THE COSTS OF DEFENSIVE MEDICINE

I know that the direct costs of malpractive suits are a tiny part of total health care costs but I haven't been able to find how much the indirect costs are. This article provides some clues.

Malpractice Lawsuits Are ‘Red Herring’ in Obama Plan (Update1)
By Alex Nussbaum
June 16 (Bloomberg) --...annual jury awards and legal settlements involving doctors amounts to “a drop in the bucket” in a country that spends $2.3 trillion annually on health care, said Amitabh Chandra, a Harvard University economist. Chandra estimated the cost at $12 per person in the U.S., or about $3.6 billion, in a 2005 study.

About 10 percent of the cost of medical services is linked to malpractice lawsuits and more intensive diagnostic testing due to defensive medicine, according to a January 2006 report prepared by PricewaterhouseCoopers LLP for the insurers’ group America’s Health Insurance Plans.


The figures were taken from a March 2003 study by the U.S. Department of Health and Human Services that estimated the direct cost of medical malpractice was 2 percent of the nation’s health-care spending and said defensive medical practices accounted for 5 percent to 9 percent of the overall expense.