[btilly]

You have the US math wrong.

    if profitFromTreatment <= profitFromNoTreatment:
        doTreatment

The legal system enters into it because it affects profit. Health risks only enter into it indirectly through the legal system.

It is easier to sue for not treating than for over treating, and treating generates a profit. Therefore the default is excess treating EVEN THOUGH health outcomes are equivalent to worse.

(If you think this might be absurdly expensive, you are right. A glance at the costs and outcomes in the US vs other countries verifies this.)