The States of Florida and Georgia are testing a new program called the Patient Compensation System, which is designed to replace the way medical malpractice claims are currently handled with a system that’s more like state workers’ compensation systems. It sounds like a pretty good idea. The way things are now, somewhere around $650 billion is spent every year on defensive medicine. Medical providers routinely order unnecessary tests out of fear of being sued. In addition, patients with legitimate malpractice claims often receive no compensation because the trial attorneys only want to take on the big money cases. The PCS would differ in that it would be fairly simple to file a claim, and claimants would be compensated for actual loss of earnings and medical costs.
Wayne Oliver, executive director of Patients for a Fair Compensation System, explained how it will work in a Wall Street Journal piece.
The Patients’ Compensation System, or PCS, being studied in Georgia and Florida is a no-fault, administrative model for addressing medical injuries. Patients unhappy with their care would file a claim to a panel of health-care experts. If the panel found that a medical injury had occurred, the injured person would be compensated. Without the involvement of the current adversarial legal system—in which cases often drag on for years, only to be settled out of court—payments to the injured would come much faster, mostly likely in a matter of months.
The benefits of this system to taxpayers and patients would be enormous. According to BioScience Valuation, if the compensation system were adopted in Georgia, over the course of a decade with physicians stopping the practice of defensive medicine, the savings in Medicaid to state taxpayers would be $3.1 billion. In Florida, the estimated Medicaid savings would be $16.8 over the same period. The savings in private health plans would be considerable as well.
Patients who may have been harmed by a doctor would also have greater access to justice. Joanna Shepherd Bailey, an associate law professor at Emory University, has found that about half of trial attorneys in the United States refuse to take malpractice cases unless the potential damage awards are $500,000 or greater. Under the PCS, any patient who was found to have been harmed would be fairly compensated at a rate determined by the board.
Where would the money come from? Not from taxpayers. Instead, a fund would be created from malpractice premiums paid by medical providers. With no more litigation—and no more legal costs driving up the quest for big awards—large savings would inevitably result. The premiums paid by doctors would be substantially lower than the ones they currently pay. (Read More)
Ironically, this sort of reform is needed now more than ever, since Obamacare is driving up the cost of health care in all of the states. It’s a shame that this study is limited to Florida and Georgia, but if it’s a success hopefully more states will sign off. If the PCS is similar to the state workers’ compensation boards that I’m familiar with, it will be extremely fair to claimants, while still bringing about significant savings for providers and all health care consumers who ultimately pay the price for medical malpractice.
Here’s a nifty little white board video PFCS put together that explains further.