Defensive Medicine refers to the concept that doctors order unnecessary tests and extra medical procedures as a means to avoid medical negligence lawsuits. However, research at Dartmouth Hitchcock College of Medicine and other studies support there is very little evidence of widespread defensive medicine.
Research does however support that physician motivation behind defensive medicine is not a liability concern but rather a need to abide by a patient’s demands, and in some cases, financial incentive – boost physician income. Healthcare authorities in Florida discovered diagnostic-imaging centers and clinical labs were ordering excessive tests because the majority were physician-owned and the tests provided a streamlined income. Federal law now prohibits the referral of Medicare patients to certain physician-owned facilities, many of which were found to charge double fees. In the wake of discovering increased income generated by physicians, research by the National Practitioner’s Databank found that increased medical malpractice risk paralleled improved mortality rate, and concluded that defensive medicine had a positive effect on patients.
It is widely believed that physicians hand-select patients and self-refer profitable procedures and insured patients to their own hospitals, drawing much-needed income away from community hospitals where patient population is becoming more complex and less well-financed. The American Hospital Association is debating a policy that would forbid doctors from referring patients to hospitals in which they have financial stake.