Well, we're back to the defensive medicine argument.
Ezra's weighed in this time, calling the whole discussion of DM a red herring:
One of my least favorite detours in the health policy debate is the inevitable stroll down Defensive Medicine Avenue. The trajectory is something like this: Conservative Bob brings up malpractice suits. Communist Klein notes that the entire costs of medical malpractice -- lawyer fees, settlements, insurance premiums, everything -- are .46 of one percent of health spending in this country. Ouch. ConservaBob, reeling, throws his hail mary: defensive medicine.
Defensive medicine, henceforth DM, denotes otherwise useless procedures ordered by doctors afraid of lawsuits. Health wonk Kate Steadman, who thinks it bull, reviews the literature here. Health professional Shadowfax argues the other side here. Young physician Graham Walker stakes out the middle ground here. I fall closest to Kate, but I think the whole conversation is a red herring.
DM exists, to be sure, but it's not caused by lawsuits. It's caused by patients. If you define DM as procedures that wouldn't be ordered in a perfectly logical world, there's plenty of it. But the reason most of these tests are run has little to do with the abstract possibility of a lawsuit that the doctor is insured against anyway. They're done in order convert probabilistic diagnoses into virtual certainties.
I generally agree with Ezra; the real issue isn't defensive medicine at all, it's correcting a tort system that doesn't award injured patients properly or do enough to prevent medical error.
Be sure to check out the comment thread over at Ezra's. Another dimension here is clearly patient preference, and that even when tests are unnecessary patients will ask for them anyways, to ease their mind. Shadowfax also weighs in with some thoughtful comments.