Years of medical-malpractice reforms have begun to rein in insurance rates for Florida physicians, but those benefits haven't trickled down to patients, a new study finds.
"Florida surgeons and physicians have seen an average [cost] decline of approximately 8 percent. However, there is no mechanism in place to mandate a reduction in the patients' health-care costs when providers realize savings," states a study commissioned by the James Madison Institute.
Now, a group called Patients for Fair Compensation proposes a sweeping overhaul to create a workers comp-style system that would adjudicate malpractice claims and curb the costly practice of "defensive medicine."
"Florida spends approximately $25 billion per year on defensive medicine," estimates Rick Jackson, chairman of the non-profit PFC. Jackson describes "defensive medicine" as the practice of "ordering medical tests, procedures and consultations of doubtful clinical value to protect against litigation."
As the Florida Supreme Court deliberates the legality of the state's $1 million limit on "pain and suffering" awards, med-mal reformers say an administrative alternative is needed.
In her study for JMI, researcher Mary Ann Fiedler reported that medical liability insurance rates in Florida are four and five times the rates charged in California.
"For example, medical professional liability insurance rates for obstetricians in Florida's Miami-Dade County were $277,241 in 2004 while the rates for OBs in Los Angeles were $63,272," Fiedler found.
Similarly, the cost of liability insurance for Miami internists was $69,310 versus $14,237 in Los Angeles. And Miami's general surgeons paid $277,241 compared with $54,505 in Los Angeles.
Jackson's group believes that a "patient's compensation system" patterned after the long-standing workers' comp program would ease the financial crunch on physicians and streamline the damage-recovery process for plaintiffs.
"The current system causes problems for injured patients and their health-care providers alike," Fiedler writes.
"Patients who go to court may face long delays before their case is heard and their claim is paid. Meanwhile, practitioners must deal with the high cost of malpractice insurance. To protect themselves, they engage in the practice of 'defensive medicine,' which increases the costs that practitioners must pass along to their patients."
One possible alternative is an "early offer" reform model. A 2007 study found that such a system could reduce plaintiff litigation costs by up to $200,000 and cut waiting periods for indemnity payments by two years.
But the "early offer" model is generally opposed by trial lawyers because it requires claimants to release claims on non-economic damages, infers benefits to insurance companies and cannot guarantee full compensation when there are no limits on attorney fees.
"If this method is considered and rejected, an additional condition is added to the burden of the claimant: They must prove that the 'provider's conduct was grossly negligent,' whereas tort law currently requires only a 'preponderance of evidence,'" Fiedler notes.
Questions also remain about how to finance such an alternative system, and even how to structure it in a way that will pass muster with the courts and all stakeholders.
But the current system is clearly broken, says the Florida Medical Association.
While we havent seen a final product yet, and it would be premature to weigh in on the concept until that time, the FMA is pleased to see stakeholders taking an innovative approach to affecting change in the medical liability climate in Florida," said Rebecca OHara, the association's vice president of governmental affairs.
"The FMAs goal is to make Florida the best place for physicians to practice medicine, and the current medical liability climate is the biggest roadblock to meeting that mission.
In an earlier policy statement, FMA confirmed that despite small decreases in malpractice insurance premiums in recent years have not made up for double-digit rate hikes imposed from 2000 to 2003.
"Liability insurance remains unaffordable for many Florida physicians. Even more alarming, some have chosen to stop providing critical services such as OB-GYNs, ER coverage, and nursing home coverage because they simply cant afford the risk," FMA stated.
FMA contends that Florida's "out-of-control litigation system" has created a situation where:
- "Settlements are often made where no negligence has occurred.
- "Physicians in high-risk specialties are sued with astounding frequency.
- "Although approximately two-thirds of all medical liability cases result in no payment, the costs of defending meritless cases are extensive and add significantly to the high cost of medical liability insurance."
Additionally, Robert Sanchez, policy director at JMI, says the current system lacks both transparency, where settlements are sealed, and equity, with only a small portion of the awarded proceeds actually going to the patient.
Working with Patients for Fair Compensation, state Sen. Alan Hays, R-Umatilla, and state Rep. Jimmy Patronis, R-Panama City, plan to sponsor reform bills at the 2012 Legislature.
Previewing the still-to-be-drafted legislation, Jackson said, "Unlike the current medical-malpractice system, claims would go before a medical review board that would determine whether patients should receive compensation for their injuries."
A yet-to-be-set fee schedule would be used to determine the compensation amounts, Jackson said.
Others involved with the PFC initiative include Charles R. Evans, president of International Health Services Corp. and a former executive of the HCA hospital chain who worked with Gov. Rick Scott.
While trial lawyers are almost certain to oppose the med-mal reform, as they have previous reforms, a JMI/PFC poll could give cover to legislators. The survey of Florida registered voters showed 66-68 percent of respondents believe that doctors often order unnecessary tests just to keep from being sued.
Some 85-91 percent of those respondents also believe that this practice has a negative impact on health care.
Pointing to administrative compensations systems in Denmark and Sweden, Jackson said medical malpractice claims in those countries are handled in an average of eight months, compared with 4 to 5 years in the United States.
"All cases would be heard, instead of the 8 percent of cases filed that actually make it to court," Jackson said. "More importantly, we would prioritize the standardization of care."
Contact Kenric Ward at kward@sunshinestatenews.com or (772) 801-5341.
