Senator Brandon Beach & Wayne Oliver's 2013 SLC Presentation

PATIENTS’ COMPENSATION SYSTEMA PROPOSAL THAT WORKS FOR PHYSICIANS AND THEIR

PATIENTS

Senator Brandon BeachDistrict 21, North Atlanta

Wayne W. OliverExecutive Director, Patients for Fair Compensation

November 1, 2013

Presentation to:AAFP State Legislative Conference

2655 Northwinds Parkway • Alpharetta, GA 30009 • 877 248 1689 • www.patientsforfaircompensation.org © Copyright 2013

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ADDRESSING A SIGNIFICANT PROBLEM

SB141 represents a bold, new, innovative approach to healthcare …

• Thousands of hours of engagement by national and international thought leaders

• Investment into clinical research, original thought leadership, data and analytics, actuarial reports, and peer-review studies

• Gaining nationwide attention as policy makers look for an answer to out-of-control healthcare costs

• PCS solution saves lives, advances patient safety, decreases the cost of healthcare, saves taxpayers, physicians and families money and fairly and appropriate compensates legitimately injured patients


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THOUGHTFUL APPROACH

SB141 represents a bold, new, innovative approach to healthcare …

• Based on scientific research, data analysis, medical experts and actuarial studies

• Working with specialty and professional societies to create the best bill

• Will work with state and national societies to replicate and pass on lessons learned …


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WE’RE SOUTHERNS …

We like our college football …


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CURRENT TORT SYSTEM BROKEN

Promotes Defensive Medicine• GALLUP - 26% of overall healthcare costs

• Cost up to $650 Billion to US citizens• $14 billion annually to Citizens of Georgia

Prevents Access to Justice• Less than 20% of injured patients receive compensation

• Less than 1% receive Jury Award

Hurdle for Patient Safety• Unable to significantly improve under a “Blame & Shame” system…


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Traditional tort reform only

reduces the cost of litigation

Patients’ Compensation System

COST OFDEFENSIVE MEDICINE

$650 Billionper year

$31 Billion **

COST OFLITIGATION

per year

Physicians in states with traditional tort reform practice same amount of defensive medicine as other states…

Source: “A Costly Defense” published by Jackson Healthcare September 21, 2011

REDUCES BOTH LITIGATION COSTS AND COST OF DEFENSIVE MEDICINE

02/25/13

** Source: BioScience Valuations report July 19, 2012


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PHYSICIANS PRACTICING DEFENSIVE MEDICINE (%)

U.S. physicians are only ones personally financially liable for malpractice; and the only ones practicing defensive medicine.

Source: Pacific Research Survey June 24, 2011

U.S. Canada U.K. Sweden New Zealand0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

82%

0% 0% 0% 0%


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Avoid personal financial exposure from “jackpot justice” awards from non-peers

Physicians abhor defending against lawsuits

WHY DO PHYSICIANS PRACTICE DEFENSIVE MEDICINE?

Source: “A Costly Defense” published by Jackson Healthcare September 21, 2011


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82% of Georgia physicians practice defensive medicine

74% of Georgia physicians believe that defensive medicine negatively impacts patient care

95% of Georgia physicians support PCS Proposal

96% Georgia physicians agree that a PCS solution would reduce healthcare costs

WHAT HAVE GEORGIA PHYSICIANS TOLD US?

Source: “The Practice of Defensive Medicine” Oppenheim ResearchJanuary 12, 2012


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DEFENSIVE MEDICINE IS REAL


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DEFENSIVE MEDICINE IS COSTLY


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DEFENSIVE MEDICINE IS PERVASIVE


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DEFENSIVE MEDICINE HURTS EVERYONE


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DEFENSIVE MEDICINE IS REAL


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BUSINESS LEADERS ENGAGED

Atlanta Business Chronicle, 10/21/2013


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Unnecessary tests & procedures

“High risk” patients denied care

• Sometimes referred to as reverse defensive medicine

Physicians cannot afford to admit mistakes

Increased overall cost of healthcare

• Both health plan and out-of-pocket expenses …

WHY DEFENSIVE MEDICINE HARMS PATIENTS?


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›Drives wedge between patient / physician

›Denies access to justice

› <5% of filed cases go to jury

› Patients receive <50% of awards on legal & administrative costs

› 5 – 7 year process

› Stress of litigation…

PATIENTS LOSE IN CURRENT LITIGATION SYSTEM

Source: PIAA, 2011 ReportTowers Watson Study, 2011


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CURRENT SYSTEM IN CRISIS :: ACCESS TO JUSTICE

Summary of Findings: Attorneys require $500,000 of economic

damages to take case Denies any “Access” to anyone that is on

Medicaid, Medicare, Out of Job, elderly, poor, young people

80% of all legitimate medical injuries fall UNDER $500,000

Source: JUSTICE IN CRISIS: Victim Access to American Medical Liability System, 2013

Professor Joanna Shepherd Bailey, Ph.D.Emory University School of Law


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THE SOLUTION

Replace Tort System with an

Administrative Compensation System:

Patients’ Compensation System


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PATIENTS’ COMPENSATION SYSTEMHOW DOES IT WORK?

PCS

Patient Advocate

Medical Review Department

Compensation Department

Administrative Law Judge

Quality Improvement

Department

IndependentMedicalReview Panel

1

2

3

4

5

6

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PATIENTS’ COMPENSATION SYSTEMPATIENT ADVOCATE

1. Patient Advocate

› Helps patient navigate through the system…

1


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PATIENTS’ COMPENSATION SYSTEMMEDICAL REVIEW DEPARTMENT

› Headed by CMO – Physician

› Gathers all pertinent medical records

› Interviews all relevant parties

› Makes prima facie determination of medical injury

› Appoints expert panel…

2. Medical Review Department2


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PATIENTS’ COMPENSATION SYSTEMINDEPENDENT MEDICAL REVIEW PANEL

› Pre-approved physicians and other medical experts

› 3 physicians – if only a physician is involved

› 3 physicians plus 2 other experts if system is involved

› All identifiers of patient and providers are redacted

› RESULT: Rules claim as a “Medical Injury” – “Yes” vs. “No”

3. Independent Medical Review Panel

3


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PATIENTS’ COMPENSATION SYSTEMCOMPENSATION DEPARTMENT

› Total compensation may not exceed total malpractice costs for 2013

› Creates compensation schedule for each type of injury & severity

› Awards compensation if panel says medical injury has occurred…

4. Compensation Department

4


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PATIENTS’ COMPENSATION SYSTEMADMINISTRATIVE LAW JUDGE

› Ensures process is applied in accordance to the law

› Limited appeal of process only…

5. Administrative Law Judge

5


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PATIENTS’ COMPENSATION SYSTEMQUALITY IMPROVEMENT DEPARTMENT

› Records all claims data confidentially

› Shares lessons learned with providers…

6. Quality Improvement Department

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Funded through money in system today

SOURCE OF FUNDS



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MORE EFFICIENT USE OF EXISTING FUNDS

3-5 years

Patient Compensation System

Current System20%

Injured Patients17.5%

Malpractice Costs

180 days 80%Malpractice

Costs

100%Injured

Patients

Source: PIAA, 2011 Report Towers Watson Study,

2011


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All complaints are reviewed

Faster payment of claims – months vs. years

Reduces exposure to unnecessary tests

Guaranteed funds for avoidable medical injury

Increased patient safety

Increases Access to Justice

Injured patients are fairly compensated …

PATIENT BENEFITS


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Physicians will never be sued again … Ever

No personal financial risk

Does NOT assign blame

Safe to admit mistakes

Medical malpractice premiums will decrease …

PHYSICIAN BENEFITS


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Those who profit from the current system where

doctors, healthcare professionals and hospitals are

sued …

• Trial Attorneys

• Medical Malpractice Insurance Companies

WHO IS THE OPPOSITION?

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IMPACT ON MALPRACTICE COST

Categories (Cents per Dollar)

Collected Premium

Paid to Patients

Paid to Defense Attorneys

Administration Costs

Insurance Company Profit

Patient Claims

Patient Awards

Average GA Medical

Malpractice Carrier –

Current Tort Liability

1.00

0.23

0.30

0.17

0.30

2880

864

Patient Compensation

System Alternative

0.92

0.51

0.09

0.17

0.15

4796

1918

Percentage Change

-8.1%

119.8%

-68.9%

0.0%

-50.0%

66%

122%


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Awards may not exceed the fiscal year 2013 aggregate costs of medical malpractice as determined by an independent actuary

Significantly decreases defensive medicine saving billions annually for Georgia families

Medical malpractice rates decrease under predictable PCS model

Georgia taxpayers reap savings which is currently being wasted on defensive medicine and med-mal defensive attorneys

NO INCREASED COSTS


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The bill specifically limits the power of the medical review panel to determining avoidable harm.

No Negligence / No Lawsuit

No blame / No increased reporting

Bill specifically prohibits reporting

Shall provide Medical Board with information upon request

Public Safety Issue: May notify Medical Board of“risk of harm to the public”

NO INCREASED REPORTING


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Two Actuarial Studies :: AON and BioScience Valuation

Peer review by David Frisvold (Assistant Professor, Department of Economics, Emory University) determined the following

Significant decrease in medical malpractice insurance rates & healthcare expenses

Savings to State of Georgia

› $3.1 Billion Medicaid

› $3.8 Billion State Employee Healthcare Costs

$6.9 Billion Total Savings in First 10 years

IMPACT ON GEORGIA



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PCS is a Solution to Completely Replace the Current Tort System

• No more medical malpractice lawsuits

• Strong legal precedent

• Slashes defensive medicine costs

• Eliminates bad press

• Increases access to justice

• Enhances patient safety

• More efficient use of existing funds

• More patients receive more compensation

• No Cost to Georgia Taxpayers …

SUMMARY…

QUESTIONS?

Contact Information:

Wayne W. OliverExecutive Director, Patients for Fair

Compensation

E-mail: [email protected]

Tel: 678-690-7970

mailto:[email protected]

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Senator Brandon Beach & Wayne Oliver's 2013 SLC Presentation

Health & Medicine