It’s a familiar back-and-forth: doctors demonizing medical malpractice lawyers claim that they are forced to practice “defensive medicine” because of frivolous medical malpractice lawsuits; medical malpractice lawyers say that the unnecessary tests and procedures are really done because doctors make more money when they carry out more tests and procedures.
This week the journal Health Affairs published the latest findings in this long-running dispute. Its conclusions? The fear of medical malpractice lawsuits adds $45.6 billion to our annual health care costs, about 2.4% of nation’s health care tab.*
But this figure is dwarfed by the costs added by the “fee-for-service reimbursement system and the incentives it provides.” In other words, if you’re looking to lower health care costs, you need to change the basis on which doctors are paid. If they are paid on a fee-for-service model, making more for every test and procedure that they perform, they will respond to those incentives by carrying out more costly tests and procedures.
If, on the other hand, they are paid on some outcome-based model (e.g., the patients in their practice lowering their weight, lowering blood pressure, etc.) we won’t have those wasteful expenditures and our health care costs will come down.
When you pay someone on a fee-for-services model, you get a lot of services and a big bill. This is becoming increasingly obvious in the legal world, where the defense lawyers work on a billable hours model. The billable hours model incentivizes lawyers to drag out a case and make everything as expensive as possible.
Ted Frank over the the tort reform website Point of Law.com had a great post on this just the other day, where he mentioned (with disgust) defense lawyers who had confided in him that they love costly drawn out litigation. (As a complete aside, Ted’s idea about recruiting defense lawyers on ideological lines is a brilliant one. Legal recruiting is expensive and inept. And for firms to keep lawyers on board, the lawyers have to enjoy or believe in what they are doing).
Personal injury plaintiff’s lawyers, on the other hand, do not work on a fee-for-service model. We work on a outcome based model: the contingency fee. We do not get paid unless we win a jury verdict or a settlement. As I’ve blogged about before, this has the effect of aligning the lawyer’s interests perfectly with the client’s.
Maybe doctors should be more like medical malpractice lawyers. It might be the number one thing we can do to lower our health care costs.
*Footnote: The study’s authors derived this number by extrapolating from a study of the costs of defensive medicine in the treatment of cardiac Medicare patients, an obviously small (and perhaps unrepresentative) group. The study did not attempt to take into account any decreases in the cost of health care brought about by any deterrent effect to medical malpractice litigation.
This blog is maintained by the Boston medical malpractice lawyers at The Law Office of Alan H. Crede. It does not contain legal advice, nor should you construe it as legal advice relevant to any claim that you may have.