Op-Ed: Tennessee Considers Bold Plan to Replace Medical Malpractice System, Reduce Healthcare Costs for Consumers

By CHARLES R. EVANS, FACHE


The fall brings tough news for families who live on a budget, and it may be even worse this year as consumers return to work to discover that health insurance options for 2017 will come with an astounding price tag.

Whether you are self-employed, work for a large company or buy an individual policy, health insurance premiums are expected to increase dramatically nationwide this year. Actuaries estimate the average increase to be 24 percent with some companies reporting spikes as high as 62 percent in Tennessee. For those with non-employer, individual or family policies, deductibles of $6,000 to $12,000 are now common.

According to the Centers for Medicare and Medicaid Services, the health share of the economy is expected to rise from 17.5 percent in 2014 to 20.1 percent in 2025. There is just no end in sight as health care is now becoming one of the most expensive items in the family budget and deterring employers from hiring.

Certainly no one believes this can continue which is why states must do what Washington, DC has failed to do: address utilization and tackle the problem of wasteful, defensive medicine. Doctors order these unnecessary tests, procedures and medications to protect themselves from a potential lawsuit.

Tennessee is among five states examining a pioneering new plan to reduce wasteful, defensive medicine by eliminating the state's medical malpractice system and replacing it with a no-blame administrative model.

Gallup reports that one in four healthcare dollars can be attributed to defensive medicine. That cost about $487 billion in 2015, according to BioScience Valuation, a healthcare economics firm. In Tennessee alone, defensive medicine costs up to $13 billion every year.

During my 40 years of leading hospitals, I can say that the majority of physicians I met have been sued - most under frivolous circumstances. This is why Tennessee joins Florida, Georgia, Alabama and Maine in considering the proposed Patients' Compensation System (PCS).

Under a PCS, a patient who had been harmed would instead file a claim before a panel of healthcare experts. The case would then go before an administrative judge, and the compensation - if approved - would be awarded in a timely manner unlike our current litigation-based system. Injured patients would be compensated based on historical data and would no longer be required to pay for any legal fees.

Compensation would be administered from a pool of medical malpractice resources. With no target on their backs for potential lawsuits, doctors would reduce ordering unnecessary, wasteful tests and procedures. As a result, healthcare costs would decrease.

A PCS now before the Tennessee legislature would do more to decrease over-utilization of healthcare system than anything we could wait for from Congress.


Evans is President of International Health Services Group and is vice chairman of the non-profit Patients for Fair Compensation. He retired President of Hospital Corporation of America (HCA), Eastern Group based in Nashville and held senior hospital executive positions in Indiana, Florida and North Carolina.