A win-win plan: Protecting providers, reducing costs

Dr. Henry N. Goodwin Jr.
Dr. Henry N. Goodwin Jr.

In 2010, Congress adopted President Obama’s Affordable Care Act (ACA) with the goal of providing access to high-quality, affordable health care. One of the many flaws in the ACA is that it fails to address our broken medical malpractice system.

By placing physicians and hospitals at financial and professional risk when an error occurs, our medical tort system increases the cost of health care, because it encourages the practice of defensive medicine. The system also decreases access to compensation for those with minor medical injuries, and interferes with quality improvement measures.

When I was a urology resident, I learned how doctors are encouraged to order more tests and procedures than are medically necessary to protect themselves from potential lawsuits. This practice of defensive medicine is wasteful and doesn’t add to the value of patient care. Because the adversarial nature of litigation is painful and distracting for physicians, who by definition enjoy teamwork and patient interaction, the incentives to practice defensive medicine are strong.

In 2005, Georgia passed a significant tort reform package that limited awards for pain and suffering to $350,000. Many thought the practice of defensive medicine would decrease, lowering health care costs. The Georgia Supreme Court, however, found the cap on pain and suffering unconstitutional, and defensive medicine flourished, because the risk of litigation did not diminish. The only noticeable difference was the increased profit margins enjoyed by malpractice insurance companies.

The actuarial firm Towers Watson estimates that during the last five years, Georgia’s medical malpractice carriers earned an average of 47 percent profit. No wonder MAG Mutual Insurance Company has joined the Georgia Trial Lawyers Association in opposing any meaningful changes to our current system.

Since trial lawyers pursue only the few malpractice cases with the potential for large awards, which usually take years to resolve, we should look to New Zealand for a better model to compensate patients. I saw it firsthand 10 years ago when I worked as a senior registrar in urology at Christchurch Public Hospital.

In New Zealand, the Accident Compensation Corporation (ACC) provides a scheme similar to our Worker’s Compensation System, where injured patients apply for compensation when an avoidable error occurs. As a result, defensive medicine does not exist in that country.

During my year in New Zealand, I found it refreshing to find doctors who could practice medicine without the worry of trial lawyers threatening their livelihood. The no-fault system has replaced the right to file a personal injury suit for medical claims since 1994 –- and the results have been great for patients.

The system has provided an opportunity for open discussions about medical errors and improvements for patient safety –- something rarely seen here in the United States. Doctors don’t worry about potential lawsuits and, because the Accident Compensation Corporation pays out all claims, New Zealand physicians don’t fear losing their personal wealth.

Georgia is considering a similar path. There is a proposal before the Georgia Senate to replace the state’s broken medical malpractice system with a Patients Compensation System (PCS) patterned after New Zealand’s ACC and similar programs in Sweden and Denmark. Under the “Patient Injury Act,” injured patients would have access to an independent medical review panel of medical experts who would rule on the merits of their case.

Money for the system will come from premiums paid by physicians like me, just as they are today. Unlike with the Affordable Care Act, there would be no tax increases, penalties or extra fees imposed on the citizens of Georgia. Since the proposed PCS eliminates the need for medical malpractice lawsuits, more of the awards would go to injured patients rather than the lawyers who file and defend medical malpractice claims.

This bold new idea for Georgia to reform our medical malpractice system, and in turn reduce health care costs, would benefit providers, patients and the businesses that provide jobs in our state. In my view, it represents the most promising opportunity for our state to decrease health care costs while improving quality and access. Please join me in supporting Senate Bill 141.

Dr. Goodwin practices with Augusta Urology Associates. He earned his medical degree from the Medical College of Georgia and worked at Christchurch Public Hospital in New Zealand.