Charles Evans: Florida needs bold approach to cut health care costs

The cost of health care and health insurance are among the top concerns of registered voters, according to a new poll released by the Kaiser Family Foundation.

Falling behind only terrorism and the economy, the rising cost of health care is very much on the minds of voters across the country. That’s certainly the case in Florida as we approach the presidential primary on March 15.

Voters want solutions to one of the most expensive items in the family budget and on the corporate balance sheet. While Washington may have failed to provide a solution with the Affordable Care Act, Florida lawmakers are offering a bold plan to reduce health care costs.

A proposal by state Sen. Alan Hays, R-Umatilla, and state Rep. Cary Pigman, R-Sebring, would repeal the state’s broken medical malpractice system and replace it with a no-blame administrative model. Under this model, physicians would no longer need to practice wasteful, defensive medicine.

After 40 years as a hospital administrator, I can say that one of the primary drivers of rising costs can be linked to a doctor’s pen.

Despite efforts at cost containment, hospital administrators have little impact in preventing physicians from practicing wasteful, defensive medicine.

Defensive medicine is a common practice and occurs when physicians order unnecessary tests, procedures and medications in order to avoid being sued. According to a survey of Florida physicians conducted by Oppenheim Research, 88 percent of doctors practice defensive medicine and 69 percent believe that defensive medicine has a negative effect on patient care.

So, why do physicians practice the unnecessary, costly and wasteful defensive medicine?

The answer is to protect them from possible lawsuits. It is almost impossible to reduce costs when doctors believe they must protect themselves with expensive and unnecessary CT scans, blood work, X-rays or MRIs. We can all encourage best practice models and offer incentives to reduce spending, but when a physician’s entire net worth and life savings are on the line, they will continue this wasteful medicine.

BioScience Valuation, a health care economics firm, reports defensive medicine cost $487 billion in the United States in 2015. In Florida alone, the practice costs all Floridians more than $40 billion per year in wasted health care costs.

While other attempts at health care cost reduction have chipped around the edges, this plan would actually save Florida significant dollars — more than $60 billion in public and private health plans over a decade. Tennessee, Georgia, Maine and Montana are considering similar plans.

Under the proposed Patients’ Compensation System, patients who have been injured by a physician would no longer take their case to court. Instead, they would file a claim before an administrative panel of health care experts and an administrative law judge. If the PCS found an avoidable harm had occurred, the patient would be quickly compensated, unlike our current legal system that takes years and compensates very few injured patients.

Patients would be compensated in an amount similar to what they would receive after years in the legal system. This no-blame, administrative model would eliminate the adversarial relationship between patient and doctor and allow physicians to acknowledge their errors without fear of litigation.

During my 40 years of leading hospitals, I can say that the majority of physicians I met have been sued — many under frivolous circumstances. As a result, doctors practice defensive medicine.

Since the 1980s, we in the health care field have lamented soaring costs. In recent years as consumers have had to share more of the burden, they, too, have come to terms with the unsustainable price of health care with astounding premium hikes, co-pays and deductibles.

Adopting a PCS model in Florida would do more to reduce health care expenses than any policy change I have seen in my career. It will make Florida a national leader in doing what Washington has failed to do: make health care affordable and the medical liability system expedient, predictable and healthier for taxpayers, patients and doctors.

***

Charles R. Evans is president of International Health Services and is vice chairman of the nonprofit Patients for Fair Compensation. He retired as president of Hospital Corporation of America (HCA), Eastern Group based in Nashville and held senior hospital executive positions in Indiana, Florida and North Carolina. Column courtesy of Context Florida.