Physicians estimate the cost of defensive medicine to be between 26 percent and 34 percent of annual total healthcare costs, according to a new online survey. At an estimated $2.5 trillion in annual spending, this means $650 billion to 850 billion is spent each year on unnecessary medical care.
This is a sharp contrast to the current belief that 3 percent, or $60 billion, of overall healthcare spending is wasteful, according to Richard Jackson, chairman and chief executive officer of Jackson Healthcare, the Atlanta-based firm that conducted the study.
According to Jackson, the physician data for the survey was gathered from a series of online physician surveys conducted between October 2009 and May 2010.
Not only are many U.S. physicians practicing defensive medicine, Jackson said, they're teaching younger physicians to do so.
Jackson recently published an online book titled A Costly Defense, in which he claims the economic and non-economic impacts of defensive medicine may be significantly greater than estimated.
"As we began to dig into understanding physician attitudes on defensive medicine, it became obvious to us that this was a major issue not being addressed by healthcare reform initiatives," he said. "Defensive medicine has far-reaching impacts beyond costs."
In addition to driving up the cost of healthcare, surveyed physicians reported that defensive medicine limits access to certain patients, drives over- and under-treatment, delays adoption of medical innovations and negatively impacts the supply and satisfaction of physicians, Jackson said.
"The traditional approach to defensive medicine has been tort reform in the form of damage caps. That is not a sustainable solution, and it only addresses the tip of a very large iceberg of costs," he said.