A Physician’s Case: Overtreatment, Not Just Insurers, Is Driving Up Health Care Costs

A practicing internal medicine physician is arguing that the push to fix American health care has overlooked a major source of its costs: decisions made by doctors themselves, including unnecessary tests, hospital admissions and billing practices that inflate what is charged for care.

While much public debate over health care focuses on insurance companies — their claim denials, prior authorization rules and restrictions on treatment — the physician writes that the system generating those bills in the first place deserves equal scrutiny. Physicians decide which tests to order, which specialists to consult, which procedures to pursue, and whether a patient goes home, to the emergency room, or into the hospital. Those decisions, the author argues, carry financial consequences that are rarely examined with the same intensity as insurer behavior.

Doctors Themselves Flag the Problem

Survey data cited in the piece suggests physicians are aware of the issue. In a 2014 national survey, nearly three-quarters of physicians called unnecessary tests and procedures a serious problem, and 72 percent said the average physician orders an unnecessary test or procedure at least once a week.

A separate 2017 survey of more than 2,000 physicians found doctors estimated that roughly one-fifth of all medical care delivered nationally was unnecessary, including nearly one in four tests and more than one in ten procedures. Nearly 71 percent of respondents believed physicians were more likely to order unnecessary procedures when they stood to profit financially from them.

Hospitalization and the Cost of Caution

The author points to overhospitalization as a related driver of excess spending, describing firsthand observations of patients admitted for non-emergency conditions that could have been managed by outpatient providers. A 2016 survey of roughly 700 patients found that more than half of those who called their primary care office with a medical issue were directed to the emergency room without their primary care physician being consulted. A 2018 cohort study found that one in five hospital admissions could, in retrospect, have been avoided through discharge from the ER with outpatient follow-up.

The financial scale is significant. Federal data put inpatient hospital care spending at an estimated $550 billion in 2022 alone — a figure that does not include the separate fees physicians bill for their own services.

Billing Practices Draw Federal Scrutiny

The article also raises the practice of “upcoding,” in which physicians document conditions as more severe than they are to justify higher reimbursement. It cites examples such as a minor cough being documented as a COPD exacerbation, or a simple urinary tract infection labeled as sepsis.

These practices have drawn federal enforcement action. In 2017, hospitalist company IPC Healthcare agreed to a $60 million settlement after the Department of Justice alleged it encouraged physicians to bill for more complex and expensive care than they actually provided. In 2018, Prime Healthcare agreed to pay $65 million to settle allegations that 14 of its hospitals admitted patients who needed only outpatient care and billed Medicare for more serious diagnoses than patients actually had.

A federal investigation separately found that 42 percent of Medicare claims were incorrectly coded, contributing to $6.7 billion in improper payments, while another federal audit estimated hospitals received $1 billion in Medicare overpayments over two years tied to unsupported “severe malnutrition” diagnoses.

The Role of Defensive Medicine

The author does not attribute all overutilization to profit motives, pointing instead to a litigious medical environment that pushes physicians toward “defensive medicine” — ordering extra tests or admissions to guard against malpractice liability. In one national survey, 91 percent of physicians agreed that doctors order unnecessary tests and procedures to protect themselves from lawsuits. A separate study of hospital-based internal medicine physicians found more than one in four medical orders were at least partly motivated by defensive concerns.

Still, the author argues defensive medicine has become a convenient justification for complacency, writing that it is often easier for physicians to order another test or consultation than to exercise independent clinical judgment.

A Call for Accountability Within Medicine

The piece calls for change to begin inside the medical profession, urging residency programs to better instill resource stewardship in training physicians, with accountability continuing after training ends. It suggests physicians who repeatedly overutilize care relative to peers, accounting for patient complexity, should face consequences including reduced performance-based compensation.

The author concludes that expanding government health coverage, such as through Medicare for All, would change who pays for care but not how physicians practice, arguing that confronting overutilization within medicine must come before asking taxpayers to take on a larger financial burden for health care.