Newt Gingrich thought he’d start his party’s preparation for the Healthcare Summit by rustling up some fake statistics to support Republican’s favorite healthcare subject: tort reform. He did a great job too. His think tank, Center for Health Transformation, funded Jackson Healthcare, a healthcare management company, to direct a physician survey on defensive medicine costs. Their results: defensive medicine accounts for 26% of US healthcare costs annually, to the tune of $650 billion.

Now, that sounds frightening and ever so significant. We must address tort reform now, as it will immediately eliminate a quarter of our healthcare costs, right? Not even close, sorry. Yes, 73% of physicians surveyed said they practiced some sort of defensive medicine over the last 12 months. However, it was the physicians’ self-reports of ordering unnecessary tests and treatments that formed the basis of that $650 billion waste estimate. 

What’s the problem with that? You probably remember McAllen, Texas, the infamous little town that costs Medicare more per patient than anywhere else in America. Physicians in that same town blamed defensive medicine for the high cost of care. The problem was that when they were gently reminded that tort reform had passed in Texas a few years back, they admitted that they were unaware of any lawsuits  occurring since then.

At the heart of the issue, we’re looking at a knee-jerk reflex. “We practice this way because of defensive medicine, because we’re afraid of lawsuits,” say physicians. Take that litigious threat away, and physicians practice exactly the same way. Why? Because we reimburse them based on the amount of care. Do more procedures, you make more money. We could pass tort reform all across the country, and perhaps see a $1 billion difference in our national healthcare bill. Considering we spent $2.5 trillion on healthcare last year, that’s extremely small potatoes.

Sorry Newt, self-reported pseudo-science based on physician claims does not make for good healthcare economics. It does, however, make a great argument for pay for performance. But that’s a progressive idea, isn’t it? Read the Jackson Healthcare press release here.

Photo Credit: Allie Caulfield

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