ATLANTA — An effort to lower medical costs that would change the way patients are compensated in malpractice cases is gaining traction among Georgia conservatives.
A Gallup survey this summer found that 26 percent of all health care spending in Georgia is on unnecessary tests.
The state’s doctors ring up $15 billion annually in avoidable costs, mostly in efforts to create evidence in case they are sued. Just in the state’s Medicaid program, that amounts to $4 billion of expenses passed along to taxpayers every year, according to BioScience Valuation in a study sponsored by the Atlanta-based advocacy group Patients for Fair Compensation.
“This is massive savings, something to be taken very seriously,” said Charles R. Evans, the vice chairman of Patients. “Certainly it should draw the attention of every state lawmaker grappling with fiscal uncertainty.”
The latest proposal calls for establishment of a no-fault patient compensation system similar to state workers’ compensation plans.
A century ago, Wisconsin enacted the first state workers’ compensation law when employers agreed to pay medical bills and wages without a court finding them at fault and workers agreed to give up their right to file suit. Employers were required to purchase insurance to guarantee the payouts.
Such a tradeoff in the medical arena would require doctors and hospitals to compensate victims without going to court, and patients would give up the right to pain-and-suffering awards. Their compensation would be granted by an independent panel based on national standards for specific injuries.
“We think we can increase the number of victims that are compensated and get them the money faster,” said Kelly McCutcheon, the president of the market-oriented think tank Georgia Public Policy Foundation.
Victims could still sue for cases of gross negligence – if a surgeon operated while drunk, for example – but those have a higher burden of proof than the standard used today for most medical-malpractice cases.
Georgia followed Texas, California and other states in enacting a legal cap on pain-and-suffering awards at $250,000. Unlike those states, it did not pass a constitutional amendment, and the Georgia Supreme Court ruled the cap unconstitutional.
McCutcheon said no constitutional amendment would be needed for a patient compensation system, although others disagree.
The Texas caps slowed the rise in premiums doctors pay for their liability coverage, but they didn’t improve the bills their patients received. Instead, Medicare spending there rose faster than the national average, according to the advocacy group Public Citizen.
Those results don’t surprise Tom Baker, a University of Connecticut professor and author of The Medical Malpractice Myth.
“There is lots of talk about the heavy burden that ‘defensive medicine’ imposes on health costs, but the research shows this is not true,” he wrote.
Unreasonably large jury verdicts aren’t the cause of high liability premiums; malpractice is, he says.
Pushing the idea of patient compensation is Rick Jackson, the founder of a network of health companies based in Atlanta. He founded the Patients group and put his employees, including Evans, into its leadership posts.
The organization tried unsuccessfully to persuade the Florida Legislature to pass the proposal last year.
So far, according to McCutcheon, no Georgia lawmaker has committed to introducing it as a bill. But it could win support from Gov. Nathan Deal, who was once chairman of a key health subcommittee in Congress. As a candidate in 2010, Deal blasted the Supreme Court for overturning Georgia’s lawsuit caps.
Deal appointed Jackson to the Community Health Board, and the board’s chairman, Ross Mason, complimented Jackson on the concept at his first meeting in August.
Mason said he and Jackson would not comment for this report because their board positions would imply that the Department of Community Health formally endorsed the concept.
A survey released last week by Emory University Law School Professor Joanna Shepherd-Bailey found that trial lawyers reject 90 percent of the patients who ask them to sue, not because the cases are weak but because the rewards won’t be big enough.
“In fact, over half of the attorneys responded that, even for a case they are almost certain to win on the merits, they will not accept the case unless expected damages are at least $250,000,” she wrote. “For a case that they are only slightly likely to win, the vast majority of attorneys require minimum expected damages of $500,000 to accept the case.”
As a result, only about 1 in 100 patients who suffered from an avoidable medical accident wound up compensated.
A fast, inexpensive system that patients could use without having to hire a lawyer is the answer, according to McCutcheon.
“I think it’s really a social justice issue,” he said.