01 July 2026

Defensive medicine

When adherence to process becomes more important than outcomes, it's time to complain. One example is the practice of defensive medicine: 

Between 60 and 90 percent of U.S. physicians report practicing defensive medicine, defined as the practice of ordering of tests, procedures, and other medical care solely to reduce the threat of malpractice liability.  This additional care has been estimated to cost the U.S. as much as $50 billion annually, and this likely underestimates the scope of the problem. Why do so many doctors practice defensive medicine? maybe because it works, Anupam B Jena et al, 16 May 2016 

'It works' in the title of that study does not mean that defensive medicine generates better health outcomes; rather: 

[It was found that] physicians with higher spending in a given year—in other words, the physicians who ordered more tests or procedures for the “typical” patients—were substantially less likely to be sued for a malpractice incident occurring the following year. Source, cited in the above paper, but not currently visible on the web)

Doctors are reacting rationally to the incentives on offer: they are liable for under-diagnosis, but not for over-diagnosis. The incentives aren't solely financial: in the UK 'the primary driver behind this trend [toward over-testing] often lies in a "better safe than sorry" mindset, coupled with a growing emphasis on preventive medicine.' (Source)

The problems caused by over-diagnosis are not limited to its waste of resources arising from unnecessary treatment and its adverse effects, and treatments that bring no benefit: there are also the psychological harms such as anxiety, stress, depression, and the burden of being unnecessarily labelled as having a disease. 

We need to rejig the incentives so they align with people's health. I suggest we explicitly target broad, meaningful indicators of national health and reward improvements in these indicators however they are achieved. Funding should be dictated by its expected benefits to people, rather than to liability lawyers. Resources should be directed to where they will achieve the maximum improvement in health per pound spent. Such improvement could be measured using such indicators as Quality Adjusted Life Years, longevity and an array of other measures. 

My suggestion, therefore, is that we apply the Social Policy Bond concept to health, and issue Tradeable Health Outcome Bonds (THOCs), which would provide incentives to research, develop and refine all approaches to improving our health, including measures that are currently thought to be beyond the remit of health authorities, but that could nevertheless generate large positive health improvements. Such measure might include measures as varied as better public transport for low-income households, subsidised apprenticeships, or lobbying for more controls on alcohol outlets. There are many other possibilities - but, currently,  few incentives to explore their potential health impacts. A bond regime would not assume that existing healthcare organisations are best placed to deliver all such impacts: it would encourage investors in the bonds to direct resources into any those approaches that promise to bring about the best improvements in health. My essay on THOCs is long, at 9500 words. A shorter version is here