Medical malpratice reform

Moderated by Rick Badie

Today’s issue: medical malpractice tort reform. Home Depot co-founder Bernie Marcus supports a compensation system that would take claims out of civil courts and wants the Legislature to adopt it. Meanwhile, William E. Silver, president of the Medical Association of Georgia, says such a system would prove even more costly to the health care profession.

Reform medical malpractice

By Bernie Marcus

President Barack Obama is scrambling to keep promises he made to Americans when he sold us the Affordable Care Act. But what happened to his pledge to reform the medical malpractice system?

Our current liability system drives costs far higher and denies compensation to patients harmed by doctors. It’s expensive and unfair, and the new law ignores the issue completely.

Reforming the way this nation compensates injured patients affects everyone. By not addressing the issue, Obamacare will cost Americans dearly — particularly doctors and patients — while protecting the profits of trial lawyers and malpractice insurers.

Today, doctors often order unnecessary medical tests, procedures or consultations to protect themselves from lawsuits. Defensive medicine accounts for $200 billion to $650 billion of the nation’s annual health care tab.

Cut this waste, and President Obama’s “cost curve” will bend considerably. Health care costs would drop. The Affordable Care Act would be far more affordable.

Instead, under Obamacare, doctors will be told not to order expensive tests and penalized for patients’ frequent care and hospital visits. And they will still be liable for outcomes.

The result: Doctors will refuse to see the sickest patients, leaving fewer doctors to take care of more patients.

Today, nearly 80 percent of injured patients have no legal recourse. According to an Emory University School of Law survey, most lawyers sniff at cases without a $500,000 potential award. The vast majority of medical malpractice cases never go forward. Without a lawyer on contingency, few patients can afford to pursue litigation.

According to Towers Watson, an actuarial firm, only 17 percent of the $8.75 billion in U.S. medical liability policies annually goes to harmed patients. Another 17 percent goes to trial lawyers. Insurance companies actually keep 65 percent; it’s the most profitable product they sell.

Today the Georgia and Florida legislatures are considering solutions for a new way — a patients compensation system (PCS). A mash-up of workers’ compensation and no-fault insurance, it would be run by a public-private board. Medical professionals would review claims, taking the process out of the civil courts, and issue awards predetermined by medical actuaries.

Without fear of malpractice lawsuits, fewer doctors would practice defensive medicine. There would be more claims, but awards would be smaller. Total payouts would dramatically decrease. Most importantly, 80 percent of the awards would go to patients, not lawyers or insurance companies.

Surprisingly, the medical associations of Georgia and Florida oppose this reform. Perhaps it’s because both have financial stakes in their states’ largest medical malpractice insurance companies. According to Oppenheim Research, 95 percent of Georgia physicians support the new proposal.

Today, all eyes are on Georgia. If our legislators pass long overdue medical malpractice reform, other states will follow suit. With Georgia’s leadership, national health care costs can be cut dramatically, and both doctors and patients will get real justice.

Bernie Marcus is co-founder and former chairman and CEO of Home Depot, founder of the Job Creators Alliance and founder and chairman of the Marcus Foundation.

No silver bullet solution

By William E. Silver

With three abstentions, the Medical Association of Georgia’s board of directors unanimously rejected the medical malpractice administrative tort system concept that was under consideration in the state when the General Assembly met in January of this year.

These physicians were asked to buy into a silver bullet solution that proponents say would “lower premiums and save tax dollars and pay injured patients quicker.” But having given both pro and con perspectives full and equal time and consideration, the leaders of the leading voice for the medical profession in Georgia concluded the “Patients’ Compensation Act” (S.B. 141) would simply represent a new tax on physicians and other health care providers.

The association determined S.B. 141 would increase the number of claims that are filed, increase costs for physicians and other health care providers, and repeal provisions of the tort reform bill (S.B. 3) that passed in Georgia in 2005, which has proven to be instrumental in creating a better medical practice environment.

A study conducted by Aon Risk Solutions for the Patients for Fair Compensation organization found that S.B. 141 would result in a 1,700 percent increase in claims for insignificant injuries like lacerations, bruises, minor scars and rashes. Aon also calculated costs would increase by 13 percent, while the professional services company Towers Watson estimated costs could grow between 35 percent and 105 percent.

Noteworthy, too, is that former Georgia Attorney General Michael Bowers called S.B. 141 unconstitutional. The Medical Association of Georgia — the largest physician advocacy organization in the state with more than 7,400 members — spent more than a year evaluating S.B. 141, which has no proven track record in the U.S. I simply don’t believe you’ll find a more credible group to weigh in on this issue than the association’s board of directors because it is comprised of physicians from across the state who care for patients in a wide range of medical specialties and practice settings.

I have the privilege of interacting with some of these individuals on a regular basis as association president. From Savannah to Columbus to Atlanta, this talented and caring group agrees we need to continue to look for ways to improve Georgia’s tort system so they can allocate more time to patients and in delivering the best medical care in the world.

Yet these same physicians – having heard both sides of the argument – are also convinced that S.B. 141 is an unsustainable and losing proposition. In fact, the adage “If it sounds too good to be true…” has never been more apropos.

William E. Silver is president of the Medical Association of Georgia.

One comment Add your comment

Lucious S. Lowe

December 4th, 2013
10:34 pm

Who is the driving force behind SB 141?

Rick Jackson. He’s the CEO of Jackson Healthcare, a hugely profitable and successful conglomerate of healthcare-related businesses, primarily focused on locum tenens (i.e. physician job placement for a fee).

Rick Jackson is puppeteering the “grassroots efforts” of Patients For a Healthy Georgia, Taxpayers For a Healthy Georgia, Patients for Fair Compensation, etc.

Rick Jackson is behind all the pomp and circumstance – from the good ol’ boys at McKenna Long, to Wayne Oliver, to the cast of hired guns he trots out at every opportunity to support his cause. A big financial investment on his part.

So why does Rick Jackson give a flying fig about compensation for injured patients?

Why does the man, who bought the largest and most ostentatious house in Georgia, care about keeping costs down in the very system he extracts massive profits from on a daily basis?

Why, you ask?

He gets to keep 20% of the revenues of the new system.

Under the proposed system, the PCS administrator keeps 20% right off the top. It’s a business, created literally overnight via legislative writ, that will grow each year at a rate no less than medical inflation. (Please read the bill. We can’t have this whole “we passed it before actually reading it” thing again – this one is too important)

Georgians, particularly those debating the bill’s merits in the state legislature, need to ask themselves what are the motivations behind this idea, and if they are truly well-intentioned.

Or is SB 141/PCS simply another brilliant healthcare investment that will reap massive profits at taxpayer and physician expense.