Trial Lawyers and Insurance Cos are True Beneficiaries of Medical System

By Hal Scherz

Dr. Jeff English the Docs4Patient Care, Georgia Chapter President and the Director of Clinical Research at the MS Center of Atlanta and I have seen looming problems with the implementation of ObamaCare. Like all practicing physicians we know that it is time to get serious about medical liability reform. Two years after the passage of the Affordable Care Act, it is now clear the law fails to control healthcare costs – the very reason advocates called for its passage. In fact, costs have accelerated faster under Obamacare than if Congress never took up health reform.

Part of the reason is that the ACA never addressed the two major drivers of healthcare spending- the disconnect between patients and the true costs of the care which they receive; and medical liability.

A common strategy physicians employ to avoid malpractice suits is to practice defensive medicine, something that adds between $200 to $650 billion annually to the nation’s healthcare price tag. Defensive medicine occurs when doctors order unnecessary tests or procedures to avoid being sued.

This is a cancer on the healthcare system and unless it is aggressively managed, healthcare costs will never be contained.

The question is not so much how we can discourage litigation, as it is why has it not been seriously addressed already. The answer to this question simply requires connecting the dots. Consider:

·         Of the $8.75 billion in medical liability policies written in the U.S. annually, 31 percent is pure profit to the insurance companies.

·         Forty percent of awards go to attorneys – for defense and litigation costs.

·         Only 17 percent goes to patients who have been harmed.

·         Worse yet, more than 80 percent of patients who have been injured while receiving medical care never receive any compensation at all.

There are tremendous incentives not to upset the applecart so that insurance companies and trial lawyers continue to earn obscene amounts of money under the status quo.

Some states have made progress in combating these special interests but the battles have not been easy and are never over, as in Georgia where the state’s Supreme Court recently overturned caps on pain and suffering – the heart of civil justice reform adopted in 2005.

California, Texas and Mississippi have also passed laws restricting malpractice damages and make it more difficult to file frivolous lawsuits. But the laws are not strong enough to correct what triggers behaviors that escalate healthcare costs – the practice of defensive medicine.

Part of the reason why defensive medicine continues to remain a problem, even in states that have addressed medical liability reform, is because physicians are still at substantial risk for liability and have personal financial exposure. The answer lies not in putting caps on awards or creating punitive measures against frivolous cases but instead on revamping the medical liability system entirely.

Presently, medical liability cases are civil matters heard in state courts. They often take years and keep a doctor or patient in limbo with an uncertain outcome. It is absurd to believe that a fair or reasonable outcome can occur in such a setting. A jury is largely incapable of realistically being able to process highly technical “evidence” presented to them by lawyers and their medical “experts.”

This process is unfair to physicians who are entitled to a trial by a jury of their peers but never receive this in the current court system. It is also unfair to patients who may not receive just compensation in such a system.

If instead, medical injury cases were heard by specialty panels with experts overseeing the process, there would be a higher likelihood of fair outcomes. A no- fault system similar to our workman’s compensation system would open up protection and compensation to all patients, not just those with large claims or heart-wrenching stories. Such a system – currently being considered by Florida and Georgia lawmakers -- would allow for fairer outcomes for physicians who would feel protected from frivolous claims, as well as for patients.

The result would be a huge change in how doctors practice medicine – and a curtailment of the practice of defensive medicine. This would save our healthcare system $650 billion annually including $125 billion in Medicare and $96 billion in Medicaid costs.

Ultimately, all patients pay for our dysfunctional medical liability system -- whether because of unnecessary medical testing and procedures due to defensive medical practices, or through higher taxes or insurance premiums. If health reform was based on the premise of making healthcare more affordable, then it’s time to take steps to truly shake up our medical liability system to do just that.

Hal C. Scherz, MD is the Founder and President of Docs 4 Patient Care, VP of Georgia Urology, and Associate Clinical Professor Urology- Emory University.

Jeffrey B. English, MD is the Docs 4 Patient Care, Georgia Chapter President and the Director of Clinical Research at the MS Center of Atlanta 

http://townhall.com/columnists/halscherz/2012/04/24/trail_lawyers_and_insurance_cos_are_true_beneficiaries_of_medical_system/page/2

(used with permission)