Let’s Get Serious About Healthcare Costs

We are all concerned about the ever escalating healthcare costs. Employers struggle whether to offer health insurance benefits because premiums continue to rise at an alarming rate.

Employees and patients who do have insurance must endure higher, premiums, higher co-pays and coinsurance. With healthcare costs are out of control, we must consider something totally transformational.

One primary driver of rising healthcare costs is due to the way physicians practice medicine these days. Physicians order unnecessary tests, procedures and prescription drugs simply to protect themselves from being sued. This practice is known as “defensive medicine.”

And, according to Oppenheim Research, defensive medicine costs Georgians more than $14 billion each year. Eighty-two percent of the Georgia doctors polled by Oppenheimer said they practice defensive medicine.

Solutions vary. Traditional tort reform measures like caps on “pain and suffering” damages help to stabilize the medical liability insurance market. But physicians still practice defensive medicine by ordering expensive ultrasounds, CT scans, x-rays, MRIs, and dangerous medications that aren’t medically necessary.
These tests not only waste a patient’s time but cost a lot of money – sometimes tens of thousands of dollars. And patients are often exposed to radiation and other treatment options they don’t need just to give the doctor peace of mind.

A recent Gallup poll found that one-in-four healthcare dollars nationwide is spent on unnecessary tests, procedures and prescriptions.

To get to a system where physicians no longer feel the need to practice defensive medicine, there must be a serious commitment to a complete transformation of the current litigation system. And, there is a group — Patients for Fair Compensation — which has been formed to advocate for such a transformation.

By moving to a different system of health justice – one which replaces the medical tort system with one that resembles a workers’ compensation system, we reduce healthcare costs, eliminate bogus lawsuits, reduce medical errors, reduce legal costs, and improve healthcare.

Dr. Jeff Segal, founder and CEO of Medical Justice Services, and a member of the Center for Health Transformation, recently published an article entitled “Doctors on defense as health costs soar” in the Atlanta Business Chronicle which discusses the need for transformation.

Dr. Segal said, “Instead of trying to tweak the medical tort system, we propose establishing a Patients’ Compensation System mirroring the state Workers’ Compensation Board. It would create a predictable model where patients know their cases would be heard. Doctors would know they wouldn’t be hauled into court. The system would accommodate more patients who are legitimately injured. They would receive quick, predictable settlements. Doctors would learn about medical errors. The cause of patient safety would be advanced.”

Sounds simple, right? Well, as Coach Lee Corso of ESPN ‘Game Day’ fame would say, “Not so fast.”

No one likes change and the impact will be dramatic. Since it is a no fault system, virtually every medical error will be disclosed so process and system improvements will be made just like in the airline industry. Physicians will no longer feel compelled to order senseless test which offer no diagnostic or therapeutic value. Furthermore, since doctors will be focusing on the patient as a patient and not a plaintiff, we can begin to restore the physician-patient relationship which might also lead to better patient outcomes.

As for personal injury lawyers, they will remain very well-paid individuals as they will have an even greater pool of clients to enter the Patients’ Compensation System. Today, very few patients who are harmed ever see an attorney nor get an attorney to take their case – let alone make it to court.

Since the Georgia Supreme Court threw out the centerpiece of the state’s 2005 tort reform effort, this is an effort worth exploring. It could be transformational for patients and doctors and for bringing down healthcare costs. It could also be transformational for Georgia as we could create the first new system to deal with a huge problem. The time is right for bold, transformational solutions.

6 comments Add your comment

Kenneth Pylant

February 3rd, 2012
2:43 pm

I wonder if the definition of unnecessary test/ultrasound/etc are those whose results are as hoped for as opposed to results that might have been feared. IF defensive medicine means promoting early detection and defending my health against delayed diagnosis, I have to admit to being in favor ot that. Of course, a single payer system aking to that in Canada would cut our total health care by some 30% in pure administrative costs. That assumes that American government could master the clerical requirements as well as the Canadians.

Max Mendel

February 5th, 2012
10:12 am

When the consequences of misreading test results increase because of potentially being sued, the radiologist’s cost of doing tests like CT and MRI are higher. Most people would expect doctors to perform fewer tests if their costs are higher. If what you are proposing is true, then Newt Gingrich and the Center for Health Transformation should advocate taxes on EHR solutions to encourage their adoption. Maybe doctors just need a Xanax…?

Wayne Oliver - vice president, Center for Health Transformation

February 9th, 2012
10:58 am

Kenneth, the results of the Gallup Poll of physicians were very revealing: Physicians order unnecessary tests not for the purposes of ruling out a diagnosis or condition … they order unnecessary tests to protect themselves from meritless, frivilous lawsuits. Plain and simple.

In terms of our healthcare system vs. the Canadian system, I would prefer that medical decisions are made between me and my physician (or other appropriater healthcare professional) rather than established by some national board of bureaucrats. Thanks for posting you comments!

David Mason

February 9th, 2012
3:02 pm

Wayne, this is well put and the comments reveal little knowledge of the US healthcare situation. Of course as noted there are other drivers, while single source systems run by the government, e.g. the VA, are not necessarily cheaper or more efficient. Tort reform must be part of any overall of the system, or test costs will continue to rise. I am not hopeful of this being achieved since the plaintiffs bar essentially runs Congress and most State legislatures, and they have no incentive for such reform, your observations aside.

[...] best practices. I have written in this space about creating a new system of health justice (“Let’s Get Serious About Healthcare Costs,” February 3, 2012) … one that creates a new model for compensating legitimate medical errors. [...]

[...] best practices. I have written in this space about creating a new system of health justice (“Let’s Get Serious About Healthcare Costs,” February 3, 2012) … one that creates a new model for compensating legitimate medical errors. [...]