Georgia Medical Groups Spar Over Medical Malpractice Reforms

Georgia physicians are debating whether to push for a state constitutional amendment to reinstate a $350,000 cap on medical malpractice non-economic damages or scrap the current tort driven system in favor of a scheme similar to the one used in workers’ compensation.

Georgia’s medical malpractice system has been under scrutiny since 2005 when state lawmakers approved a sweeping rewrite of the law. Among other things, the law raised the burden of proof individuals must meet to sue emergency rooms, placed a two-year statute of limitations on claims, and called for some parties to pay the other’s legal fees in certain cases.

The centerpiece of the reforms, however, was a $350,000 cap on non-economic damages. The Georgia Supreme Court in 2010 declared that provision to be unconstitutional, saying it improperly nullified a jury’s ability to award damages based on the facts in a case.

Now, health care providers in the state are considering their next move in an effort to rein in overall health care costs and reduce their medical malpractice premiums.

Jackson Healthcare Solutions CEO Richard Jackson believes it is time to replace Georgia’s current medical malpractice system that relies on courts to settle claims and institute a no-fault model that would closely mirror the one utilized to resolve workers’ compensation claims.

“The medical malpractice system is incredibly inefficient and the money actually goes to others in the system and not patients,” said Jackson.

Through the Patients for Fair Compensation, Jackson and his colleagues are advocating for the creation of a no-fault system whereby claims would be funneled through an independent medical review panel. The independent panel would review claims and forward those it finds have merit to a compensation department that would create a fee schedule for damages. Patients could appeal findings to an administrative law judge.

Jackson said the proposed system would restore the original intent of the medical malpractice system, which was designed to compensate patients in the event of a medical error. As it is now, he said, many deserving patients go without benefits simply because no attorney will take their case.

“If you are poor, unemployed or a child, attorneys will not take the case,” Jackson said. “What we want is a no-blame, streamline system that pays patients and is way more efficient.”

Jackson, citing a Towers Watson study, noted that in the past five years on average patient payouts accounted for 26 percent of healthcare providers’ premiums with another 17 percent to cove legal fees. At the same time, the study found that the state’s medical malpractice insurers reported an average annual profit margin of 47 percent.

By comparison, during that same period of time Georgia’s workers’ compensation system paid out 65 percent of the premium dollar in injured workers’ benefits with only four percent attributable to defense and cost containment expenses.

Jackson said switching to a no-fault medical malpractice system would also help curtail the practice defensive medicine whereby physicians order unnecessary tests and procedures to protect them in the event they are sued.

According to the Center for Medicare and Medicaid Services, out of Georgia’s annual healthcare costs of $53.7 billion, defensive medicine costs $14 billion per year.

Oppenheim Research recently conducted a poll of 330 Georgia physicians that found that 82 percent practice defensive medicine. Seventy-four percent of those physicians surveyed said it negatively impacted patients with only seven percent saying it improved the quality of their care.

The survey said that 95 percent of licensed physicians would support changing medical malpractice from a tort system to a no-fault system. If such a change were made, 47 percent said they would significantly change how they treat patients, while 36 percent said it would somewhat change their treating methods.

Ninety-six percent of the physicians aid they think a move to a no-fault system would reduce the cost of health care and 90 percent said it would improve the quality of care for patients.

The Patients for Fair Compensation plan is not without its critics.

Medical Association of Georgia Executive Director Donald Palmisano said that the association has not taken a formal position on the plan. However, he said, it raises several questions including whether the state really needs to totally restructure its medical malpractice system and replace it with one that is untested by any other state.

“We know the cap on non-economic damages work,” said Palmisano. “In 2005, it reduced claims and more physicians entered into Georgia.”

Given the Georgia Supreme Court’s decision to strike down the $350,000 cap on non-economic damages, Palmisano said one idea is to press for a state constitutional amendment to reinstitute the cap.

“It’s one of the possible solutions in the future,” said Palmisano.

Georgia Trial Lawyers Association Political Director Bill Clark said that the Patients for Fair Compensation plan would unfairly favor physicians over patients by having physicians in essence adjudicate medical malpractice claims.

Also, Clark said that the system would likely face the same constitutional objection as the $350,000 cap because it would deny a patient access to a jury.

“Patients would still have to show that malpractice is caused by physicians and if physicians had provided care it would not occurred,” Clark said. “That is a liability system.”

Jackson responded to his critics by pointing out that 99 percent of all medical malpractice claims are settled before they go to court. He also argued that the Patients for Fair Compensation plan is constitutional for the same reasons that the workers’ compensation system is constitutional. Namely, that it would provide guaranteed access to a medical malpractice system for all patients, not just those that attorneys are willing to represent.

But long term, Jackson said, is how high are people willing to let health care cost rise before they take action. “The real question is can we afford the cost if only one percent of people see a jury?” he said.