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Eliminating medical malpractice premiums

By   /   January 28, 2010  /   Comments

If you are a physician shelling out tens of thousands of dollars annually for malpractice insurance, you should be screaming at your Congressman and senators right now.

Why?

Because floating around the House of Representatives last fall was a proposal that would have eliminated all of your premiums — you would have paid $0 — had it been incorporated into the health care reform bill. It was never adopted — not even debated — or you would have heard about it before reading this op-ed column.

The proposal was stunning in its simplicity and effectiveness: the current hodgepodge of state tort laws which allow injured patients to sue their physicians, but only if they can prove their doctor has done such a poor job that he or she breached the standard of care, would have been replaced by a single national system that used a workers compensation style no-fault system. Under the no-fault proposal, doctors, hospitals, and drug manufacturers would no longer need any malpractice insurance.

The national system would have been funded with a one percent sales tax on all medical goods and services (at $2.3 trillion, the annual contributions would have been $23 billion, far more than is currently paid out annually in malpractice settlements and jury awards). Injured patients would no longer have to prove fault; they wouldn’t even need to hire lawyers. Doctors would no longer have to engage in wasteful defensive medicine. And specialists in areas like ob-gyn would stop fleeing their practices because of crushing insurance premiums.

So what happened? Why didn’t this proposal get a fair airing in Congress? Beats me. On Sept. 30, 2009, Rep. Sanford Bishop sent a copy of the article outlining the proposal (it had appeared in a Georgia statewide legal newspaper, The Fulton County Daily Report, in 2004) to key legislators and committee chairs in the House of Representatives, including John Conyers, Henry Waxman, and Melvin Watt. He also sent a copy to David Cook, the president of the Medical Association of Georgia. And it was never heard from again.

Had the malpractice reform proposal been brought up before a relevant committee and included in the final bill put out by the House, it would have accomplished several goals of the reformers: it would have cut health care overhead costs by tens of billions, both directly in the form of insurance premiums and indirectly by reducing the billions spent annually in unnecessary tests by physicians practicing defensive medicine.

It would have provided a fairer and more efficient system of compensating patients injured from medical procedures, by misdiagnosis, or by side effects from medicine.

All injured patients — not the very few who collect under the current system — would receive compensation without having to prove fault or engage in lengthy and expensive lawsuits. And politically it would have given numerous Republicans in the House (even Joe Wilson!) and Senate strong motivation to vote for a health care reform bill that included the tort reform which they have been strenuously demanding.

As the current Senate battle has proved, getting even one Republican to vote against a filibuster of the bill would have been enough to secure a single payer system or a public option. It’s hard to imagine any Republican representative or senator going back home and explaining to angry physicians, hospital executives, and pharmaceutical company lobbyists why they turned down an opportunity to completely eliminate medical malpractice insurance premiums and the omnipresent fear of being sued.

The proposal also included a better mechanism than the current system for identifying and publicizing bad doctors, scary hospitals and dangerous drugs: all of the awards would be published on the internet, including the injury sustained, the medical providers involved, and the amount of the no-fault award (with one exception: unlike the current system with publicly filed lawsuits, the privacy of the patients would be protected). Before going to a doctor, entering a hospital, or using a prescribed medicine, the patient/consumer could get that information with a click of a mouse.

Too bad the proposal never got a hearing. Had it ever been put forward and included in the final bill, it would have guaranteed the passage of effective health care reform legislation that would have cut overall costs in the industry while improving care and providing more access to consumers.

FinkelsteinMugWritten by Jim Finkelstein.

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