To Make Health Care Affordable, Let’s Eliminate Wasteful, Defensive Medicine

Charles Evans
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Posted: Oct 27, 2016 9:05 AM
To Make Health Care Affordable, Let’s Eliminate Wasteful, Defensive Medicine

Just days before the 2016 presidential election, the Obama Administration admits its signature legislation, the Affordable Care Act, is causing health care costs to skyrocket for millions of Americans.

Premiums for mid-level plans are expected to rise an average of 25 percent in the federal exchanges next year, according to the Department of Health and Human Services. Some states will see enormous jumps in premiums -- as high as 116 percent in Arizona and 62 percent in Tennessee. One Georgia small businessman saw his family premium jump from $712 to $1,872 a month for the same basic coverage.

In addition, in places such as Alabama, carriers such as Humana, Aetna and UnitedHealthcare will no longer offer health insurance policies thereby leaving consumers with only a single choice for health care coverage.

Health care is now consuming a bigger and bigger chunk of the family budget. The Kaiser Family Foundation in 2015 found that deductibles have risen six times faster than workers’ earnings.

With health care costs for Obamacare spiraling out of control and health insurance provided by providers also becoming an unaffordable benefit, politicians are now once again floating the idea of a government-run, universal health care system as is offered in Canada or Europe. This will especially ramp up if Democrats win Congress and the White House on Nov. 8.

But as we have seen with the ACA, the solution cannot be found with a bigger federal plan. If we are to make health care costs sustainable for average Americans, we need to turn to the states that are embracing innovative ideas to reduce costs by eliminating waste in health care.

Four states are doing just that as lawmakers in Florida, Georgia, Tennessee and Alabama take a bold approach to contain costs with a proposal to eliminate wasteful, defensive medicine.

Gallup says one in four dollars spent in health care can be attributed to defensive medicine or when physicians order tests, procedures and medications that are not clinically necessary. They do it to protect themselves from a potential lawsuit. Defensive medicine does not add any diagnostic, clinical or therapeutic value. It does however add tremendous cost.

For example, a child falls on the soccer field and hits his head and needs stitches in the emergency room. The ER doctor sees no signs of head trauma but just a need for sutures to close the wound. But because of concerns about a lawsuit,he orders a series of expensive tests to confirm his diagnosis that there is no concussion.

BioScience Valuation, a health care economics firm, said that doctors ordered $487 billion in such wasteful, defensive medicine in 2015. To encourage the abolition of such wasteful medicine, lawmakers in each of the four states have introduced legislation that would abolish their state’s medical malpractice system and replace it with a no-blame administrative model.

Known as the Patients’ Compensation System or PCS, the pioneering concept is drawing attention in the medical community as it would change the behavior of those on the front lines of medicine.

Under the PCS model, a medically-injured patient could file a claim with a panel of health care experts instead of filing a lawsuit. The panel of experts and an administrative law judge would determine if a medical injury occurred and if so the patient would be eligible for compensation based on a schedule similar to the payouts traditionally offered in a legal system.

The patient would also be compensated in a timely manner. Compensation would come from funds generated from physicians’ administrative fees. Only trial lawyers would lose out as they would not be able to generate enormous fees that come with years of protracted litigation.

Based on my years as a hospital administrator, I can tell you that physicians are very fearful of litigation. Therefore, ordering expensive, unnecessary tests and procedures will continue until they are no longer held personally liable.

Health care costs are now becoming the biggest single threat to the fiscal stability of families and small business. Businesses are having to once again review costs and whether they can afford to keep their doors open or continue to offer health care for employees as premiums drain their bottom line. Something has to change, and the answer can be found with these state-based solutions.

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