Solution to Defensive Medicine 2011 v8.3PublicSmall

8/7/2019 Solution to Defensive Medicine 2011 v8.3PublicSmall

1/18

1Copyright 2011 Jackson Healthcare

PROPOSED NEW LAW:Solving the High Costof Defensive MedicineBy Richard Jackson


2/18

Copyright 2011 Jackson Healthcare 2

What is defensive medicine?

The practice of ordering medical tests,procedures, or consultations of doubtfulclinical value in order to protect theprescribing physician from malpractice suits.

Merriam-Webster


3/18


Cost Dynamics of theCurrent Legal Environment

September 2010 issue ofHealthAffairsestimates the cost ofmalpractice to be $55.6 billion ayear (2 percent of overall annualhealthcare spending).

In a January 2010 Gallup study,physicians estimate defensive medicine tobe 26 percent of overall annual healthcare

spending ($650 billion).Commissioned by Jackson Healthcare

$30 55 Billion

COST OFDEFENSIVE MEDICINE

$650 Billionper year

COST OFLITIGATION

per year


4/18


Why do physicianspractice defensive medicine?

o Physicians are risk-averse to personal financial exposurefrom jackpot justice awards from non-peers

o Physicians abhor defending themselves against lawsuits

U.S. physicians are the only physicians in the world who arepersonally financially liable for malpractice; and the only onespracticing defensive medicine.


5/18


The Solution

Create a Patients Compensation System

modeled on the Workers Compensation System.


6/18


Workers Compensation System

o Before the Workers Compensation System was developedin 1910, employees had to pursue injury compensationthrough civil or tort law

o This had major drawbacks for both employees and

employerso The Workers Compensation System allowed a trade-off:

Employees get guaranteed medical care and payment for lost timeon a no-fault basis

Employers get predictable costs and protection against lawsuitso The Workers Compensation System is an operationally

efficient system that has worked for over 100 years

A Brief History


7/18Copyright 2011 Jackson Healthcare 7

Elements of aPatients Compensation System

o States would remove litigation jurisdiction from civil courts tospecial administrative agencies using specialadministrative law judges

o All uncontested cases are referred to a Patients

Compensation Board for adjudication of compensationaward

o Contested cases are referred to special administrative lawjudges to oversee process

o Process includes:

A physician memberMedical Review Board determines ifcompensation is warranted

Patients Compensation Board determines compensation level



Comparing the Two Systems

WORKERS

COMPENSATIONSYSTEM

PATIENTS

COMPENSATIONSYSTEM

SystemAdministration

State-by-state basis State-by-state basis

Case

Administration

Tried by judge Tried by judge

Employee/PatientProtection

Workers guaranteed medicalcare and leave-of-absencepay

Patients guaranteed compensationfor injuries/loss

Employer/ProviderProtection

Worker relinquishes right tosue for tort of negligence

Patient relinquishes right to sue fortort of negligence

CompensationAdministration

Workers Compensation Board Patient Compensation Board

Due Diligence Workers Compensation Board Medical Review Board

Accountability Employer injury rates tracked& reported

Provider injury rates tracked &reported



Provider Accountability

Physicians who do not follow the standards ofcare and are deemed incompetent by theirpeers will face disciplinary action throughtheir state licensing board, including thepossibility of losing their licenses.



Who pays?

Like the Workers Compensation System,where employers pay costs, all healthcareproviders would pay premiums to a PatientsCompensation System insurance fund, withno cost to tax payers.



Patient Benefits

o Faster adjudication of claims

Today, claims range 2-5 years to collect

Under Patients Compensation System, claims would take months

o More compensation awards

Half of legitimate claims currently not filed

Attorneys unwilling to front cost due to collectivity issues

Patients dont like litigation

o Reduces patient exposure to unnecessary tests

o Increased quality: a no fault system allows physicians toshare mistakes and evidence-based best practices

o Guaranteed collections



Physician Benefits

o No personal financial risk

o No lawsuits to defend

o Can practice medicine without fear of non-medical judgment

o No stress and distraction due to litigation process



Health System Benefits

o Reduces healthcare costs by $650 billion per year byeliminating defensive medicine

o No costs to taxpayers

o Eliminates two-thirds of costs of malpractice going to non-patient expenses

o Increases quality of care as a result of physician admissionof mistakes and willingness to share best practices

o Encourages adoption of medical innovations

o Can be implemented regardless of healthcare reform/repeal



Patients Compensation SystemA Better System for All

Current Tort System Patients Compensation System

Favors trial lawyers Favors injured patients

Encourages MDs to protect themselves fromlawsuits (which drives up costs)

Encourages MDs to follow best practices(which drives down costs)

Drives unnecessary tests, procedures,admissions (which drive up costs)

Drives quality and evidence-based practices(which drive down costs)

Results in malpractice cases that drag on foryears

Results in expedited settlements and faircompensation

Creates emotion-driven court cases andjackpot justice awarded by non-medical jury Creates evidence-based cases that weed outfrivolous lawsuits, inappropriate compensationand incompetent physicians

Results in unpredictable civil justicesettlements

Results in predictable and just civil justicesettlements



Patients Compensation SystemA Better System for All

Current Tort System Patients Compensation System

Discourages the disclosure of errors andoutcomes (which diminish quality of care)

Encourages the disclosure of errors andoutcomes (which increases quality of care)

Relies on hired gun expert witnesses Relies on independent, objective medicalexperts

One-third of malpractice insurance goes topatients

90 percent of malpractice insurance goes topatients

One-third of legitimate cases get filed 100 percent of legitimate cases get

compensated

Physicians are judged by laymen Physicians are judged by peers



Work Comp System as a Model

The Workers Compensation System is alegal precedent for a new healthcare solution:a Patients Compensation System


17/18Copyright 2011 Jackson Healthcare

Patients Compensation System

Reduces both litigation costs and cost of defensive medicine

Traditional tortreform only

reduces the costof litigation A Patients

Compensation

System

COST OFDEFENSIVE MEDICINE

$650 Billionper year

$30 55 Billion

COST OF

LITIGATION

per year


18/1818Copyright 2010 Jackson Healthcare

We need your opinion.

Please click on the link below to take a short survey on this program

http://bit.ly/eyji03

Email [email protected] 770 643-5697toshare your feedback and ideas, and to receive future updates onthis topic.

www.jacksonhealthcare.com
http://bit.ly/eyji03mailto:[email protected]:[email protected]://bit.ly/eyji03

Documents

Solution to Defensive Medicine 2011 v8.3PublicSmall