"Lawsuits" are an easy scapegoat, but it's probably not a significant driving factor. For example, Texas has very strict tort reform laws which basically make

"Lawsuits" are an easy scapegoat, but it's probably not a significant driving factor. For example, Texas has very strict tort reform laws which basically make it impossible to sue a doctor for malpractice. But defensive medicine hasn't faded at all in the four years since those laws took effect. Structurally, our system is designed to over-treat. With co-pays, insurance, subsidized care, and contractual discounts, patients seldom are aware of the exact cost of treatment. How often do Doctors explain to patients up front both the tests to be performed and the line-item cost (both to you and to the payor) of each? Most doctors don't, and realistically can't, know the cost for each patient under each plan. Usually, it's a binary decision for the doctor (covered or not covered). Try it sometime. When your physician suggests a procedure, ask what the real cost is, and whether he/she thinks that the value of the results will be worth the expenditure compared to alternatives. It's simply not something that's "baked in" to the thought process of the medical profession either in medical school, residency, or thereafter.