Higher-spending physicians face fewer malpractice claims, and it is believed the reason is because they run a lot of tests to cover every possibility - all to keep lawyers at bay in case anything at all goes wrong for the patient.

Nearly three-quarters of physicians report practicing this "defensive medicine", which is broadly defined as the ordering of tests, procedures, physician consultations and other medical services solely to reduce risk of malpractice claims. Defensive medicine is estimated to cost the U.S. as much as $50 billion annually and that number is only going to go higher in an Obamacare world, where health care can now bring the full force of federal prosecution down on any mistake.

Despite its ubiquity among physicians, whether or not higher spending by physicians actually reduces malpractice claims is unknown. One view is that better communication and early apologies for errors can reduce a physician's liability. However, greater spending by physicians could also either reduce errors or signal to patients, attorneys and courts that despite an error, a physician was exhaustive in his or her care.

The research was led by Anupam Jena, associate professor of health care policy at Harvard Medical School and an internist at Massachusetts General Hospital. The findings, published in the BMJ, combined data on 18,352,391 hospital admissions in Florida during 2000-2009 with data on the malpractice histories of the 24,637 physicians who treated patients during those hospitalizations. Overall, 4,342 malpractice claims were filed against physicians (2.8 percent per physician-year), with malpractice claims rates ranging from 1.6 percent per physician-year in pediatrics to 4.1 percent per physician-year in general surgery and obstetrics and gynecology.

Jena and colleagues at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California and at Stanford University found that in six out of seven specialties, higher-spending physicians faced fewer malpractice claims, accounting for differences in patient case-mix across physicians.

For example, among internal medicine physicians, those in the bottom 20 percent of hospital spending (approximately $19,000 per hospitalization) faced a 1.5 percent probability of being involved in an alleged malpractice incident the following year, compared to 0.3 percent in the top spending quintile (approximately $39,000 per hospital admission).

Similar findings were seen in C-section rates among obstetricians. High C-section rates are commonly considered a signal of defensive practice, and obstetricians who performed relatively more C-sections were less likely to face a malpractice claim.

"It has remarkably been unknown whether defensive medicine 'works' or whether the majority of U.S. physicians could be incorrect in believing that greater spending is associated with reducing malpractice liability," said Jena.

Prior work by Jena and co-author Seth Seabury, a Fellow at the Schaeffer Center and associate professor of clinical emergency medicine at the Keck School of Medicine at USC, has found that the typical physician spends nearly 11 percent of their career with an open malpractice claim and that in high-risk specialties, the lifetime risk of being sued is nearly 100 percent.

"The threat of malpractice is a very salient risk for most practicing physicians, particularly in high-risk specialties," Seabury said. "If physicians perceive that higher spending can protect them from malpractice claims, then they are likely to practice defensively even if they feel that the additional spending is unnecessary or offers no clinical benefits to patients."

An important limitation of the study is that it could not conclude exactly why greater spending by physicians was associated with fewer malpractice claims. Moreover, whether higher levels of spending were defensively motivated by malpractice concerns is still unknown.