Climate Change Project

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Just as ownership in a hospital potentially interferes with the physician's objectivity when evaluating the need for hospital care, ownership in a laboratory can encourage the ordering of unnecessary laboratory tests. Since there is no legal evidence that defensive medicine (the ordering of diagnostically unnecessary tests) reduces the probability of a medical malpractice lawsuit, many critics of this practice attribute it to direct and indirect financial incentives to order tests. The extent to which test ordering is influenced by nonmedical considerations will become critical as shifts to prospective reimbursement systems reverse these incentives and begin to penalize physicians for ordering tests. There are risks associated with ordering unnecessary tests but much greater risks in failing to order a necessary test.

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