Immunizing Doctors from Lawsuits Doesn’t Reduce Medical Costs

An article of faith among doctors is that they order huge numbers of unnecessary and expensive tests like MRIs and CT scans solely to protect themselves from malpractice lawsuits. If this “defensive medicine” really happens, immunizing doctors from lawsuits should cut down on wasteful testing and save us all a lot of money.

A new study from the RAND Institute finds no evidence of any such savings when emergency medicine doctors obtained virtual lawsuit immunity from the legislatures of three states: Georgia, Texas and South Carolina. The study was published in the prestigious New England Journal of Medicine.

Use of tests like CT and MRI, overall costs and decisions to admit patients from the ER to the hospital — all of these showed no different trend in the three immunity states compared to control states that had not immunized their emergency doctors.

The researchers, led by a UCLA emergency medicine doctor named Daniel Waxman, studied millions of ER visits since the three states passed their malpractice reforms in 2003 (Texas) and 2005 (Georgia and South Carolina).

All three states changed their legal standards for what a patient has to prove to win a malpractice case, getting rid of the time-honored ordinary negligence/carelessness standard that applies to everyone else who hurts someone. Now, patients must prove that the emergency room doctor was “willful and wanton” (Texas) or “grossly negligent” (GA and SC). That means the patient must show the doctor actually knew there was a high risk of serious injury and ignored it. As a practical matter, that provides virtual immunity from lawsuits.

In all three states, lawsuit filings against hospital emergency rooms have plunged since the new legal standards went into effect. So the medical industry, especially malpractice insurers, has saved a lot of money at the expense of injured patients. But what about the costs of patient care? That’s where the new study found no evidence of any changes in the habits of ER doctors. They still test at the same rate and keep patients overnight at the same rate.

So does “defensive medicine” really exist? If you ask doctors in surveys, they insist it does. For example, a survey of ER doctors cited in the RAND study found 70 percent claimed they often ordered unnecessary tests as lawsuit protection, and most of those cited MRI and CT as their most recent act of defensive medicine.

The concept of “defensive medicine” has always been a head-scratcher for lawyers like me who represent patients in malpractice suits. Most of the time, defensive medicine is like defensive driving; it’s just good, cautious medical practice to test rather than guess and to proceed as if the patient might have a serious condition and not blow off troubling findings. And nobody ever sues a doctor for not ordering a test. They sue when a test wasn’t ordered and a catastrophe resulted because the test could have caught some serious process in time to turn it around. A truly unnecessary test, ordered only to protect the doctor and not the patient, would be insurance fraud if it really happened.

That’s why I’m skeptical of these anonymous doctor surveys that claim high rates of bogus testing. I think what’s going on is that doctors are looking for bogey men to blame for the high costs of medicine, and who better than lawyers?

The new RAND study doesn’t prove that all of the testing in modern ERs is absolutely necessary. But it does show that you cannot blame the lawyers for unnecessary testing. And maybe more important, it shows that cutting back on patients’ rights for legal accountability for serious injuries is not a good idea.