An idea to tackle tort reform, defensive medicine in Georgia

It’s been 20 months since the Georgia Supreme Court threw out a key plank of the state’s 2005 tort reform: a $350,000 cap on noneconomic damages for medical malpractice. During that time there’s been some hopeful talk among supporters of the cap, but precious little action by legislators.

Here’s a thought: Why not scrap the medical tort system entirely, saving several billion dollars in the process?

Before every trial lawyer within 200 miles heads for my office, let me explain.

The idea is to replace the current legal system for medical malpractice with an administrative law system that draws heavily on the current arrangement for workers compensation claims.

No more lawsuits, no more juries, no more jackpot justice. Instead, patients injured while undergoing medical treatment would file a no-fault claim. Independent experts then would determine whether there was negligence and, if so, award the patient compensation based on national norms for the type of injury suffered.

The potential results: More patients receiving payments, in a fraction of the time lawsuits take today. Doctors no longer facing the specter of ruinous lawsuits. Even trial lawyers would stand to make more money on the whole.

“Our approach is basically fair compensation — quickly, and more of it,” says Richard L. Jackson, who is pushing this plan through his advocacy group called, well, Patients for Fair Compensation.

The group’s name is straightforward enough, except that Jackson isn’t only or mostly a patient. He’s a longtime health-care executive whose Alpharetta-based medical-staffing company, Jackson Healthcare, employs doctors in all 50 states.

Nor did he come at the issue of tort reform only or mostly from a legal perspective. Rather, his interest is reducing the practice of “defensive medicine” by doctors eager to avoid lawsuits.

During the 2008 presidential primaries, Jackson told me by phone this week, his firm surveyed its doctors about various candidates’ health reform plans. “What happened,” he said, “was we kept hearing the defensive medicine issue being a huge problem. We didn’t ask them about it. It just came out unsolicited.”

Jackson took another survey of 3,000 doctors nationally about “totally unnecessary medicine for the purpose of avoiding a lawsuit.” A whopping 92 percent said they had practiced it in the previous 12 months, and the respondents attributed 34 percent of all health-care costs to defensive medicine.

“I was really caught off-guard by that,” Jackson said.

Last year, he hired Gallup to poll 500 doctors. A similar proportion of them said they practiced defensive medicine, to which they attributed 26 percent of health costs.

Even using that lower estimate, Jackson said, defensive medicine may account for as much as $650 billion in health spending nationally and $13.25 billion in Georgia. That’s roughly $100 a month for every American, or almost 4.5 percent of the U.S. gross domestic product.

Reducing that cost is what sparked Jackson’s interest in medical malpractice reform. But he believes it would be good for patients, too.

“Patients really don’t have access to justice in our [current] system,” Jackson said. If a claim is for less than $150,000, “you can’t find an attorney to represent you. They have to basically go for the big deals. And that’s why they’re so vehemently opposed to caps and those kinds of tort reforms, because it eliminates the ability to go after the big claims so they can fund the other ones.”

Jackson’s group is awaiting a final actuarial study, but he said he is confident that four times as many patients as today will receive some sort of compensation, which, combined, will total two to three times the current sum.

The “extra” money, as well as the funds to operate the new system, would come from existing med-mal insurance premiums, with savings from lowering costs of administration and not having to defend against lawsuits.

The next step will come soon, as Georgia and Florida are the first states where Jackson will try to get legislation passed. I’ll withhold final judgment until there’s an actual bill with actual details. For now, it’s a promising solution to a vexing problem.

– By Kyle Wingfield

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79 comments Add your comment

Ayn Rant

December 1st, 2011
6:00 am

Why not make it even simpler, by cutting out the lawyers and the malpractice insurers? Require arbitration of malpractice claims, as a condition of health care coverage. The American “tort” system has been broken for years; it operates for the benefit of lawyers not claimants. Why not settle malpractice claims by a small panel of experts and intelligent laymen, rather than wait 5 years for an incompetent jury to decide medical issues from conflicting “expert” testimony, with half the award going to lawyers?

Take one further step: cut out health insurance companies by instituting a “public option” like Medicare. Then the American medical establishment could provide real patient-care instead of lawyer/insurance company care. Who needs private health insurers that provide no medical care whatsoever, but skim off 10-15% of the premiums to do what Medicare does for 5%?

DeborahinAthens

December 1st, 2011
6:33 am

The specious class action lawsuits in all industries suck massive amounts of money from the bottom line. Judges should refuse to hear some of these ridiculous cases. Most companies just settle because they’re fearful about going to court, so these slimy lawyers sue for everything hoping to get a settlement. Our system is broken.

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

December 1st, 2011
7:32 am

I don’t think you’ll have to worry about tort reform after obozo wipes out the entire US economy.

We need to open preliminary discussions on the bartering system that will soon be in place, with the US Dollar being worthless, if a doctor a-m-p-ut-a-t-e-s your foot because of frostbite, how many potatoes will you owe him? And if he botches the operation, how many potatoes will he owe you?

Even better, will be able to shoot the attorney?

Road Scholar

December 1st, 2011
7:37 am

So what happens to a doctor that is found to be guilty of malpractice under your proposed plan? How many hearings where a particular doctor is found guilty does it take to take further action against the doctor?

Streetracer

December 1st, 2011
8:00 am

DeborahinAthens @ 6:33

Yes, the system is broken. In fact, I would argue that it is irretriveably broken. Even in criminal cases, it is frequently less onerous to plead guilty then to defend oneself, even when innocent.

More to the point, my doctor claims that the biggest cost to his practice is defensive medicine. That is the cost of performing unneccesary tests and/or procedures (and the cost of the attendent equipment etc.) to defend himself in case of a malpractice claim. That, it seems to me, is just plain WRONG.

ByteMe

December 1st, 2011
8:00 am

Kyle, it needs to be two steps, not one. Yes, the panel of experts to determine if the doctor failed to provide the proper medical actions. Once that’s established, that “stipulated fact” can be taken to any judge or jury to determine penalties and awards based on community standards for “pain and suffering”, “economic loss”, etc. I’d rather have a panel of doctors determine if something was malpractice, but having them determine the economic cost to a claimant is beyond the scope of their expertise and will waste their time on sad stories instead of the facts of the doctor’s actions and results.

So who picks the doctors on this panel? I’d rather it NOT be politicians looking for a certain outcome.

Stevie Ray

December 1st, 2011
8:08 am

KYLE,

For better or worse, I’m in the insurance brokerage business. Bear in mind that the WC system was originally designed as a no-fault process without need for lawyers. Unfortunately, we now have cottage industry of lawyers completely focused on alleging insurer bad faith in efforts to force settlements or otherwise coach claimants how to maximize recovery….meager as these are…Fact is that many, if not most of the WC claimants have legitimate injuries and the wage replacement is only attractive to those earning at or just below poverty level. For the others, the attraction is lifetime medical..

I like your idea……the driving issues behind medical malpractice claims are twofold: First, our culture is such that patients do not want to assume responsibility for anything least not the risks of any medical procedure where the risks are clearly spelled out. Second, the majority of claims are not due to true malpractice (say sponge left in body cavity) but in response to physicians who talk down to patients. In underwriting med mal, a video tape of a physicians typical bedside manner is worth much more that claims history, credentials, and specialty…

independent thinker

December 1st, 2011
8:11 am

as an attorney I support your plan- well written

Tommy Maddox

December 1st, 2011
8:13 am

There is no “jackpot justice” when you’ve been turned into a quadriplegic via doctor who came straight from a local bar to the operating theater.

Streetracer

December 1st, 2011
8:15 am

ByteMe @ 8:00:

Why do you think that a jury could better assess economic costs than any other party? Juries are natoriously capricious about economic awards.

Tommy Maddox

December 1st, 2011
8:21 am

ByteMe: “I’d rather have a panel of doctors determine if something was malpractice”. There’s the key:

In order to file and proceed with a med/mal case in Georgia, you have to file with the Complaint and expert affidavit from a doctor in a similar line of work as the Defendant doctor. The affidavit is based upon either a review of the medical records [or if you're lucky] a subsequent treating physician. The affidavit MUST lay out the areas in which the defendant doctor deviated from the applicable standard of care. That opens up the premise that the Defendant Doc did something wrong.

If the Plaintiff can’t produce an Expert Affidavit, then he has no case.

If

Jake

December 1st, 2011
8:51 am

The proposed plan is near fraud from the get go: it says it is “no fault” and then requires that there must be a finding of negligence (i.e. “fault”) on the part of the doctor. This is a far cry from a Worker’s Comp system.
Also, as pointed out by Tommy Maddox, in the current system, an expert affidavit is required to even file a lawsuit (the affidavit must lay out exactly what negligent act was done), AND, under every med-mal insurance policy out there, the insurance company can’t settle the claim without the doctor’s consent. Are you also going to rewrite everyone of those insurance policies? I’ll save my insights on why the proposed cap are not only unconstitutional but proven not to be effective for later.

ByteMe

December 1st, 2011
8:57 am

Streetracer: Why do you think that a jury could better assess economic costs than any other party?

Let the “jury” of doctors determine if the doctor failed in his/her responsibilities. Let a jury of peers of the claimant determine the cost of that failure. It’s a simple “who’s closest to the problem” solution. Also, you can bet that once the “stipulated fact” is determined, the insurance company will try to settle faster when compared to the uncertainty of a jury. That helps move the system along as well.

As for juries being notoriously capricious: I agree. But that’s the system we have for determining guilt/innocence, so why are they better for that then for determining awards? Why have any faith in them for one task and not another? Unless, of course, you don’t.

And, really, the key to me is that the panel of doctors is created independent of politicians, so that outcomes are not pre-determined based on ideology.

carlosgvv

December 1st, 2011
9:01 am

Since the Georgia Supreme Court is made up of lawyers, they will do what makes the most money for the Legal profession. If this administraive law system will result in more money for the trial lawyers, the Court will approve it. If not, they won’t. Needless to say, the welfare of the people will have a zero effect in their deliberations.

ByteMe

December 1st, 2011
9:02 am

Are you also going to rewrite everyone of those insurance policies?

Insurance policies are always adjusted at renewal to bring them into compliance with new state laws (and new pricing). You just need a lead time of a few months to make it work.

HCRA required that insurance companies remove the “feature” in policies that there was a lifetime maximum. Within 4 months of HCRA passing, insurance companies were removing that clause from their policies and even adjusting existing policies without an increase in cost.

man behind the curtain

December 1st, 2011
9:08 am

I report(you whine) etc: Bla bla bla obozo bla bla bla

(yawn)

Jake

December 1st, 2011
9:11 am

ByteMe: Left off my original post was question that if policies are re-written to allow insurance companies to settled med-mal claims without Dr’s consent, would the Drs go along with it? Right now, they can hold up a settlement and force a trial (often with good reason). But would they go for a system overhaul where there insurance company can agree to pay a claim that says “Dr. X committed malpractice” with Dr. X having no say so in it?

Kyle Wingfield

December 1st, 2011
9:16 am

Road @ 7:37: Dunno. And, just to be clear, it’s a plan I’m writing about, not designing myself. My guess is that the repercussions would be similar to the ones today.

Also, not mentioned in the OP: Cases of gross negligence — e.g., your surgeon is drunk in the OR — would still be handled by the current legal system.

Kyle Wingfield

December 1st, 2011
9:23 am

ByteMe @ 8:00: The doctors wouldn’t decide the award amounts; I may not have made that clear in the OP, but I was trying to avoid getting too caught up in the weeds. There would be full-time staff who award compensation based on national norms for the amounts associated with specific injuries. Those norms would include economic and non-economic damages. (The staff, btw, would be paid from malpractice insurance premiums, not taxpayer funds. The estimated annual cost of running the not-for-profit system in Georgia is $12 million.)

As for who picks: The plan calls for the governor, speaker of the House and Senate pro tem — here, given the power struggle in the Senate last year, we can foresee its first potential political problem — to appoint members of a board, similar to existing state boards, which would in turn hire management, who would in turn hire the (part-time) folks who would review the cases. NB: Don’t get too caught up in these details — a) because there’s always the chance I’ve missed some nuance here or there, and b) because there’s no bill yet, and thus no real details.

Kyle Wingfield

December 1st, 2011
9:25 am

Tommy Maddox @ 8:13: Yes, but that’s hardly the typical med-mal case. Also, see my 9:16 — cases of gross negligence, such as the kind you mention, would still go through the existing tort system.

saywhat?

December 1st, 2011
9:28 am

On the surface it looks like a reasonable idea, but the devil would be in the details, just like the current system we have. Loss of coverage for doctors with frequent claims against them would have to be considered.Payment for loss of quality of life would have to be considered in settlements. As mentioned by others, appointment of the panels could be very tricky if politicized or rigged to benefit medical providers vs patients or vice versa. I’m sure there are many other hidden benefits to this proposal, but also many other as yet unrevealed downsides as well.

Streetracer

December 1st, 2011
9:35 am

ByteMe @ 8:57

I agree with most of what you say. However, having served on more than a couple of juries in my time, emotion more than facts sways juries. So I would suggest a panal of “experts” (however one wants to define that) to assess awards

MarkV

December 1st, 2011
9:36 am

Good idea to explore further.

Lil' Barry Bailout (Revised Downward)

December 1st, 2011
9:49 am

Ayn Rant: Who needs private health insurers blah blah
——-

Free people who make their own decisions rather than relying on government bureaucracies.

the red herring

December 1st, 2011
9:51 am

kyle–why was the cap thrown out? is there no way to fix that problem so that it will pass muster with the supreme court. also to restrict the percentage amount the attorney can take from the case?
perhaps the law could be written that jury awards (non economic) in excess of 350k would be automatically reviewed by a panel such as you describe which would have the authority to adjust the award based on the projections of a persons future earnings, etc..

Kyle Wingfield

December 1st, 2011
9:54 am

red herring @ 9:51: Sure, we could pass a constitutional amendment. But I don’t know how likely that is, given that — going off memory here — the original tort reform passed by one vote in 2005 (in any case, it was narrow — not two-thirds).

Jefferson

December 1st, 2011
10:05 am

You always go the wrong way, one day you will see they are not your friends.

UGA 1999

December 1st, 2011
10:08 am

Did any of you hear that recording of the woman on the radio this morning. She has 16 kids and she was saying…..”I need some help, I need somone to take responsiblity for these kids….who is going to be accountable?”

Who do you think she voted for? HAHAHA

Rafe Hollister

December 1st, 2011
10:09 am

Excellent starting point Kyle, however it would be vehemently oppossed by the trial lawyers and their partners in crime, the Democrats. I’m doubtful that responsible citizens could overcome this combined opposition and get this passed.

Dave

December 1st, 2011
10:20 am

Maybe I’m missing something; but, what about changing the people deciding from a judge or a jury to an expert panel is going to end defensive medicine unless there is an agreed standard of proper care enacted into law at the same time. A doctor caring for a patient is still faced with a third party’s review of what was/wasn’t done; so, where is the incentive to “do less?”

ByteMe

December 1st, 2011
10:34 am

Dave @ 10:20, you are absolutely correct, which is why most “tort reform” is nothing more than a wet kiss to insurance companies and doctors at the expense of the people who get hurt by bad doctors.

Why are C-sections performed 36% of the time in Mississippi, but only 26% of the time in Arizona? (figures for 2007)

And that was also included as part of HCRA: coming up with standards for care that Medicare would pay for, which would then drive those standards across the nation, lowering the unnecessary variability of care.

And Kyle @ 9:23: leaving it to the politicians to appoint the full board is a just a terrible idea and cronyism. Better to leave it to the local AMA to first provide a list of candidates based on experience, availability, competencies… and then have the politicians choose from the list. As for the “staff” determining the award, I think that’s where it’ll fail constitutionally the same as award limits did. The constitution is pretty clear that awards can be determined by jury if that’s what the claimant requests. That’s why I think my recommendation — that the doctors determine a “stipulated fact” concerning the correctness of the claim and that’s all they do — is the most reasonable way to get where we know it needs to go.

killerj

December 1st, 2011
10:35 am

Anyone who suggests that big brother steps in to solve the problem is the problem,arbitration is very simple and cost effective,but if you can,t read between the line that money is the bottom line then who,s the fool?

Bryan G.

December 1st, 2011
10:45 am

You guys understand that (a) doctors do commit malpractice sometimes and (b) the damages are often way more than $350,000? Right?

The biggest myth in the world is the “frivolous lawsuit.” As an insurance defense attorney, I rarely, RARELY see them. Maybe less than 1% of the time. Tort reform is merely a way to protect insurance companies and doctors from viable claims – not frivolous ones.

Uncle Billy

December 1st, 2011
10:45 am

There is medical malpractice and patients are injured, sometimes even killed, by it. They are entitled to some compensation for it, but the current system is not adequate to the task. It rewards some people outlandishly while most injured patients get nothing at all. Most never file a suit.

There is a fine article from The New Yorker about this whole problem. You can get it at: http://www.newyorker.com/archive/2005/11/14/051114fa_fact_gawande?currentPage=all

Kyle Wingfield

December 1st, 2011
10:56 am

Dave @ 10:20: Doctors wouldn’t face the prospect of a lawsuit that could a) take 3-4 years and b) potentially take everything they have. This plan basically ends the possibility of mega-judgments (except, as noted before, in cases of gross negligence, which would still go through the courts). So, there would be less incentive to order every test possible just for legal/CYA purposes.

Jackson5

December 1st, 2011
10:56 am

““Patients really don’t have access to justice in our [current] system,” Jackson said. If a claim is for less than $150,000, “you can’t find an attorney to represent you.” You can if YOU pay the attorney instead of having him take the case on contingency.

We need ‘loser pays’, with LOSER’S ATTORNEY (individually and the firm as a whole) liable IF the Plaintiff’s attorney’s compensation is in any way based on the outcome of the case.

This assumes the insurance company’s attorney will not ever be working on contingency.

The ‘contingency attorney’ will get a percentage of damages plus his fees and costs IF HE WINS, but he is liable for the other side’s costs if he loses. That way only cases with a realistic chance of success will be filed, and cases for relatively low damages will be accepted because the attorney’s fees won’t be limited to a percentage of damages.

Caps on damage awards are totally wrong. Damages should be based on the concept of “how much would you need to be paid to go through what the plaitiff went through?”

Dirty Dawg

December 1st, 2011
10:59 am

I’ve always found it ironic that folks blame the high cost of medical malpractice insurance for the high cost of medical care…ironic since some of, if not all of, the largest medical malpractice insurance underwriters are consortiums of doctors. So who’s making what money and for what services?

Was this a great country, or what?

Kyle Wingfield

December 1st, 2011
11:00 am

ByteMe: I don’t know that the plan precludes the idea of an AMA-approved list — although I’d note that the AMA lost a lot of credibility with a lot of doctors after its role in the Obamacare debate. (Fwiw, this plan would work whether Obamacare is upheld or thrown out.) There would, in any case, be stipulations about the make-up of the board so that various groups — doctors, nurses, hospitals, employers, insurers, patients, etc. — are represented.

I can’t say for certain, but I don’t think the constitutional question would come up. You’d be entering a different system, and would be agreeing to abide by its terms as a condition of receiving care. I don’t know that there’s a right to a jury award if the finding of fact takes place outside the legal system.

But, certainly, the law will have to be drafted with that in mind.

UGA 1999

December 1st, 2011
11:00 am

Dirty Dawg….This IS a great country.

Kyle Wingfield

December 1st, 2011
11:01 am

Uncle Billy @ 10:45: This plan attempts to rectify the problem you outline.

Kyle Wingfield

December 1st, 2011
11:05 am

Dirty Dawg @ 10:59: Fwiw, Jackson told me his company stood to lose money on this deal because it makes money off med-mal insurance, but that he supported it because it is the right thing to do. I’m typically suspicious about claims like that, but until someone or something proves otherwise, I’ll take him at his word.

Whether other folks in the medical industry would be so altruistic remains to be seen. Also fwiw, he told me that med-mal insurers in Georgia averaged a 45% profit margin over the last five years, but lost money on average during the five years before that.

Marqwashineeke

December 1st, 2011
11:11 am

“Independent experts then would determine…”

Independent? Right. There’s no such thing. Every member of every board, tribunal, forum etc. brings his own agenda to the table. Look at the U.S. Supreme Court. This is another one of your terrible ideas Kyle.

Bryan G.

December 1st, 2011
11:14 am

Kyle -

What’s wrong with “mega-judgments?” If someone suffered dismemberment or even death, what’s wrong with a 5 or $10M verdict if that’s what it takes to compensate for the loss?

For example, while the permanent disfigurement of someone who works at a fast food place may only be worth 750K to $1M, the disfigurement by medical malpractice of Lebron James would be worth hundreds of millions.

Let juries decide. It’s ironic to me that the people who think that juries can’t decide damages in a case are the same people that think juries are competent to put people to death in the criminal system.

@@

December 1st, 2011
11:22 am

More patients receiving payments, in a fraction of the time lawsuits take today.

With ^^^ that, I can agree. The longer it takes, the more money lawyers stand to receive. 54% of compensation, last I checked. No one draws it out longer than the federal government…what with their sovereign immunity and all.

Generally, any person aggrieved by an agency policy or decision can challenge it. However, he or she must first make full use of any review provided by the agency, and agencies can wear down complainants
with multiple levels of internal appeal. The complainant, if still dissatisfied , can then take the agency to court. However, the only relief available is usually limited to the agency’s doing what it
should have done in the first place. Any injury not rectified by this goes uncompensated. For example, although the wrongful denial of health benefits often has grave and irremediable health consequences, compensation is generally unavailable for that harm when government denies coverage. When even a meritorious claim cannot yield damages, an aggrieved individual must often do without legal counsel, who are typically paid out of damages. Without counsel,
complainants are unlikely to be successful.
Moreover, courts are required to defer to agency expertise and correct only egregious errors—one common standard is that agency action will be overturned only if it lacks any “rational basis.” If a statute gives an administrative agency broad interpretive powers, it
is very difficult to challenge its interpretation or even predict what a statute will be deemed to require.

http://content.healthaffairs.org/content/19/6/152.full.pdf+html

Does Obamacare deal with those issues?

Only time I ever suffered at the hands of a doctor (DDS), I suffered emotional distress at the mere thought of a dental visit. No problem…nitrous oxide is relatively cheap.

Uncle Billy

December 1st, 2011
11:29 am

Another reform which might help is for the medical licensing board to more aggressive about disciplining physicians who repeatedly injure patients.

Billings

December 1st, 2011
11:35 am

Talk about pain and suffering.

Weekly Jobless Claims Jump Back Over 400,000 Mark

With Europe on the brink, it will be a double-dip recession. Adjust to the reality.

Tommy Maddox

December 1st, 2011
11:38 am

Bryan G. is absolutely correct.

Absurdity

December 1st, 2011
11:44 am

This is absurd. Why has the big business wing of the GOP taken this up as its cause du jour? Here is a little food for thought on this issue: nationwide, in states instituting tort reform measures (including Georgia) malpractice claims dropped; however, there has been no similar drop in the insurance rates paid for malpractice insurance by doctors. Effectively, large insurance companies have pushed tort reform through legislatures and insulated themselves from verdicts while still insisting on keeping massive insurance premium bills which are not in sync with their exposure. The other issue is this: why do doctor’s deserve a special place of insulation for their negligence? If a lawyer, engineer, architect, electrician, plummer, or other professional fails to abide by the standard of care and causes you harm, then you have a right to sue them. What makes doctors so special? The answer is that they have the drumbeat of major insurance carriers behind them engaging in rampant fear mongering about the state of the American tort system and how medicine is dead in America if we don’t stop holding doctors accountable for their negligent acts.

Tommy Maddox

December 1st, 2011
11:49 am

Jackson 5, defense counsel is paid on the hour by the carrier.

yuzeyurbrane

December 1st, 2011
11:53 am

The number of tests would be reduced more by eliminating the economic incentive to order them by going to a results oriented insurance system rather than paying the docs per procedure. How do you and Jackson Healthcare stand on that issue since it is part of Obamacare? Also, Kyle, if you talk to some lawyers who are knowledgeable about current WC system, I don’t think you would want to hold it up as a successful example of anything except being tilted towards employers.