Malpractice Insurance, Defensive Medicine Apparently Not That Big a Deal

Philip Betbeze, for HealthLeaders Media , September 10, 2010

My colleague Cheryl Clark reports on a Harvard University study in the journal Health Affairs showing the price tag of malpractice liability and defensive medicine at $55.6 billion a year, or 2.4% of healthcare spending, far lower than the HHS estimate of between $70 billion and $126 billion.

I've always felt that a simple argument rings true for people on both sides of an issue. This issue is king of that maxim. On one side of the argument, greedy lawyers are seeking to exploit a physician's best efforts to heal his patient. On the other, greedy doctors are looking for ways to escape liability for the harm they've inflicted.

But it's really not that simple. In fact, it's a sideshow compared to some of the major changes that health reform legislation will inflict on the industry. Healthcare reform legislation, with its ban on making coverage decisions based on pre-existing conditions as well as other restrictions on private insurers regarding who will be able to get coverage (basically everyone) will likely move the needle much more significantly than anything tort related.

Many of the insurance industry practices that will now be outlawed are hated for good reason, but they arguably help keep costs down. Even with 2,000 pages of legislation being implemented over the next several years, I don't see a recipe for cost-containment on the immediate horizon. That doesn't mean, however, that we don't have to come up with one.

Philip Betbeze is senior leadership editor with HealthLeaders Media.
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