"Private health insurance pays about half of what physicians bill, Medicare pays about 20 percent and Medicaid pays even less."
So basically all of the payers in health care think physicians charge too much and refuse to pay those charges. That is what this statement means. And we know physicians charge too much because no one pays them what they charge yet they remain viable businesses.
And the always dubious claims regarding tort reform are just plain outrageous. Physicians paid around $10 billion in malpractice premiums last year. And payouts on malpractice claims were around $5 billion. Neither of these figures is a significant portion of U.S. health care costs. Yet, tort reform is once again being presented as a must-be-addressed issue by those who otherwise oppose all health care reform. Ande since $10 billion isn't enough to control health care costs, the tort reformers are relying mainly on an intangible boogeyman named Defensive Medicine.
The kindest thing that can be said about Defensive Medicine is that it is a strawman. It is not only intangible, but almost completely hypothetical in nature. Tort reform advocates claim that this bogeyman accounts for 10% of health care costs, $300 billion. Malpractice payouts accounts for $5 billion, but tort reformers want you to think that physicians spent 60 times that amount to prevent having to pay $5 billion. Really?
Now, I said the kindest thing that could be said about Defensive Medicine is that it is a strawman. But I am not feeling particularly kind toward tort reformers. If a physician orders a test merely to prevent a lawsuit . . . I cannot even complete that thought it is so outrageous. The physician hasn't prevented anything.
A malpractice claim is preciated upon a violation of the standard of care. If the standard of care does not call for a certain test, then ordering that test is not defensive. It is frivolous and unethical. If the standard of care does call for a test to be performed, then ordering that test is not defensive. It is the standard of care.
So if a physician claims to practice Defensive Medicine, remember that that physician is admitting to engage in Frivolous Medicine and confessing to unethical practices.