By: Randy Evans
The ink is barely dry on legislation to help plug a hole in the state’s Medicaid funding formula and state officials are already scrambling to find a way to fill another $390 million pending shortfall in the health-care program for 1.7 million low-income residents.
After stressful political negotiations, lawmakers agreed this winter to allow the Department of Community Health to extend the so-called “bed tax,” but even that won’t fill the expected gap of hundreds of millions of dollars in red ink over the next two years in the state’s Medicaid program. There are no easy solutions — only bold ones.
With skyrocketing Medicaid costs and insurmountable health-care deficits tugging at the state budget, the only way to stop all the red ink may be to embrace a bold new idea that could bring almost $7 billion in savings over the next decade to the state coffers by replacing Georgia’s medical liability system with a no-blame, administrative model like the one already used in the workers’ compensation area.
State Sen. Brandon Beach, R-Alpharetta, has introduced the concept, known as a Patients’ Compensation System (PCS), in the Georgia Senate. Sen. Beach, who serves as president of the North Fulton Chamber of Commerce, knows that health-care costs are putting an enormous strain on Georgia businesses and job growth.
And, when it comes to the state’s budget, no other item has a more critical impact than the escalating cost of Medicaid. It has tied state officials’ hands by diverting funds that would otherwise give raises to schoolteachers and other state employees, build roads or invest in other infrastructure.
Sen. Beach’s proposal is modeled after the workers’ compensation system already in place in Georgia. Under this approach, patients who suffer injuries from medical errors would be paid faster and with less hassle; doctors and hospitals would never be sued again but would nonetheless remain accountable; and Georgia’s health-care system would cost less while providing better care.
Nothing in the proposal would deprive any patient harmed by a medical error. But, instead of expensive litigation diverting resources from both the judicial and health-care systems, patients would file their claims with a panel of health-care experts. If the panel found a “medical injury” had occurred, the case would be sent to a compensation office for compensation. The focus of such a system would be patient care and, if a mistake is made, patient compensation.
The benefit to taxpayers is enormous. Put aside the savings spent adjudicating both frivolous and meritorious malpractice claims. According to a study by an independent health-care economics firm, which was then confirmed by researchers at Emory University, physicians would reduce — if not stop—- the practice of defensive medicine.
Defensive medicine occurs every day as doctors order more tests and procedures than are medically necessary out of fear of being sued. Reducing or eliminating the need for defensive medicine could translate into $3.1 billion in savings for state taxpayers in Medicaid costs during the first decade of a PCS.
In addition, according to the data, during the first 10 years of a PCS, the reduction in the practice of defensive medicine could result in another $3.8 billion in savings in the State Health Benefit Plan — the health insurance program that covers almost 700,000 state employees, retirees and their families.
Needless to say, the savings are enormous and could prevent catastrophic cuts or potential tax increases as Georgia policymakers look to balancing state budgets in the future.
There will no doubt be defenders of the current system — mostly trial lawyers and the insurance companies who profit the most. Yet, it is difficult to see how their claims hold up against the empirical evidence of a workers’ compensation system that has fairly compensated injured workers while lowering the amounts paid out. Furthermore, those with only minor injury and damages would have a venue for redress as trial lawyers typically refuse to take cases that will not result in a potentially large fee at the end of the litigation.
Oddly, there are some who claim that Sen. Beach’s concept is unconstitutional because, five years ago, the Georgia Supreme Court struck down the cap on damages related to pain and suffering. Yet, Georgia’s workers’ compensation system survives. If constitutionality were a problem, the Court would have already thrown out the workers’ compensation system. But, it has not.
Yet, the biggest obstacle to bold ideas never comes from those with vested financial interests that are best advanced by the status quo. Instead, the biggest obstacle comes from the unwillingness to simply try. Why?
Georgia does not always have to be last. With Sen. Beach’s proposal (after some improvements), Georgia could actually be first at something like replacing a litigation-centric medical tort system with one that provides patients with greater access to redress, decreased health-care costs and improved patient safety. At a minimum, give doctors, patients and health-care providers the choice. Results will then dictate which system is best for Georgia.