August 18, 2012

In an article appearing on August 1, 2012 in The New England Journal of Medicine, a group of doctors and other health professionals expressed their opposition to the arbitrary caps (limits) on damages that many U.S. states have imposed on the amount of the recoveries that victims of medical malpractice may recover.

The article states, in part: Strategies to control costs associated with medical malpractice and defensive medicine must be responsible and targeted. These strategies must not impose arbitrary caps on damages for patients who are injured as a result of malpractice. According to the Congressional Budget Office, arbitrary caps on damages would reduce national health spending by only 0.5%. But although such caps would have a barely measurable effect on costs, they might adversely affect health outcomes.

It is refreshing to see a prominent group of physicians and health care professionals acknowledge that commonsense, logic, statistics, and facts (and not opinions parading as facts) lead to only one conclusion: that caps on damages in medical malpractice cases do not provide significant health care costs savings and they negatively affect the victims of medical malpractice.

Nonetheless, the authors of the article blindly refer to “the costs of defensive medicine” (the practice of ordering certain medical tests or providing certain medical care due solely to a fear that health care providers may be sued for medical negligence if they fail to do so) that they say need to be reduced: Regardless of whether a claim results in liability, the risk of being sued may cause physicians to practice a type of defensive medicine that increases costs without improving the quality of care.

While the authors refer to “the costs of defensive medicine” without providing facts or statistics to quantify such alleged costs, we find it both interesting and telling that the authors nonetheless state their opinion that physicians should be prohibited from referring their patients for medical testing and other health care in which they have a financial interest, which we believe is a greater factor why doctors order certain tests (that is, they earn money in their pockets every time they order such tests) rather than the often-expressed proffer that they are practicing defensive medicine by ordering such tests: Many studies show that when physicians self-refer patients to facilities in which they have a financial interest, especially for imaging and pathology services, they drive up costs and may adversely affect the quality of care. Under the so-called Stark law, physicians are prohibited from referring Medicare and Medicaid patients to facilities in which they have a financial interest. However, an exception allows physicians to provide “in-house ancillary services,” such as diagnostic imaging, in their own offices. We believe that the Stark law should be expanded to prohibit physician self-referrals for services that are paid for by private insurers. In addition, the loopholes for in-office imaging, pathology laboratories, and radiation therapy should be closed. Physicians who use alternatives to fee-for-service payment should be exempted because these methods reduce incentives to increase volume.


It is crucial for people in the United States to realize and appreciate that health care in the United States is a business, with health care providers (hospitals, doctors, clinics, and the like) using well-defined business models in their structure and their provision of goods and services to their customers (those who seek their medical services). Even not-for-profit health care providers, such as some hospitals operated by charitable organizations, must and do in fact run their operations as businesses: services and goods are provided for which prices are established ahead of time and billed to either the consumers or their health insurance companies.

And like all businesses, those who provide superior goods and services should and do survive and even prosper, and those who fail to provide the minimum quality of goods or minimum level of acceptable services must be held fully accountable to their customers when the goods and services offered for sale are defective or substandard and thereby cause foreseeable damages and harms.

If you may have become the victim of medical malpractice in the United States, you should promptly consult with a local medical malpractice attorney regarding your possible medical malpractice claim.

Click here to visit our website or telephone us on our toll-free line at 800-295-3959 to be connected with medical malpractice lawyers in your state who may be willing and able to assist you with your potential medical malpractice case.

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