John C. Goodman

The incentives on the supply side of the market would change almost overnight. Since doctors and hospitals would have to pay premiums to insurance companies to pay off the claims, they would have strong incentives to reduce the number of adverse medical events, regardless of their cause. Under the reformed system we propose, every death would be equally expensive — no matter what caused it. Providers would continue to have good incentives to reduce deaths from malpractice. But they would be equally incentivized to prevent what is "preventable." They might even discover that all those other deaths and injuries really aren't "acts of God" after all.

This idea may be catching on. Legislation under consideration in Florida and Georgia would create a no-fault system modeled after the workers' compensation system. Because both reforms continue to focus on the idea of an "avoidable medical injury," they don't go as far as we would like. But their efforts are a step in the right direction.

These reforms could save billions of dollars in defensive medicine costs as well as court costs. Miami-Dade, Florida, is one of the most medically litigious counties in the country. So almost any system that keeps medical cases out of the courts will benefit Floridians and Georgians and reduce the malpractice premiums doctors must pay.

NCPA Senior Fellow Pamela Villarreal co-authored this commentary.


John C. Goodman

John C. Goodman is Senior Fellow at The Independent Institute and author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts."
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