Reduce health-care costs by replacing broken malpractice system

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In 2010 Congress adopted President Obama’s Affordable Care Act with the goal of providing access to high-quality, affordable health care.

One of the many flaws with the ACA is that it fails to address our broken medical malpractice system.

BY PLACING PHYSICIANS and hospitals at financial and professional risk when an error occurs, our medical tort system increases the cost of health care because it encourages the practice of defensive medicine. The system also decreases access to compensation for those with minor medical injuries, and interferes with quality improvement measures.

When I was a urology resident, I learned how doctors are encouraged to order more tests and procedures than are medically necessary to protect themselves from potential lawsuits. This practice of defensive medicine is wasteful and doesn’t add to the value of patient care. Because the adversarial nature of litigation is painful and distracting for physicians – who by definition enjoy teamwork and patient interaction – the incentives to practice defensive medicine are strong.

In 2005 Georgia passed a significant tort reform package that limited awards for pain and suffering to $350,000. Many thought the practice of defensive medicine would decrease, lowering health-care costs. The Georgia Supreme Court, however, found the cap on pain and suffering unconstitutional, and defensive medicine flourished because the risk of litigation did not diminish.

The only noticeable difference was the increased profit margins enjoyed by malpractice insurance companies. The actuarial firm Towers Watson estimates that, during the past five years, Georgia’s medical malpractice carriers earned an average of 47 percent profit. No wonder MAG Mutual Insurance Company has joined the Georgia Trial Lawyers Association in opposing any meaningful changes to our current system.

Since trial lawyers only pursue the few malpractice cases with the potential for large awards, which usually take years to resolve, we should look to New Zealand for a better model to compensate patients.

I SAW IT FIRSTHAND 10 years ago when I worked as a senior registrar in urology at Christchurch Public Hospital. In New Zealand, the Accident Compensation Corporation provides a scheme similar to our workers’ compensation system, where injured patients apply for compensation when an avoidable error occurs. As a result, defensive medicine does not exist in that country.

During my year in New Zealand, I found it refreshing to find doctors who could practice medicine without the worry of trial lawyers threatening their livelihood. The no-fault system has replaced the right to file a personal injury suit for medical claims since 1994 – and the results have been great for patients.

The system has provided an opportunity for open discussions about medical errors and improvements for patient safety – something rarely seen here in the United States. Doctors don’t worry about potential lawsuits and, because the Accident Compensation Corporation pays out all claims, New Zealand physicians don’t fear losing their personal wealth.

Georgia is considering a similar path. There is a proposal before the Georgia Senate to replace the state’s broken medical malpractice system with a Patients Compensation System patterned after New Zealand’s ACC and similar programs in Sweden and Denmark. Under the proposed “Patient Injury Act,” injured patients would have access to an independent medical review panel of medical experts who would rule on the merits of their case.

Money for the system will come from premiums paid by physicians like me, just as they are today. Unlike the Affordable Care Act, there would be no tax increases, penalties or extra fees imposed on the citizens of Georgia.

Since the proposed PCS eliminates the need for medical malpractice lawsuits, more of the awards would go to injured patients rather than the lawyers who file and defend medical malpractice claims.

THIS BOLD NEW idea for Georgia to reform our medical malpractice system, and in turn reduce health-care costs, would benefit providers, patients and the businesses that provide jobs in our state. It represents the most promising opportunity for our state to decrease health care costs while improving quality and access.

Please join me in supporting Senate Bill 141.

(The writer is an Augusta urologist. He earned his medical degree from the Medical College of Georgia.)

Comments (5) Add comment
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deestafford
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deestafford 12/08/13 - 08:03 am
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The doctor is right on...

The doctor is right on in his proposals. It's not unusual for some specialty surgeons to have annual malpractice premiums of over $300,000.

Texas has tort reform and doctors are flocking their in droves. Rather than having the power grab of the destructive obamacare crammed down our throats, all that was needed was to have tort reform and allowing people to buy health insurance across state lines just as we do with auto insurance. But no we couldn't have that. The best medical system in the world had to be destroyed. We won't get tort reform at the federal level until the influence of the Trial Lawyers Association is reduced.

As far as the uninsured goes, those who could not have afforded insurance some simple healthcare system could have been established to help them. One simple way would be to block grant money to the states and let them handle the situation as they see fit.

teaparty
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teaparty 12/08/13 - 01:55 pm
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KSL
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KSL 12/08/13 - 02:05 pm
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What a mess, teaparty.

What a mess, teaparty.

teaparty
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teaparty 12/08/13 - 03:03 pm
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KSL, But you can't get left
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KSL, But you can't get the left to admit it. They are afraid it will make the idiot in the WH look bad.

michaelend
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michaelend 12/08/13 - 06:01 pm
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This opinion piece is wrong.

I read with interest the comment by deestafford claiming that some Georgia doctors pay malpractice insurance of more than $300,000. I checked the October 2013 Annual Rate Survey by Medical Liability Monitor and found that the highest premium charged by The Doctors Company is $59,938. The highest premium charged by MAG Mutual is $64,884. The highest premium charged by Medical Protective is $57,072. Thus, deestafford is way off.
Going to the basic premise of the opinion piece itself, the evidence shows that the proposed solution to the presumed problem cannot work. The authors of an article published in the medical journal Health Affairs in April 2011 determined through review of medical records that there were 1,503,323 people who died or were injured by medical errors in 2008. That equates, on a population basis, to 46,904 people who die or are injured each year in Georgia because of medical errors. According to the National Practitioner Data Bank, there were only 160 people who received compensation in 2012 for injuries or death caused by doctor errors in Georgia. Thus, only one-third of one percent of the people who were injured received compensation. That means one out of every 300 people injured by medical errors actually received compensation. How could a system that would also adequately compensate the other 299 people possibly work? The annual payments would leap from the 2012 total of $65.6 million to $19.7 billion!
As to the myth of defensive medicine, an actual benefit of the malpractice system is that it reminds doctors to adequately diagnose problems, and, as a result, save lives. No doctor would do a diagnostic test without a reason. To do so would be unethical. If you or a member of your family were to survive a deadly medical condition because a doctor did a diagnostic study the doctor had been thinking of skipping, you would be forever thankful that there was an impetus for the doctor to have run the test.

Humble Angela
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Humble Angela 12/08/13 - 06:13 pm
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I see what the problem is,
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I see what the problem is, michaelend. Deestafford said "It's not unusual for some specialty surgeons to have annual malpractice premiums of over $300,000."

Then you narrowed that down to JUST doctors in Georgia. If you ignore the other 49 states (or the other 56 if you are the President) then your number might be skewed a bit. Looks like YOU might be the one who is way off.

michaelend
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michaelend 12/09/13 - 12:37 am
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Humble Angela's comment

Humble Angela, I answered with the Georgia information about malpractice premiums because the opinion piece discussed a proposal for changing the system in Georgia.
In response to your comment, I reviewed the premiums charged by the malpractice insurers for every state and the District of Columbia. There is no doctor in the United States who had to pay as much as $200,000 in malpractice premiums in 2012. Perhaps you and deestafford are confused because you have not kept up with malpractice premiums. The nationwide aggregate premiums charged have been reduced every year for the past six years, a total reduction of more than 21%. The medical professional liability insurers, meanwhile, have been enjoying increasing profits. The medical professional liability insurers have enjoyed an underwriting profit every year since 2006. That line of insurance was the only line in the country that had an underwriting profit in 2012. The other casualty insurers made money on investment income, not on underwriting. The reason for the string of underwriting profits in the medical professional liability line is that the nationwide payments to injured patients have dropped from $4,423,620,000 in 2004 to $3,130,680,000 in 2012, a reduction of 29%.
The $3,130,680,000 paid to people injured by doctor negligence in 2012 represented one-tenth of one percent of the total health care cost of $2.8 trillion in 2012. That is right, just one-tenth of one percent.
I hope these facts help to put the supposed problem into perspective.

Humble Angela
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Humble Angela 12/09/13 - 07:01 am
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BUT you posted "I read with
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BUT you posted "I read with interest the comment by deestafford claiming that some Georgia doctors pay malpractice insurance of more than $300,000." Then you went on to debunk THAT statement. Deestafford never made that comment, so your post is invalid and untrue. You only debunked your own statement, not deestafford's. Tricky use of words, but untrue and misleading. You've been caught and exposed.

Humble Angela
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Humble Angela 12/09/13 - 07:26 am
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"There is no doctor in the
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"There is no doctor in the United States who had to pay as much as $200,000 in malpractice premiums in 2012."

It's $204,864 in the counties of Nassau and Suffolk in New York.

Darn pesky facts.

michaelend
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michaelend 12/09/13 - 12:02 pm
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New York doctors

Humble Angela, why would a New York doctor pay a higher premium with Physicians' Reciprocal Insurers than he or she would pay for the same coverage with Medical Liability Mutual Insurance Company, where the highest premium is $184,802?

Humble Angela
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Humble Angela 12/09/13 - 01:39 pm
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I just was pointing out that
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I just was pointing out that what you posted was NOT true. You said "There is no doctor in the United States who had to pay as much as $200,000 in malpractice premiums in 2012." That statement is NOT true, therefor it casts doubt on the credibility of your entire post. (Second untrue statement you have made on just this page.) As for why pay more? Good question....people pay more for the same thing all the time, on a number of products.

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