Finally: An End to Malpractice Litigation?

Originally published in Medscape: March 05, 2015 (reprinted with permission)  http://www.medscape.com/viewarticle/840337

A Sensible Alternative to Our Broken System?

As every physician knows, our tort system is broken. Various solutions have been suggested over the years, only to fade away. But now, a promising new system for patient compensation in cases of medical error is being proposed in two states: Georgia and Florida. It makes sense for doctors and patients alike, and for our healthcare system as a whole.

The bills would, if passed, transform the current medical tort system into an administrative system for redress. Georgia’s—the Patient Compensation Act in Georgia, SB 86^[1]—opens with the following game-changing text:

“Effective January 1, 2016, the cause of action under Georgia law for medical malpractice against a provider as defined in Code Section 51-13-2 is hereby repealed in its entirety.”^[2]

A patient who is injured would seek a potential remedy via the Patient Compensation Act, which calls for the establishment of a “Patients’ Compensation System.”

That patient, via a patient advocate, would appeal to the system to investigate his or her injury.^[3] The full record would be reviewed by a rotating collection of medical experts in the relevant field. If this panel agreed that the injury was avoidable, the case would be referred to a compensation committee to make payment.

To qualify for compensation, the panel would, in the Georgia law’s verbiage, use the following criteria:

“Medical injury” means a personal injury or wrongful death due to medical treatment, including a missed diagnosis, where all of the following criteria exist: The provider performed a medical treatment on the applicant; The applicant suffered a medical injury with damages; The medical treatment was the proximate cause of the damages; and Based on the facts at the time of medical treatment, one or more of the following: An accepted method of medical services was not used for treatment; An accepted method of medical services was used for treatment, but executed in a substandard fashion.[2]

The patient would not need a lawyer to propel his or her case forward; however, if desired, a lawyer could help the patient ensure that due process was followed.

The total pool of funds available for making payments would be less than the aggregate amount of funds doctors paid in professional liability premiums before enactment of the law. In other words, the system would not pay out more in the future than is currently being paid in by physicians. This term would keep costs stable for doctors—by statute—regardless of the number of claims.

The Patients’ Compensation System would be a state-based entity and, similar to other state based entities—such as the Florida or Virginia Birth-Related Neurological Injury Compensation programs—payments would not be reportable to the National Practitioner Data Bank (NPDB).

Physicians would not need to purchase medical malpractice insurance, because they could not be sued. Instead, they would pay an annual contribution to administer the program.^[2] A family practitioner, for example, would pay $3900 per year; an orthopedic surgeon, $15,600 per year; and a spine surgeon, $17,500 per year. The specialists with the highest contribution rate, pediatric neurosurgeons, would pay $25,300 per year. These rates would be significantly below the current market rate for professional liability premiums—which typically cover only $1 million of liability.

How Physicians Would Benefit

In the Patients’ Compensation System, there is no claim to defend. A doctor need only provide the patient’s medical record. He or she may ignore any other procedural nuance, if desired. Alternatively, he or she may provide an explanation of care that was rendered.

And if the doctor wants to advocate for the patient, he or she may sit with the patient. If a doctor, for example, misses a critical diagnosis that could have easily be made, and that error cost the patient an extra month in the intensive care unit, the doctor could apologize to the patient and work with him or her in a nonadversarial setting to help the patient achieve reasonable compensation.

Furthermore, there would be no depositions, no cross-examinations, and no shutting down of a practice for 3 weeks to sit in a courtroom. Unlike the current system, there would be no reason to deny and defend.

In the Patients’ Compensation System, the doctor incurs no personal financial liability for malpractice. In the current system, professional liability policies cover a limit for damages, usually $1 million. If a judgment exceeds this limit, the doctor is personally liable. This creates pressure on the doctor (and his or her insurer) to settle cases that might be defensible. Unlike in the current system, the doctor is fully “indemnified” for a patient’s injury.

In the Patients’ Compensation System, settlements and judgments reflecting payments to patients are not reportable to the NPDB. Because—unlike in the current system—payment would be made by the state-based system, such payment would not trigger reporting to the NPDB. As the statutory language states, “‘Application’ means a request for investigation by the Patients’ Compensation System of an alleged occurrence of a medical injury and does not constitute a written demand for payment under any applicable state or federal law”^[2] (which might otherwise trigger reporting to the NPDB).

How Patients Would Benefit

In the Patients’ Compensation System, all complaints would be reviewed. Currently, low-value claims are generally ignored by plaintiffs’ attorneys because the cost of prosecuting such claims exceeds the estimated recovery. In contrast, because low-value claims would be heard under the Patients’ Compensation System, more claims would be paid; in other words, more patients would have access to justice.

Payment would be made in months rather than years, as is common now. And the amount paid would be rational, reasonable, and predictable. Physicians would be able to speak openly and plainly about medical errors—enabling broad patient safety initiatives to be implemented.

The bill would allow a three-doctor panel to report any practitioner to the state licensing board who is an imminent danger to the public. A physician who poses such a risk would come to the attention of the board much sooner than under the status quo. Transparency is the starting point for fixing systemic safety problems related to those few physicians who are truly a danger to patients. A system cannot change what it cannot identify or measure.

How the Healthcare System Would Benefit

In the Patients’ Compensation System, physicians would have no incentive to practice medicine defensively. Currently, if a doctor fails to order a particular test or imaging study and the patient has a bad outcome, that doctor is at risk for defending against a lawsuit that will last years and potentially bankrupt his or her life savings. Under this paradigm, defensive medicine is rational. As one emergency physician explained, “I will scan patients till they glow if it means avoiding even a day in court.”

In the proposed system, doctors would be free to exercise their judgment. For example, if a person experiences a minor concussion, that individual will generally head to an emergency department. A minor concussion might be associated with brief loss of consciousness, nausea, headache, and other symptoms. On arrival in the emergency department, such a patient would ordinarily be neurologically intact. Best practices would include ordering an imaging study only for patients who either have or would be likely to develop an intracranial abnormality.

However, defensive medicine is often at odds with best practices—encouraging, in this hypothetical case, the ordering of an expensive scan and needlessly exposing the patient to radiation, whether or not the patient is deemed to be at risk.

In other words, resources could be saved without causing harm to patients. And patients who are unlikely to develop intracranial pathology would be spared radiation from an unnecessary imaging study.

The Patients’ Compensation System would create an environment in which defensive medicine would not be needed. If this goal were achieved, the healthcare system would save a fortune.

Challenges to Passing the Bills

Those who benefit from the status quo will fight tooth and nail against change. This includes the trial bar, even though they will have a potential role to play in ensuring that patients’ rights are preserved. Plaintiffs’ lawyers will argue, for example, that state constitutions guarantee patients trial by jury, and the Patients’ Compensation System removes that right.

Of course, old habits die hard. But trial lawyers would not have to risk their money going long on cases that might deliver zero payout. Plaintiffs’ lawyers could assist patients without incurring any risk whatsoever, because they would be paid per transaction. Real estate attorneys, for example, have done quite well with such a model.

Whether the Patients’ Compensation System is constitutional is beyond the scope of this article, but experts who have reviewed the proposed law firmly believe it passes constitutional muster.

What do patients say about a payment system as an alternative to litigation? A Georgia statewide survey by McLaughlin & Associates in August 2013 noted that 63% of participants support “reforming the current medical malpractice system” and 61% favor replacing the current medical malpractice system with a Patients’ Compensation System.^[4-6] There is an appetite on the part of the public to scrap what we currently have and try something new.

References

1. 2013-2014 regular session—SB 141 “Patient Injury Act”; create an alternative to malpractice litigation. Georgia General Assembly legislation. February 11, 2013.http://www.legis.ga.gov/legislation/en-US/display/20132014/SB/141Accessed January 25, 2015.
2. Beach B, Albers J, Gooch S, Hill H, Williams T. 2015-2016 Regular Session—SB 86 “Patient Compensation Act”; establish. Georgia General Assembly. February 4, 2015.http://www.legis.ga.gov/legislation/en-US/Display/20152016/SB/86 Accessed February 7, 2015.
3. The Patients’ Compensation System: a medical liability system that works for patients and our economy. Patients for Fair Compensation.http://www.patientsforfaircompensation.org/media/7142/pfc_wp-0612_lr.pdf Accessed January 15, 2015.
4. Georgia statewide survey results. McLaughlin & Associates. August 2013.http://mclaughlinonline.com/lib/sitefiles/GA_PCS_Release_Slides_09-23-13.pdfAccessed January 26, 2015.
5. New poll: Georgians believe medical malpractice costs increase healthcare costs. McLaughlin & Associates. September 18, 2013.http://mclaughlinonline.com/2013/09/18/new-poll-georgians-believe-medical-malpractice-suits-increase-healthcare-costs/ Accessed January 26, 2015.
6. Georgia voters support patients compensation system to curb healthcare costs. McLaughlin & Associates. September 23, 2013.http://mclaughlinonline.com/2013/09/23/georgia-voters-support-patients-compensation-system-to-curb-healthcare-costs/ Accessed January 26, 2015.

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