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Is it defensive medicine or defending the pocketbook?
To the extent that defensive medicine does exist the research that has been done has shown that the true motivation behind it is not liability but rather a desire to simply help a patient or in some cases boost physician income. One government agency found that doctors chose not to order tests or diagnostic procedures 95% of the time. When doctors do order tests, those who do almost always do so because of medical indications. But only one half of one percent of all cases involved doctors who were ordered tests solely due to medical negligence concerns. General Accounting office has also determined that doctors may actually practice defensively because it generates more income. Defensive medicine is considered a revenue enhancing motive and one of the real reasons behind the utilization of extra diagnostic tests and procedures. In Florida health authorities determined that laboratories that do x-rays, MRI's or CT scans, known as diagnostic imaging and clinical labs were ordering additional tests because the majority were owned by doctors and the tests provided a lucrative stream of income on the side. Although federal law prohibits the referral of Medicare patients to certain physician owned facilities. Private pay insurance cannot prevent this. One researcher has even commented, "when medicine is a business, defensive medicine is understood and may even be profitable" the Congressional budget office recognizes that there was a financial incentive for defensive medicine but also identified there are potential health benefits to the patient "so called defensive medicine may be motivated less by liability concerns than by the income it generates for physicians or by the positive benefits to patients". Researchers at Tulane University found that defensive medicine actually has a positive effect on patients outcome. Contrary to popular belief defensive medicine is not driving up healthcare costs. One would think that states that have already limited liability for doctors through tort reform would have experienced significantly lower health care costs than states that do not limit liability. Kansas has some of the strictest caps in the county, which should eliminate any need to practice defensively thereby lowering healthcare costs in the state. Yet research shows that Kansas healthcare costs are in line with the rest of the nation. An article published in the New Yorker found healthcare cost will ultimately arise from the accumulation of individual decisions doctors make about what service and treatment to try. The most expensive piece of medical equipment as the saying goes is a doctors pen. One doctor recently admitted to CNN that more tests are ordered to generate additional income. He explained as follows, "Doctors are able to profit not just from being physicians like we have traditionally but by ordering tests on equipment that they own or sending patients to facilities that they own or have a financial interest in." Physicians own the majority of diagnostic imaging centers and clinical labs in Florida research has shown. Health officials in the state found owning the facilities and ordering additional tests provides a lucrative stream of income to physicians. Again all the federal laws prohibit the referral of Medicare patients to physician owned facilities. Private pay insurance may be referred without violation of any law. The American Hospital Association recently debated a policy that would ban doctors from referring patients to hospitals when they have a financial stake in the hospital. Many researchers believe that physicians will cherry pick patients and self refer profitable procedures and insured patients that are in hospitals. By doing this they take much of the needed income away from the community hospitals. This type of self referral behavior may damage the healthcare system at large by adding costs and weakening the healthcare safety net as community hospitals see their mix of patients becoming more complex and less well financed.