The use of unnecessary medical tests and procedures driven by a fear of malpractice lawsuits, commonly known as 'defensive medicine', has been estimated to cost up to $46 billion annually in the U.S. 

It used to be that we didn't want medical decisions being made by insurance companies, and instead they became dictated by lawyers. 

For a recent paper, the authors estimated the cost of defensive medicine on three services – tests, procedures or hospitalizations – by asking physicians to estimate the defensiveness of their own orders. The authors invited 42 hospital physicians to complete a survey, which 36 physicians did and rated 4,215 orders for 769 patients in the research letter.  

Of the orders, 28 percent were rated as defensive and the mean cost was $1,695 per patient, of which $226 (13 percent) was defensive. Completely defensive orders represented about 2.9 percent of costs, mostly because of additional hospital days.

Michael B. Rothberg, M.D., M.P.H., of the Cleveland Clinic, and colleagues write, "In conclusion, although a large portion of hospital orders had some defensive component, our study found that few orders were completely defensive and that physicians' attitudes about defensive medicine did not correlate with cost. Our findings suggest that only a small portion of medical costs might be reduced by tort reform."  

Source: JAMA