Resonse from Dr. Alieta Eck

Now you got me going. The answer is right under our noses– if we go back about 46 years–before the onset of Medicare and Medicaid.  It is not too late.  Here is the dream you are looking for, Greg.

The answer is for physicians to take on the care for the poor– for absolutely no pay. No billing, no CPT codes, no ICD-9 codes. Nothing.  No physician should earn his living caring for the poor. He should earn his living in his private practice where he can expect payment for services rendered.

And like the way it was before government decided that it could provide health care in an efficient, compassionate, low-cost manner, this free care needs to be done in non-government free clinics (NGFCs)– staffed 95% by volunteer physicians, nurses and support staff and funded by genuine charitable contributions– no government grants, no money extracted from overburdened taxpayers.

Patients self identify themselves as poor, sick and in need of a physician. Then they access the free clinic that is in their neighborhood, staffed by pleasant people who have chosen to be there and are genuinely interested in their well-being and future prosperity.  There will be no government bureaucrats filling out forms to see if they qualify for “benefits.” Each clinic will develop its own criteria to decide who is needy and needs the free care.

These patients need to know that the free clinic is not their medical home, but rather a bump in the road on their way to financial independence. Once they are on their feet, they can go to the same doctors who cared for them in the free clinic, but now in their practices.  Pay cash– but a fair cash price, not one that is trying to make up for the low fees paid by Medicare, Medicaid and HMO’s. A free market price, just like Jiffy-Lube for their cars.

The physicians and taxpayers need protection. If doctors are going to be providing free care in an NGFC, their medical malpractice for work done there will be covered by the federal government via the Federal Tort Claims Act (FTCA). But that is not enough. They need protection from the lawsuit hungry culture that has all but destoyed the medical profession. They need the state to step in and just cover them for malpractice– for their entire private practices. This will cost the taxpayers nothing unless there is a lawsuit– and these will be greatly reduced to episodes where real damage has occurred due to real negligence on the part of the physician. These cases are extraordinarily rare.

If the patients coming from the free clinics need specialty care or hospitalization, they need to access the system of “charity care” that the hospitals already have in place for poor people who have not gotten onto Medicaid.

The free clinics will be inter-connected via a sophisticated computer system. Thus surgeons who are willing to donate two operations per month will be able to sign on and find a patient who needs him, entered by the primary care doc who identified his problem via studies that were done by labs and radiologists who have donated their services. Obstetricians will identify two pregnant ladies per month, do their prenatal care in the NGFC, deliver them in the hospital and take care of them post-op. The absence of medical malpractice payments will free them up to do this good work.

The details will come easily once the structure is in place. All the pieces are actually there– but just need some realignment. Physicians are already covered by the state when they work in the medical school facilities.

Where will these free clinics come from? Where will they be? Who will start them and staff them? The answer again goes back 46 years– when all the hospitals were named after saints and popes and patriarchs. For the natural place where charity begins is in the faith communities. And there will be no shortage of volunteers, as the baby-boomers are retiring at a rate of 10,000 per day.

On Saturday, June 11th, at 10:30 AM, there will be a meeting of pastors held at the new facility of the Zarephath Health Center, 495 Weston Canal Rd, Somerset, NJ 08890. The ZHC will move from a 900 square foot to a 5,000 square foot facility, ready for the many volunteering physicians who will be looking for a place to see the poor.  The purpose of the meeting is to teach pastors how they can start a free clinic associated with their church.

The speakers will include:

• The pastor of the church who has watched his congregation grow from 150-2,000 in the past 7 years– as people, rich and poor, are attracted to a church that cares for the poor.
• The social worker who is also the builder who used many volunteers and thankful former patients to put together a clinic with 5 exam rooms, a dental room and 3 intake rooms where kind volunteers will just sit and hear the stories of the patients that come.
• The physicians who have manned the ZHC for the past 8 years– who have learned much about the poor and what they really need.
• The former FTCA administrator who now works for Echoclinics.org, a philanthropic group whose stated goal is to facilitate the starting of 10,000 free clinics by 2030.
• The community activists who have convinced 6-7 legislators in NJ to write the New Jersey Volunteer Physician Protection Act to make this concept a reality.

It will be a time of interaction and real problem solving. Let me know if you want to be there, and I’ll have an extra sandwich for you!

Alieta Eck, MD

co-founder- Zarephath Health Center

NJAAPS.org — watch my discussion of this idea with Judge Andrew Napolitano, and my testimony to a Senate health sub-committee.

Response from Dr. Marcy Zwelling

The Immorality of Irresponsibility

This nation was founded on the principles of “natural law” and many believe fashioned after the writings of Thomas Aquinas.  Thomas Aquinas, theologian and philosopher, realized and wrote about the capacity of human reason to grasp what is right: our morality.  He wrote that truth was understood through reason and human reason was the basis for all law.  He even recognized and wrote about the law of economics, the idea of a fair price.  If the suppliers’ costs are not covered, the business cannot succeed, reasonable and rationale.

Natural law stands as the foundation of our constitution and is the basis of our founders’ passion for every American’s right to self-determination. Man should be able to formulate his /her own destiny within the confines of a reasonable legal system.  The law defines our inherent obligations to each other and the public at large but does not compel us to practice self-sacrifice.

I believe that most Americans believe themselves moral. Most of us want to do the right thing.  We vote that way and define our relationships that way regardless of our politics.

Reason or natural law would have it that “the right thing,” basic human nature does not allow for irresponsibility.  How is it reasonable that any human would not want to take care of his/her own personal needs as best he/she can?  Protect himself and his family? How is it possible that it is immoral for me to not want to accept my neighbor’s personal responsibility?  It is not.

If personal responsibility is the moral paradigm that is the underpinning of American freedom, it cannot be moral that any person be allowed to dispose of that obligation. Morality and reason demand that I work for myself first. My morality demands that I not allow my neighbor’s indifference to his/her own needs mandate my personal contribution.

American morality has no place for personal irresponsibility.  If we are going to turn our economy around and provide the framework for American world leadership we must come to terms with our personal morality. Anything less will bankrupt our pockets and our sense of reason. Personal responsibility is our American duty.

The AMA No Longer Matters

One of the discussion lists I participate in had a lively exchange about the AMA’s new Executive Vice President, Dr. James Madara. Some people thought he was a good choice, others thought he is too much a creature of academic medicine and too much of an Obama liberal. I really have no idea, I said, but over the past few years the AMA has betrayed America’s patients and I have no use for the organization. Then I added another post:

Folks,

I really have no business commenting on the AMA, so I won’t (any further.)  I love — quite literally — every poster on this list. You are all great physicians, dedicated citizens, and decent people in every way that counts. I do not want to discourage any of you in doing what you see as the right and moral thing.

I want to throw in a different thought that really has little bearing on what the AMA does. I hope you will indulge me, because I think it may provide context.

I no longer think this health care system — or this economy, or this government — is capable of being reformed. It is too late. I have asked every economist I know about how we get out of the mess we have created, including schools that don’t teach, growing numbers of people dependent on government handouts, a regulatory system that destroys entrepreneurship, and the impossible debt we have accumulated.

Not one has offered anything approaching an answer. Not just a practical answer, but even any theoretical, dreamland answer. There is no way out. That means the entire house of cards will collapse. Maybe not for another 20 years, maybe just 10. By collapse I mean something close to an early Mel Gibson movie in which survival is the primary motive.

A very large portion of our population has no practical skills. They may have advanced degrees in comparative literature or they may be great systems consultants and six sigma experts. But they don’t have a clue how to feed themselves, make clothes, build shelters, or fix a broken bone. After the collapse, the people who will prosper are those who can actually do something of value.

Feel free to dismiss all this as irrelevant to anything currently on the table. And perhaps I have become a kook in my old age. Certainly there have been nonsensical doomsday predictors forever, and maybe I have joined the crowd. But I have looked for any ray of sunshine and have not been able to find it. Sorry.

So my interest in health care now is to find a way that one patient and one doctor can find each other and work out a mutually beneficial relationship. Anything else is just noise.

Greg Scandlen

Very much to my surprise most of the people on the list agreed with me. I will publish a couple of the more extended comments in a moment. I would love to hear what you think.

 

 

The Destruction of American Medicine

By Greg Scandlen

The New York Times has published a sobering article by Gardiner Harris  which describes how quickly we have allowed the best health care system in the world to slip through our fingers.

The story keys off Dr. Ronald Sroka, a family practice physician in Crofton, MD. It says,

Handsome, silver-haired and likable, Dr. Sroka is indeed a modern-day Marcus Welby, his idol. He holds ailing patients’ hands, pats their thickening bellies, and has a talent for diagnosing and explaining complex health problems. Many of his patients adore him.

But he is being pushed into extinction by academics like David J. Rothman, president of the Institute on Medicine as a Profession at Columbia University who is quoted:

Those of us who think about medical errors and cost have no nostalgia — in fact, we have outright disdain — for the single practitioner like Marcus Welby.

Mr. Rothman’s disdain and his allies in the insurance industry and government bureaucracies are winning the war. The article explains:

The share of solo practices among members of the American Academy of Family Physicians fell to 18 percent by 2008 from 44 percent in 1986. And census figures show that in 2007, just 28 percent of doctors described themselves as self-employed, compared with 58 percent in 1970.

It’s enough to make you weep, but there is perhaps a sliver of good news. A friend sent the following e-mail to one of my discussion lists:

Last week, Senator Whitehouse came to northern Rhode Island to speak to his home community. He had largely an elderly and retired audience of about 300. His comments were focused on them as he spoke of how he would fight to retain Social Security and Medicare. The audience clapped politely. Whitehouse continued to discuss healthcare. He eventually came to speak about physicians, lighting upon the topic as to how our actual charge per service differs depending upon what insurance each person has. “Go ahead,” he said, “call a doctor and ask what they charge for a certain visit or procedure. They’ll ask what insurance you have.”

I rose and said “$50.” I introduced myself to the audience and said that I charge $50 for an office visit, that I don’t take insurance, and that as a result of the massive cost savings by not having a coding specialist, collections specialist, or billing overhead, and by not having to rent an office big enough to house all those people, I can charge a reasonable fee while each patient retains the confidence of knowing that no third party will have any of their private medical information, of knowing that there are really only two people in the room when we talk, and of trusting that I’m going to provide the treatment that they really need rather than the treatment some third party tells me I should be providing.

I expected that this largely Medicare-covered audience would shake their heads and whisper “dinosaur” under their breath. Instead, I received applause and a few dozen new patients the next day. Each said roughly the same: “I’d rather pay for the care I want than have insurance cover me for care I don’t want.”

If indeed most new physicians choose to look toward the type of practices described in the Times article, that will allow all the physicians who want to run their own lives to do so without worrying about whether they’ll have enough patients. There will always be patients willing to pay a reasonable fee out of pocket for the kind of care that can be delivered by doctors like Dr. Sroka.

While the bulk of American medicine may accept becoming little bureaucrats, doing the bidding of their masters in Washington, a sliver will simply offer their services to patients on a cash or concierge basis. These few may grow until medicine becomes once again the noble profession it once was.

Krugman’s Blinders

By Greg Scandlen

There has been a lot written about Paul Krugman’s recent op-eds  and blog posts about how thinking of people as “consumers” rather than “patients” violates their “sacred” relationship with doctors.  My colleague Ben Domenech had one of the best rebuttals in Consumer Power Report #269.

It is more than a little disconcerting to hear people like Paul Krugman suddenly invoke the sacred doctor/patient relationship when they have been working so hard to have bureaucrats control both physicians and patients. But I want to make a different point, one that has been lacking in most of the commentary.

The whole point of Consumer Driven Health Care is to get people involved in their health care decisions long before they become patients.  For decades the “health policy community” has been fretting over this very thing – how to improve “health literacy,” how to get people to make healthy lifestyle choices, how to get people to ask questions about their treatment alternatives, how to teach people when it is appropriate to rush to the Emergency Department and when it is not, how to teach people the differences between the various medical specialties, etc., etc., etc.

We have health education classes in high school. We have newsletters with “Tips for Healthful Living.”  We have media reports about the latest breakthroughs in prevention and treatment.

None of it worked very well – until the advent of Consumer Driven Health Care. Suddenly people are responsible for making decisions about how to spend their own money for their own health, and they demand more information about their options. They sit together in the kitchen to decide how much money to set aside in a saving account and how big a deductible they can handle.  They have discussions about how often the kids go to the doctor and whether they will need glasses or dental work in the coming year. They look for lower cost generic drugs to replace the name brands they have been using. They use home remedies first, before making an appointment with the doctor. They participate in wellness programs.

They are not yet “patients.” They are active “consumers.”

If the Krugman’s of the world would take off their political blinders, they would see something wonderful is happening in the market.  But that would shatter their illusion of an all-powerful bureaucracy fixing everybody’s problems.

I Get a Kick Out of Uwe

By Greg Scandlen

Princeton professor Uwe Reinhardt is a really funny guy. Really. If you have ever caught one of his talks, he will leave you in stitches. Not the medical kind of stitches, but the other kind usually associated once-smoky nightclubs and a lone comic on the stage.

But he tops all of his previous comedic efforts in a single letter to USAToday. He begins by trying to rebut a recent op-ed:

One of the more mindless clichés trotted out in the health care debate is that “one size doesn’t fit all.” In seeking to rebut USA TODAY’s fine editorial on “RyanCare,” a proposal by Rep. Paul Ryan, Ed Haislmaier trots it out once again. He does this in a country whose entrepreneurs discovered a century ago that there are huge economies of scale in the idea that one size does indeed fit all to meet common human needs.

But, then his comic gifts kick in. He just can’t help himself:

KFC, McDonald’s, Burger King, Holiday Inn, Marriott Hotels and many more now global companies all base their business models on the idea that one size fits all. And Wal-Mart might soon teach us that the idea also applies to medical clinics, and someone might show it for hospitals as well.

Wal-Mart as an example of how “one-size fits all?” I know a lot of my liberal brethren would rather be caught dead than be seen inside a Wal-Mart, and there may not be any in the rarified environs of Princeton, New Jersey, but c’mon – are there no photographs in Princeton? Every Wal-Mart I’ve ever seen includes acre upon acre of variety.

And, in case someone doesn’t find anything to his liking in the Wal-Mart, there are thousands of other stores from Dollar General to Saks Fifth Avenue to choose from.

Now, my friend Uwe may prefer the old Soviet-style GUM Department stores for his retail needs, but is that really the model he wants to apply to health care? I can’t wait to hear the reaction once all the Princeton professorate is required to shop only at Wal-Mart.

Fortunately, right below Uwe’s letter is one from a Frank Zoz of Waterloo, Iowa, that is not nearly as funny, but might actually work –

I am absolutely convinced that health care costs will never be brought into control until people are spending their own money, or at least think they are. “RyanCare” changes to Medicare seem to be a step in that direction.

I think the ultimate solution is Health Savings Accounts (HSA) for everyone, with which they pay for insurance premiums and health care. The question is how these accounts are funded.

I am a John Deere retiree and on Medicare. John Deere provides insurance for its retirees. It provides money into an account (similiar to an HSA) from which we can pay for insurance and medical bills. My wife and I happen to have a Medicare Advantage plan and are very happy with it. The HSA covers our premiums and any significant additional costs. We have leftover funds that can be used for emergencies. If the government must be in health care, the best thing it could do is help fund HSAs for everyone.

Increasing Frustration

By Marcy Zwelling Aamot, MD

Americans’ frustrations are increasing. While we were promised that the cost of healthcare would soon stop its upward trajectory, we have yet to see any evidence of anything of the sort.  My individual premium is going up every year while my co-pays also go up.  Every business person with whom I speak complains about their healthcare costs and that includes the deans of our university where their health care costs are consuming so many dollars, they are starting to cut classes and decrease opportunities offered students.

The debate continues in Washington, DC and the promises are coming a mile a minute right along with the threat that we are all going to have to “take it in the shorts” one way or the other.  I wonder if individual Americans wouldn’t be better off managing our own healthcare demands rather than leaving things in the hands of the government or the insurance companies that have not earned our trust or our respect.  The latest budget debate and near closing down of the government assures me that things would be better in the hands of the average American.  We seem to appreciate the value of a dollar and understand value much better than our elected officials.

The solution is really quite simple.

1) We need transparency in health care.  How can we even start to manage our dollars without knowing the cost of care?  Every medical facility and establishment should be require to post their retail cash prices.  This costs nothing and at least starts to bring some honesty to the discussion.  We can start that today by asking our city councils to demand that every medical facility business license require the posting of  retail prices. You may be surprised to find that a mammogram costs less than $100.00 and yearly lab can be purchased for less than $50.00 cash.  Those who use their insurance and pay their deductible know that the cost is goes up when the payment for services is circuitous through insurers or the government.

2) Congress should require every insurer and itself (including Medicare) to sell a catastrophic only health care insurance plan that is actuarially based and open to all patients including those with pre-existing conditions.  The premium for this policy would be affordable and available to all.  Community rating does NOT apply. Patients must be charged the actuarial value of the policy but it should be available to all.  Surely, that person with hypertension will pay some additional cost but smart insurers will find a way to attract those patients by offering them a reduced rate for proof of adequate medical treatment.  This also puts patients in charge of their own healthcare.  As it is, there are many “pay for performance” opportunities for doctors but they have all failed because they have not offered incentives to the right person.  It is always the patient who should reap the benefit of his or her investment in their health.

A free market is the only way to bring competition back into the medical care marketplace and healthy competition drives innovation and excellence.  The current fixed pricing system offered by Medicare and health insurers has taken away opportunities afforded by human nature, our competitive spirit and drive.  The cost drivers are all the middle-men and regulations imposed on what should be a transparent and open marketplace.

In the end we want a healthcare delivery system where the patients can be empowered to be responsible for their own health and life investments.  Doctors need to direct our care to our patient’s specific individual needs and we must be answerable to that person in our exam room, not the government or an insurance company.  History has taught us that with freedom of self-determination, America will always find its way to excellence.  Why can’t we assume the same in the healthcare market place.

Docs in a Skinner Box

By Jane Orient, MD, Association of American Physicians and Surgeons

Behavior modification for physicians, as through pay for performance (“P4P”), is a central feature of “healthcare reform.”

The P4P idea, while now becoming explicit for physicians, is actually pervasive in society. “Do this, and you’ll get that” is the core of pop behaviorism, writes Alfie Kohn in his 1993 book Punished by Rewards. American managers are fundamentalists in their adherence to the Skinnerian model of motivation, he states.

When an influential idea is so widely shared that we no longer even notice it, it is time to fear its hold on us. Quoting Arthur Koestler’s The Act of Creation, Kohn notes:  “For the anthropomorphic view of the rat, American psychology substituted a rattomorphic view of man.”

CMS Director Donald Berwick, M. D., a great admirer of the Japanese industrial model and its potential for standardizing physician behavior, is apparently not aware of the conclusion of W. Edwards Deming, who was sent to Japan to study that model.

“Pay is not a motivator,” says Deming. And the system for appraising and rewarding merit “is the most powerful inhibitor to quality and productivity in the Western world.”  He adds that it “nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry, and…leaves people bitter.” Kohn notes that it is also simply unfair when it holds people responsible for factors beyond their control. One variation on the behaviorist theme that practically guarantees enmity is the collective (“shared”) reward. Since one troublemaker can spoil it for all, it calls forth a particularly noxious form of peer pressure. “This gambit is one of the most transparently manipulative strategies used by people in power.”

P4P, in Kohn’s view, is “an inherently flawed concept.”

Nevertheless, the current Administration has launched “one of the most ambitious behaviorist-style policy projects in American political history,” writes Christine Rosen (“Now Behave,” Commentary, July/August 2010). Regulation czar Cass Sunstein is a member of the behavioral brain trust that intends to bring about profound changes through specifications and regulations.

Accountable Care Organizations (ACOs)

The main difference between ACOs and HMOs is size—5,000 enrollees versus hundreds of thousands, writes Kip Sullivan for Physicians for a National Health Program California. Accountability for cost will be achieved by shifting insurance risk to providers, who are required to achieve “measured quality improvements.” The “defined population,” derived from fee-for-service Medicare recipients, apparently is assigned by the HHS Secretary, based on rules about who provides the majority of the patient’s primary care. Each primary practitioner is supposed to be part of only one ACO (NEJM 10/7/10). A booming industry has arisen to advise on ACO formation, even though the rules and information infrastructure still do not exist.

One problem to be ironed out is how to get around antitrust law, anti-kickback law, and restrictions on physician self-referral.

In an ACO, doctors are “double agents playing the dual role of caregiver and insurance underwriter,” writes Robert Geist, M.D. “ACOs are gatekeeping organizations to serve the purposes of ‘payers’…under the guise of the grander purposes of ‘society.’”

The AMA Board has apparently decided to do everything it can to promote ACOs, writes David McKalip, M.D. AMA president Cecil Wilson, M.D., told the House of Delegates that he would work to get small practices networked into ACOs—and didn’t seem to think that there is any role for any doctor to ever work outside an ACO. P4P is a mandatory and integral part of ACO implementation, Dr. McKalip adds. Yet AMA leaders continue to ignore the directive to actively oppose P4P programs that are not compliant with AMA principles.

For hospitals, ACOs offer another opportunity to garner money and power in the developing feudal medical system. “Global” payments for “episodes of care”—perhaps lasting 6 to 12 months—will guarantee skimping on payment to the serfs for the care of sick livestock, writes Lawrence Huntoon, M.D., Ph.D. Companies that specialize in investigating “disruptive” physicians seem to be springing up everywhere, he notes. One found 8 “independent” physician members of the medical executive committee guilty of being “intimidating.”

Docs out of the Box

In George Orwell’s novel Animal Farm,  the initial success of the socialist experiment depended heavily on the efforts of the loyal, strong horse Boxer, who responded to every setback with the resolve to work a little harder, and who had unquestioning faith in Napoleon, the leading pig. What will happen if Boxer retires early, or defies Napoleon—or if doctors decide to stop pushing the little lever to get their reward of a food pellet?

Of physicians responding to a 2010 Physicians Foundation survey, 40% said they would drop out of patient care within the next 3 years. About 60% said “reform” would compel them to close or significantly restrict their practice to certain patients. While more than half thought that patient volume would increase, 69% said they did not have the time or resources to see more patients while maintaining quality. About 16% said they planned to switch to a cash-based on concierge practice.

“Reinforcement” is a negative for excellence, even when cast in the form of an incentive rather than a punishment.

More on Medical Liability

By Greg Scandlen

The feedback I got from the original post has been great. I have responded to a lot of it in the comments section. But first, let’s keep in mind that the Congressional Republicans are looking to do something in this area right now. One of their biggest criticisms of last year’s “reform” effort was it did nothing to address the liability issue.

So, the first question is really what if anything should Congress (the federal government) be doing to reform the current system? My own view is that they have no business meddling in state tort law. For better or worse, the states are responsible for their own tort systems, and what they do will have an impact on the economic climate in their own state. Some states are famous for being plaintiff-friendly and local economies suffer because of it. Tort reform, broadly speaking, is a huge issue all by itself and needs concentrated attention. For instance, the way we do class actions is, in my opinion, obscene and benefits no one but attorneys.

But the focus of this blog is on health care, and the question before us is how to create a system of compensation that is more rational and fair, and whether there is a federal role in creating such a system. I don’t think it is possible to do it under tort law for all the reasons I mentioned before.

No one (including my wife) seems to like the idea of a tax on providers to pay for a compensation pool. I would think getting out from under the cost of malpractice premiums and the terror of court would be worth it, but the distrust of the federal government is so high that the words “federal” and “tax” sends people running for the hills. People are convinced (with good reason) that the Feds would use the money for other purposes, and use their new power to control physician behavior.

Not using a tax is not a deal-killer, however. It is not hard to imagine a voluntary system that enables physicians to mutually pool their resources into a patient compensation fund to recompense injured patients. Physicians who choose not to participate could continue to take their chances with the tender mercies of the courts. Such a system would need to be sanctioned by Congress (or, less likely, a state legislature) and participants freed of the tort system.

Some physicians seem comfortable with the tort system because that is what they are used to. I am scratching my head over that one. One physician told me he thought my system would be fine, but should be paid for by patients. I replied directly to him that that would be a non-started for reasons that seem obvious to me, but in case they aren’t to you, let me list a few:

• A reformed system would relieve physicians (and hospitals) from their current costs of malpractice insurance, so paying nothing into a new system would give them quite a windfall.
• Patients do not cause medical mishaps, physicians do. While a reformed system should not be fault-finding, you do not want to get into a blame the victim game, either.
• Physicians really have to take the “greedy doctor” syndrome seriously. It is not something I agree with, but plenty of people do. The AMA hasn’t helped with its seeming lack of concern about the plight of patients as long as the Docs are well paid.
• Patients very often do not have the resources of physicians. It is hardly fair to expect a working stiff to pay for the insurance to fix the problem caused by a less-than-optimal physician.

The point of this exercise has been to make damaged patients whole while freeing physicians of the burden of litigation. I am rather surprised that the Docs are not more receptive to such a change.

But, in any case, let me paste below a description of the system New Zealand has set up. This was provided to me by John McLaughry of the Ethan Allen Institute and put forth by William Hsiao as part of his report to the Vermont legislature in creating a single payer system in that state:

From William Hsiao
Alternatively, Vermont could replace its current civil malpractice tort system with a no-fault compensation system for providers. In discussing a move to a no-fault compensation system, we use the model of New Zealand, with reference to comparable models in Scandinavia, to provide a background on the system and evidence on its potential impact in Vermont.

In New Zealand, the Accident Compensation Corporation (ACC) adjudicates all injury claims and administers the country’s no-fault compensation system. In 2008, the ACC’s operating costs equaled 12 percent of claims.[149, 150] Claim payments required by the ACC are, on average, less than US $30,000. Physician indemnity insurance costs less than US$1,000 per year for all specialties in 2005.[149] The ACC model provides redress through a fixed award schedule intended to ensure that claimants with similar disabilities receive similar awards.[149] Awards are comprised of four compensation categories: 1) treatment and rehabilitation costs, 2) earnings reimbursement (up to 80% of a claimant’s lost earnings at the time of injury up until a set maximum), 3) a lump-sum payment of up to $70,000 for permanent impairment, and 4) support for dependents. The fact that New Zealand already provides free medical care also reduces the cost of awards because, unlike the U.S., this component of compensation is not at issue. The no-fault system also allows New Zealand to focus on reducing rehabilitation and return-to-work times. Recent reforms have improved public perception of the system, as 60 percent of respondents now view the ACC with confidence, up from 42% in December 2005.[150]

As of 2005, New Zealand replaced the term “compensable medical injury” with “treatment injury.” A treatment injury includes all personal injuries occurring during medical treatment, irrespective of whether negligence was involved, creating a no-fault medical liability system. To prove treatment injury, a causal link between treatment and injury must be shown, while injuries that are a “necessary part” of treatment are not covered. This change was made partially because of research which showed that even with an easy claims process, only about 3.3% of potentially compensable events resulted in successful awards. This number cannot be directly compared to the U.S. rate of 3%, since this refers to the percentage of adverse, negligent events that result in claims; however the New Zealand number refers to the percentage of all potentially compensable adverse events that receive payment. Moreover, the same study reviewed hospital records in New Zealand and showed that about 2% admissions were associated with an adverse event potentially compensable by the ACC.[151] Although an appropriate comparison would adjust for differences in case-mix, patient severity, and technology change, this compares favorably to the U.S. adverse-events rate of 3.7% mentioned above. Since the 2005 reform, medical claims to the ACC have increased as hoped from an average of 2,000 per year to over 5,000 in 2008. The system has historically compensated about 40% of claims. 23[149] Assuming pre-reform per claims costs of about US$30,000 and a 40% acceptance rate, claims costs would have jumped to US $61 million per year in 2008 or about 0.4% of New Zealand’s total health expenditure[152], comparing favorably to U.S. malpractice costs of about 2% of total health spending.24

Another interesting aspect of New Zealand’s system is the creation of a separate process for patients seeking non-monetary remedies for injuries they perceive were caused by medical treatment. A government official called the Health and Disability Commissioner (HDC) receives complaints from patients and attempts to resolve them using advocacy, mediation/investigation and disseminates the findings to improve care quality.[153]

In addition to New Zealand, all Scandinavian nations operate some form of no-fault medical-error compensation system, as well. The Scandinavian nations have similarly short waiting times to claims resolution as New Zealand and allow the patient a right to a jury trial after two appeals.

 

 

 

Fixing Medical Liability

By Greg Scandlen

(Note: I am hoping for and expect some vigorous comment and discussion on this issue. Fire away!)

One of the key points for the Republicans going forward is what to do about professional liability. This was ignored in ObamaCare, but is essential in any health reform proposal.

We have been wrestling with it for decades without much success. There have been a handful of states that have taken action, notably Texas and California, with good results. Other states, like Illinois, have tried, but in that case the state Supreme Court disallowed any limit on what plaintiffs could collect, so threw the law out.

As with a lot of intractable issues, sometimes the problem is that we aren’t thinking about it in the right way. The problem needs to be reframed to get us out of the cul-de-sac. Let me try to do that here.

First principles. Tort law is a state, not a federal responsibility. Some of my physician friends are so frustrated by the control the trial bar seems to have over state legislatures, that they are looking to the Feds for relief. I understand the sentiment, but I don’t think it is a good idea to sacrifice Constitutional principles of federalism for expediency. Plus, I’m not sure the trial attorneys are any less influential in Congress than they are at the state level. And, if the Feds take over the issue and get it wrong, it will be nearly impossible to fix in the future.

A better approach would be to remove professional liability from the tort system entirely. There are enormous problems with using the courts to remedy the consequences of poor medical outcomes. Notice I say “poor outcomes.” Many of the malpractice complaints have nothing to do with “malpractice” per se. The physician is not shown to have committed any error, or to have been negligent or incompetent. Things simply didn’t work out the way the patient hoped. If a jury is sympathetic to the plaintiff, it may provide an award regardless of the performance of the physician.

There are other problems with using the tort system in these cases:

• Many patients are uncomfortable bringing suit or in dealing with lawyers. They avoid courtrooms, so have no mechanism for curing their complaint.
• Contingency fees often mean that the complainant receives only a fraction of the award, with 25% or more going to the attorney.
• Marginal cases are likely not to be brought at all. An attorney working on a contingency will cherry pick only the strongest cases and not risk investing time on a borderline case.
• When there is real negligence or incompetence, the offending physician is not disciplined other than having to pay higher insurance premiums. The medical board may not even be notified of the problem, so the physician is free to continue being negligent or incompetent.
• If the suit is settled before judgment, there is no record of the outcome, so no one knows that a particular physician has a problem.
• Finally, using the courts is expensive and slow. It may be months or years before a damaged patient receives any compensation. Those may be months or years of extreme discomfort or pain for the patient, and real economic damage until the case is resolved.

Let me offer a better approach. This would be a no-fault system that would allow, but not require, legal representation. There would be a pool of money for awards financed by a tax on all health care providers, possibly as a percentage of income. This tax would be strictly dedicated to funding the pool. Providers would benefit by not having to pay malpractice premiums. Awards would be made by an administrative law judge (ALJ), kind of like the Workers Compensation system used by most states. The standard for awards would not be punitive, but be aimed at making the patient whole. Decisions by the ALJ could be appealed to a higher level of adjudication. The ALJ would notify regulatory boards of cases of negligence or incompetence, and the discipline of the offending provider would be left to the appropriate regulatory board. All cases and all awards would be public information. Every patient would be notified of his or her rights of remedy prior to receiving a service. Creditors of the damaged patient would be informed that a case is underway, so would be more patient in collecting debts.

This could be a federal system, like the federal bankruptcy courts. It would allow the states to continue their tort law systems in tact, but remove medical liability from those systems.

I don’t know if total costs would be any less than the current system, but I think it would be far more efficient and fair to both patients and providers.