DEFENSIVE MEDICINE AND MEDICAL MALPRACTICES IN INDIA: AN ECONOMIC ANALYSIS

Abstract

Medical science claims to have developed several ways of controlling health risks, increasing safety standards and protocols related to medical practices and procedures but it cannot claim that it has eliminated all other kinds of risks associated with it. The recent spurt in the litigation against medical professionals for medical negligence and the claim for redressal or compensation has shaken the confidentiality and patient-doctor relationship to a new high level. The increasing cost of medical malpractice litigation has increased the practice of defensive medicine. It is a medical practice that can be said as an act of economic security against potential allegations of negligence. The present study on economic analysis of medical malpractices and practice of defensive medicine focuses on a pre-existing market relationship between medical negligence and the resultant defensive practices adversely affecting many aspects of human life. The present research is divided into five sections. The first section deals with the nature of the existing market and the economic analysis of the relationship between medical negligence liability and its potential impact on the practice of defensive medicine. The aforesaid market relationship is much more pronounced in the western countries. It is based on the understanding of cost of litigation, the expectation of liability in excess to actual damages and the benefits accruing out of practicing defensive medicine in response to the above situation. However, in the context of India the relationship is not that simple. Particularly, when medical malpractice litigations are not very common practice by the victims and the so-called existing healthcare industry is already running at kickbacks for referring patients, inflating bills and thereby promoting defensive medical practices. In order to promote efficient transactions, exchanges and economic efficiency in the above market, role of legal means cannot be denied. The second part of the study examines the role of the insurance industry in dealing with medical claims. In an inefficient insurance market, insured medical claims remain low and out-of-pocket medical expenditure remains very high. This unethical socio-economic malpractice is economically inefficient and thereby inducing loss of socio-economic welfare of the people. The third section delves upon the unintended socio-economic impacts of the medical malpractices and defensive practice. Particularly in a welfare state like India, it neither results in an activity reinforcing excellence in the medical profession nor helps in achieving the constitutional mandate of ‘Right to Health’. An individual’s sense of wellbeing is incomplete in the absence of his physical as well as mental wellbeing and both of them are responsible for country’s economic and social development. The fourth part examines the relationship of law with defensive medicine. The role of law in regulating the market and thereby reducing healthcare costs is very important. Although it is very difficult to have correct estimates of medical liability costs and various components of it, the growing concerns related to increasing practice of defensive medicine has to be adequately addressed by law. The fifth and the last section discusses the conclusions and recommendations. Today, when the entire world is going through a phase of health crisis, the concerted effort of citizens and government becomes indispensable. In a country like India accessibility and affordability of medical facilities and insurance has to be ensured. With the continuous increase in health care costs the very objective of fair distribution of available healthcare facilities has become a difficult and unachievable task. In order to deal with the above complex and perplexing problem we need greater involvement of economics, law and suitable public policies. India’s fragmented health infrastructure may result in economic inefficiency, reduction in social and economic welfare, wastage of scarce medical resources and high-cost treatment.