Med-Mal Replacement Would do Little to Cut Costs
We all hear that health care spending is out of control and Georgia is looking for ways to reduce health care costs without sacrificing quality.
In the upcoming legislative session, lawmakers will consider the Patient Injury Act (Senate Bill 141), sponsored by Sen. Brandon Beach. Under the proposed law, a board, similar to the workers' compensation board, would replace the current tort system for people who are injured due to medical malpractice.
As a personal injury attorney who has represented victims of other people's negligence, I oppose SB 141. It is an untested idea, promoted by health care industry executives, to fix a problem that does not exist. I applaud lawmakers' efforts to make our health care system more effective and economical, but this law is misguided.
According to the consumer group Georgia Watch, such a system is unheard of in the US. As an article in the Daily Report pointed out, it is not even clear whether the board would be constitutional.
SB 141 is the brainchild of Patients for Fair Compensation, an organization of health care industry executives. They want to replace the medical malpractice tort system with an administrative board of professionals who would determine awards based on a payment schedule. They say such a system would improve medical care and lower costs by reducing the practice of "defensive medicine" (doctors ordering unnecessary tests and procedures to protect themselves from potential lawsuits).
However, there is little evidence that this practice is a large contributor to health care costs. While doctors self-report ordering unnecessary tests and procedures for "assurance," national surveys have estimated that such procedures only constitute 2.5 percent of all health care costs. (Mello MM, et al., "National Costs of the Medical Liability System," Health Affairs, September 2010 vol. 29 no. 9 1569-1577; Studdert DM, et al., "Defensive Medicine Among High-Risk Specialist Physicians in a Volatile Malpractice Environment," Journal of the American Medical Association, 2005; 293(21):2609-2617.)
Even if doctors do overuse certain procedures, the best solution is to practice evidence-based care, not to curtail an injured patient's right to compensation when harmed by medical negligence.
Setting aside the bogeyman of defensive medicine, medical malpractice reform would do little to reduce costs. Medical malpractice claims make up a tiny percentage of total health care costs in the United States. According to the Congressional Budget Office, malpractice costs account for less than 2 percent of health care spending. ("Limiting Tort Liability for Medical Malpractice." 1, 6 (Jan. 8, 2004).)
Of course, you say, as a trial lawyer, you have a vested interest in the tort system. While I believe that a jury of one's peers is the best way to compensate people for medical negligence, I am not the only person who thinks the Patient Injury Act is a bad idea. Many doctors also oppose it. The Medical Association of Georgia is opposed to SB 141 because they believe it would increase the number of claims against physicians, increasing costs and paperwork.
How can we lower health care costs in the United States without sacrificing quality? Administrative costs might be a good place to start. Some experts estimate that administrative costs account for close to one-third of health care spending. (Woolhandler S, et al., "Costs of health care administration in the United States and Canada," New England Journal of Medicine, 2003 Aug. 21; 349(8):768-75.) If health care executives want to get serious about reducing costs, they can start with reducing their own salaries, rather than cutting costs on the backs of injured patients.