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 has become obvious 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.