The Rise of Overdiagnosis and Overtreatment

Abstract

Modern healthcare faces a critical tension between compassion and commerce. This perspective examines how patient demands, insurance pressures, and revenue targets have contributed to overdiagnosis and overtreatment in clinical practice. Drawing from personal clinical experience and evidence-based research, this article explores the "triangle of moral hazards" involving patients, providers, and insurers, and argues for a return to foundational medical principles that prioritize patient education, preventive care, and judicious use of interventions.

Introduction

In today's fast-paced world, medicine has become a balance between compassion and commerce. With increasing patient demands, insurance pressures, and clinic revenue targets, healthcare has slowly drifted from its foundation, healing with prudence and empathy. What happens when the intention to "do more" for patients begins to harm instead?

When I stepped into the journey of becoming a doctor, we were rigorously trained to always be safe doctors. That included three key aspects: excellent history taking, thorough bedside examination, and ordering only necessary investigations when required.

Argument

Fast forward to the current working environment, in one of the busiest and largest clinics, serving lower socioeconomic workers, with an average of 50 patients per day. It only sharpened my persona as a safe doctor. Handling management expectations, however, is what we call "too many cooks spoil the dish." In today's world, where everything revolves around fast and instant results, I believe patients have come to expect the same when it comes to their illnesses. In outpatient clinics, the advised consultation time averages 15–20 minutes per patient, yet the waiting time is often much longer than the consultation itself.

Sometimes, when I visit doctors myself, I notice that the soft skills of active listening, empathy, and patient education seem to have disappeared. There is often a monotonous tone of communication between the doctor and patient; the doctor is busy hiding behind the screen, typing notes and medications, rather than truly listening or examining. As a medical professional, I can empathize when a patient regularly complains that doctors don't pay attention or even listen to them. On the contrary, I understand that an acute flu seldom requires much investigation or intervention, but most of the population lacks access to accurate health education and preventive knowledge. Hence, it is of utmost importance that we, as medical professionals, treat patients as humans rather than as symptoms.

Medical conditions usually begin with either conservative or interventional management. In an outpatient setting, conservative or medical management, combined with thorough education and preventive guidance, along with monitoring of symptoms, is often enough to help the patient recover quickly. Sometimes, an additional medication in appropriate doses helps, but then, why does every patient who visits a clinic come out with a shopping bag full of medicines and a sheet of paper with many investigations for a one- or two-day illness?

Somewhere in this modern world, and under the constant need to meet company financial expectations, healthcare professionals have lost touch with the essence of medicine, the principles our textbooks taught us. As the world evolves, so do diseases and illnesses, and the pressure on healthcare systems is now higher than ever, with patients becoming more demanding and concerned than before. Why is that?

A major factor is the increasing reliance on health insurance, a tool meant to benefit patients but which has become a double-edged sword. As the number of insured patients rises and out-of-pocket payments fall, the demand for clinic visits increases. This, in turn, raises the likelihood of healthcare providers prescribing unnecessary drugs. Since prescribing doctors do not bear the financial burden of treatment, the insurance covers it, and it indirectly drives up clinic revenues. This cycle also benefits insurance companies, which maintain higher premiums while implementing more restrictions that can ultimately cost the patient in the long run (Bollinger et al., 2022; Sokal et al., 2022; Light, 2025).

Moreover, a clear trend has been observed where patients with insurance plans that offer broader coverage or more expensive provider networks tend to receive more extensive investigations, treatments, and medications compared to patients with lower coverage. Healthcare providers appear more likely to "oversplurge" when costs are covered, reflecting how the structure of insurance benefits can directly influence prescribing and treatment patterns.

This creates what is universally termed the 'triangle of moral hazards'. Even though patients may appear to trigger this system by seeking care, the real issue lies in the less-discussed sides: the doctor and the insurer (Sokal et al., 2022; Frontiers in Public Health, 2022).

It has been observed that insured patients in private clinics are more likely to receive at least one unnecessary antibiotic prescription compared to patients seen in government or academic hospitals. This trend is concerning and only continues to grow (Bollinger et al., 2022).

Overall, as more expensive medications are prescribed, often justified as "necessary," the costs are ultimately borne by the patient as co-payments. However, since insurance covers most of the cost, the trend toward prescribing higher-cost drugs continues to rise. Doctors, hospitals, laboratories, and clinics can all benefit from providing more tests, procedures, and medications than truly necessary, especially when they are paid per service and the expenses are covered by insurers. Patients trust providers to know what care they need, which allows providers to influence demand. Because they control the decisions, this provider moral hazard becomes a powerful driver of rising medical bills.

Implications

There is a clear upward trend in this pattern, one that sits in a gray zone, where it becomes vital for healthcare professionals to reflect on and uphold the Hippocratic Oath. We must act in the best interest of the patient, providing education and empowering them to understand that prevention itself is the best cure. Only then can we reduce the burden on the healthcare system and ensure that insurance remains a tool to protect the truly needy, not a means to inflate unnecessary medical spending (Frontiers in Public Health, 2022).

Conclusion

Only then can we reduce the burden on the healthcare system and ensure that insurance remains a tool to protect the truly needy, not a means to inflate unnecessary medical spending (Frontiers in Public Health, 2022).

References

• Lagarde, M. and Blaauw, D. (2022). Overtreatment and benevolent provider moral hazard: Evidence from South African doctors. Journal of Development Economics, 158, p.102917. https://doi.org/10.1016/j.jdeveco.2022.102917.

  
  

• Qin, Y., Liu, J., Li, J., Wang, R., Guo, P., Liu, H., Kang, Z. and Wu, Q. (2022). How do moral hazard behaviors lead to the waste of medical insurance funds? Frontiers in Public Health, 10. https://doi.org/10.3389/fpubh.2022.988492.

  
  

• Light, D. (2021). The Three Moral Hazards of Health Insurance - Ideas. Institute for Advanced Study. Available at: https://www.ias.edu/ideas/three-moral-hazards-health-insurance