The cost to avoid lawsuits adds up with a lot of tests that are not needed. Doctors end up doing whole batteries of tests on everyone to avoid the 1:1000 or higher chance that the person in their office with a headache really had an aneurysm and get the doctor sued for negligence when he sends them home.
Another side effect of all these tests is that many are extremely dangerous. CT scans in particular are ordered way too often and can does people with levels of radiation that lead to problems later in life.
Many tests, drugs and treatments have been applied in the name of defensive medicine.
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?
Citations re: excess testing:
http://www.ncbi.nlm.nih.gov/pubmed/15928282 http://www.ncbi.nlm.nih.gov/pubmed/10136689
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%".
[1] http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/...