Sounds like a possible market failure, though it is far too complex an arena for me to form a clear opinion.

I can see how malpractice fear would discourage hospitals and doctors from adopting a new technique without solid research backing it. And no individual hospital expects to gain enough (thanks to a slightly improved reputation) to compensate for the costs of independently doing the research.

How about the insurance company, then? It has an interest in patient/customers having fewer complications thanks to a cheap intervention. It probably has deeper pockets than an individual hospital. And it will have the authority to refuse malpractice judgements when doctors use a recommended procedure. (EDIT: But that won't stop people from suing doctors, who will then be even worse off if the insurance company won't cover resulting claims. Sigh.)

It's still possible for other insurance companies to eventually copy the leader, but the result is that all the companies benefit instead of just one. It's still good for the leader.

Also, it doesn't have to be all strict and scientific; the insurance company can give indemnity to doctors who offer a promising, low-risk treatment to patients on an opt-in basis. If the participating patients get better results, it might not be material for Nature, but it will still be beneficial for all concerned. As mk says, informed patients might request this treatment unilaterally, or even go the DIY route.

This is all very theoretical because in the real world everyone knows that NIH does research and DoT builds highways, and those agencies are not interested in competition. This example might be an unusually extreme case of low-tech, low-cost, high-reward technology that we let the rest of the world sort out, like using dent pullers and plastic bags to assist with difficult deliveries.

Thanks to you and mk for your thoughts.