Reform medical malpractice

By: Bernie Marcus

Appeared in Atlanta Journal Constitution on December 3, 2013


President Barack Obama is scrambling to keep promises he made to Americans when he sold us the Affordable Care Act. But what happened to his pledge to reform the medical malpractice system?

Our current liability system drives costs far higher and denies compensation to patients harmed by doctors. It’s expensive and unfair, and the new law ignores the issue completely.

Reforming the way this nation compensates injured patients affects everyone. By not addressing the issue, Obamacare will cost Americans dearly — particularly doctors and patients — while protecting the profits of trial lawyers and malpractice insurers.

Today, doctors often order unnecessary medical tests, procedures or consultations to protect themselves from lawsuits. Defensive medicine accounts for $200 billion to $650 billion of the nation’s annual health care tab.

Cut this waste, and President Obama’s “cost curve” will bend considerably. Health care costswould drop. The Affordable Care Act would be far more affordable.

Instead, under Obamacare, doctors will be told not to order expensive tests and penalized for patients’ frequent care and hospital visits. And they will still be liable for outcomes.

The result: Doctors will refuse to see the sickest patients, leaving fewer doctors to take care of more patients.

Today, nearly 80 percent of injured patients have no legal recourse. According to an Emory University School of Law survey, most lawyers sniff at cases without a $500,000 potential award. The vast majority of medical malpractice cases never go forward. Without a lawyer on contingency, few patients can afford to pursue litigation.

According to Towers Watson, an actuarial firm, only 17 percent of the $8.75 billion in U.S. medical liability policies annually goes to harmed patients. Another 17 percent goes to trial lawyers. Insurance companies actually keep 65 percent; it’s the most profitable product they sell.

Today the Georgia and Florida legislatures are considering solutions for a new way — a patients compensation system (PCS). A mash-up of workers’ compensation and no-fault insurance, it would be run by a public-private board. Medical professionals would review claims, taking the process out of the civil courts, and issue awards predetermined by medical actuaries.

Without fear of malpractice lawsuits, fewer doctors would practice defensive medicine. There would be more claims, but awards would be smaller. Total payouts would dramatically decrease. Most importantly, 80 percent of the awards would go to patients, not lawyers or insurance companies.

Surprisingly, the medical associations of Georgia and Florida oppose this reform. Perhaps it’s because both have financial stakes in their states’ largest medical malpractice insurance companies. According to Oppenheim Research, 95 percent of Georgia physicians support the new proposal.

Today, all eyes are on Georgia. If our legislators pass long overdue medical malpractice reform, other states will follow suit. With Georgia’s leadership, national health care costs can be cut dramatically, and both doctors and patients will get real justice.

Bernie Marcus is co-founder and former chairman and CEO of Home Depot, founder of Job Creators Network and founder and chairman of the Marcus Foundation.