Pair say new medical system could save $16 billion annually

Jan 17, 2013

The following article was published in The Florida Current on January 17, 2013:

Pair say new medical system could save $16 billion annually

By James Call

When Florida lawmakers arrived in Tallahassee for this week of committee meetings they were followed by two health care executives who say they have an idea to make a “real change” in the cost of health care. It’s one that could save Florida $16 billion annually, they say.  

“We have to deal with the issue of defensive medicine,” said Charles Evans, president of International Health Services Group.  “That is the core issue. Our spending levels are out of control, have been for years.”

The defense in medicine is not to protect the patient from illness, he and Richard Jackson contend, but the physician from lawsuits.

“We’re the only country in the world where the physician has personal financial liability,” said Jackson, chairman of Patients for Fair Compensation, an Atlanta-based advocacy group.

Jackson and Evans said they met with more than 20 lawmakers this week to brief them on their proposal for a “patients’ compensation system” — a no-fault approach patterned after the workers’ compensation system.  A similar bill was sponsored last year by Sen. Alan Hays, R-Umatilla, but failed to gain any traction.

Evans and Jackson are back again this year with actuarial studies that indicate a PCS would save Florida $1.5 billion in the first year and up to $16 billion annually after five years. They expect a bill will be filed for the legislative session that begins March 5.  

A variety of studies, from organizations such as Gallup and Bio-Science Valuation, estimate that 26 to 32 percent of health care costs are produced by defensive medicine practices, that is, tests and procedures to protect the doctor in the case a diagnosis is wrong and the patient files a lawsuit alleging improper care.

A PCS tries to remove incentives to practice defensive medicine by no longer holding the physician financially responsible for pain and suffering when a diagnosis is incorrect and causes harm. Jackson said he is proposing a system similar to the one found in Sweden. There, when a patient is medically harmed they can file a claim for review by a panel of experts. If that panel deemed the injury was avoidable, the claim is forwarded to a compensation department to recommend appropriate compensation. The standard used to determine an award is “avoidable harm” instead of malpractice — the failure to follow generally accepted professional procedures.

“It’s an illusion that you have access to sue anyone,” said Jackson of the current system. “Eighty percent of people that deserve compensation don’t have access to the courts. In Florida we surveyed plaintiff lawyers and they won’t take a case unless it’s $600,000 in potential damages.”

A desire to control health care costs have produced a variety of theories and recommendations. Last week’s health care affordability conference sponsored by Associated Industries of Florida Foundation focused on eliminating waste, providing more choice and improving the value of care as a way to drive down costs.

However, University of Pennsylvania law professor Tom Baker wrote in the Medical Malpractice Myth that the notion that fear of malpractice suits drives up the cost of health care is “urban legend mixed with the occasional true story, supported by selective references to academic studies.”

Although Baker said unreasonable large jury verdicts aren’t the cause of high liability premiums,  malpractice is. He cites a Harvard University study that shows 97 percent of medical malpractice claims were meritorious, though victims won compensation in barely half the cases filed.

Evans and Jackson acknowledge it will take time to persuade lawmakers and Floridians to trade a patient’s right to sue for pain and suffering for a system where an independent panel awards compensation. Maybe as long as five years.

They promised there will be an announcement when they find a sponsor.

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