Free Republic

We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active-duty or not—that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending with no measurable negative effect on patient outcomes.

Electronic health records were supposed to lower administrative costs, but they may not be getting the job done, according to a new study published this week in JAMA. Administrative costs made up as much as a quarter of professional revenue for some patient encounters, according to the study, which focused on a single academic medical center. Researchers attribute much of the high cost to varying contracts between the hospital and health plans and payer as well as varying price schedules. "After investing more than $30 billion in health IT, we haven't improved the administrative efficiency," said Dr. Kevin Schulman, one...

Healthcare costs for four common procedures are rising as hospitals and health systems employ more physicians, according to a new study. A 49% increase in hospital-employed physicians between 2012 and 2015 led to a $3.1 billion increase in Medicare costs related to four specific procedures in cardiology, orthopedics and gastroenterology, according to analysis from consulting firm Avalere Health. Medicare paid $2.7 billion more for diagnostic cardiac catheterizations, echocardiograms, arthrocentesis and colonoscopies delivered in hospital outpatient settings than it would for treatment in independent facilities, while beneficiaries footed a $411 million higher bill. Hospital-employed physicians performed more services in costlier hospital...