One of the arguments for “tort reform” is that lawsuits increase the cost of medical care.  That is certainly true.  The next question is: “How much does the price go up?”

Numerous economists have studied this issue.  If one looks at malpractice insurance paid by doctors, the answer is less than one penny for every dollar spent on medical care.  That isn’t too bad.  When we compare what we pay for auto insurance and homeowners insurance, malpractice insurance is pretty reasonable.

Some doctors complain that the malpractice insurance premiums are outrageous.  For some doctors that may be true, especially if they have a history of claims.  On average, however, the cost is less than 1% of gross receipts.  While it may sound outrageous that a clinic is paying $100,000 in malpractice insurance per year, when one considers that the clinic is doing more than $10,000,000 in business, the $100,000 doesn’t seem quite as high.

The next argument is that defensive medicine increases the cost significantly.  Many claim that defensive medicine may increase the cost by more than 10%.  What is defensive medicine?  Defensive medicine is the practice of ordering unnecessary tests and procedures to protect a doctor from malpractice claims.

Clark Newhall is a physician and attorney.  He practices law and medicine in Salt Lake City.  In a recent letter to the editor, published in the Journal of the American Heart Association, Clark Newhall questions the truthfulness of these claims.

He explains that by definition, any doctor who practices defensive medicine without disclosing as much to the patient is committing malpractice.  Doctors are ethically bound to practice medicine in a way that is in the best interest of the patient.  A doctor may not order tests and procedures whose only benefit is to the doctor.

Next time a doctor claims that defensive medicine is driving up the cost of health care, the first question to that doctor should be, do you personally practice defensive medicine?  If not, do you have personal knowledge of colleagues who practice defensive medicine?  If yes, have you turned them in for unethical behavior?