Dirtybird, I think you hit the neail on the head with defensive medicine and financial incentives causing most unneceessary tests (overutilization). I would add a third factor: patient preference. A lot of patients want to always see pics or a lot of test results because they feel that that is what a thorough doc does.

My suggestion is: adjust the medicare reimbursement (private insurance will likely follow in a parallel pattern, on a higher level). Docs in a procedure get like 1.2 to 2 times the money you get for evaluating a patient (in other words, if a 1 hour consult is reimbursed with 200 bucks, a cardiologist doing an angioplasty taking the same time gets something like 300 (exact rate depending on risk and training needed for the procedure in question).

That would easily save billions and improve outcomes. Of course that proposal would create a shitstorm from proceduralist docs (not all specialists are proceduralists) and the AMA.