to protect themselves from lawsuits.  More specifically, physicians do their best to avoid lawsuits by subjecting all of us — their patients — to excessive and unnecessary tests and procedures.

States, including Georgia, have been trying to address civil justice reform for decades. Georgia adopted a comprehensive tort reform package in 2005 only to see the focal point – caps on pain and suffering – recently thrown out by the Georgia Supreme Court. Other provisions, have withstood court challenge including emergency room protections for physicians who treat patients.

But the only way to truly solve defensive medicine may be to create a “safe harbor” or a specialized health court for physicians and hospitals that embrace best clinical practices as determined by their peers and established by national specialty medical societies. When doctors are protected from frivolous lawsuits, they will stop ordering unnecessary tests, exams, drugs and procedures. In turn, patients, doctors, hospitals, providers and taxpayers will save billions of dollars in a healthcare system that never seems to stop escalating in cost.

About the author