Restructure Medicare & Medicaid: Legal Forces that Push Up Healthcare Spending 1) Defensive Medicine 2) Possible Solutions (@)) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 311 Restructure Medicare & Medicaid: Legal Factors— “Defensive Medicine” Drives up Healthcare Spending ¢« Defensive Medicine consists of procedures or tests that a doctor orders to avoid possible future malpractice lawsuits. ¢ The practice is prevalent among US physicians and is contributing factor to healthcare spending. According to a survey of 824 physicians in 2005': - 93% said they had engaged in the practice of Defensive Medicine - 59% said they often ordered more diagnostic tests than medically necessary - 52% said they referred patients to other specialists in unnecessary circumstances - 33% said they often prescribed more medications than medically necessary Source: 1) David Studdert, et al., American Medical Association, “Defensive Medicine Among High-Risk Specialist Physicians ina velanle Malpractice Environment,” a (@)E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 312 HOUSE_OVERSIGHT_020997