As I understand it now, doctors have largely invested in testing companies. When they (not all doctors obviously) - I probably thinking primary doctors - order tests the test is a money maker for the doctor.
Wouldn't a calculation of the effect of litigation include the scenario you mentioned? Otherwise it would seem to be a bad calculation. Do you have any studies that show how often a test is ordered simply to avoid a lawsuit?
The second link hardly endorses your view. It says
Although our estimates delineate a wide range of potential savings, systemwide savings from aggressive malpractice reform could approach $41 billion over five years.
According to one source [1] the U.S. spent $2.6 trillion in health care in 2010. An $8 - $9 billion dollar savings per year from eliminating defensive medicine hardly adds up to "a lot more than 2%".
I agree that the second link is saying more about the effects from malpractice reform. I have seen the Kaiser study, and what I think they are not taking into account is the culture of defensive medicine that may physicians don't even think about. For example, an MRI is more likely in a US Emergency Room than in a UK Emergency Room. UK practice is (in general) evidence based, and they won't order it unless it makes sense to do so. May US physicians would not identify this as "defensive" because the practice is so widespread, although the root reason for ordering it stems from that cause. I am not aware of an analysis that takes this into account.
I only read the abstracts, so correct me if I'm wrong, but both of those links fail to compare the US with other countries. I.e they don't show that costs in America are higher than other countries due to defensive medicine. It could be that all countries have higher costs due to defensive medicine, we wouldn't know from these studies.
Wouldn't a calculation of the effect of litigation include the scenario you mentioned? Otherwise it would seem to be a bad calculation. Do you have any studies that show how often a test is ordered simply to avoid a lawsuit?