the whole malpractice lawsuit thing is baseless.... and malpractice cases are only a teeny part of insurance company expenditures in any event.
The cost of malpractice lawsuits and settlements are a relatively very small amount.
However, the cost of defensive medicine is where the real money is lost.
A perfect example is obtaining a CT scan on everyone who comes into the ED with a minor head trauma to rule out intracranial bleed. Studies have shown that with a simple physical exam and asking the patient questions, the risk of bleed is very low, thus not necessitating expensive imaging.
However, standard of care in the ED (which is not necessarily based on evidence, but based on what everyone else does) is that a CT is to be performed. This standard of care is based on all providers doing this test just in case so that we won't get sued...even though it is not cost effective or necessary.
Great point.
My 89 year old father was not feeling well, so they gave him 3 CAT scans. He figured the cost at thousands of dollars.
They wanted to give him a fourth, but he said no.
Now he feels fine.