Want to fix healthcare? Make losers pay
Originally published 08/09/2009 in The State Newspaper
It is no secret that America's health system is broken. As a nation, we spend nearly twice as much on healthcare as Canada. Those with insurance receive safe, quality healthcare, while the uninsured, underinsured, and illegal aliens go without or misuse emergency rooms for basic care. Medicare and Medicaid don't come close to covering the cost of services the government guarantees its recipients. Those with private insurance are overcharged to cover the cost of all of those above.
Yes, our system is broken, but there's a dirty little secret silently consuming massive amounts of precious healthcare resources. That secret is defensive medicine. Here's an example.
A wife brings her husband to an emergency room (ER). His face is numb, his vision is blurred and he has a splitting headache. An ER physician sees him immediately and orders an expensive CT scan. Thirty years ago, a physician would have given the man pain medication and observed him for 30 minutes, knowing a migraine headache was the likely diagnosis.
Today, however, even though there's a less than one percent chance the man has a serious condition, the ER physician orders an expensive test. He knows even the slightest delay in diagnosing a statistically unlikely condition opens the door to costly legal action. He doesn't want to be sitting on a witness stand answering the question, "Why didn't you run the test immediately?"
In most countries, no expensive tests would have been ordered. Unlike the United States, there's no need to practice defensive medicine. To put this into perspective, on a busy night, Spartanburg Regional ER physicians order 110 CT scans. About 20 are medically necessary. The other 90 fall into the category of legally necessary.
Here's a second example. A lawyer files suit on behalf of a 47-year-old woman who claims that while visiting an emergency room, she fell off an exam table and lost her unborn child. She alleges a cover-up. Her story makes headlines. Her medical records, reviewed by her attorney, show that she has had three psychiatric admissions fantasizing that she is pregnant. They also document she's had a hysterectomy and is incapable of conceiving. The suit goes to court anyway, costing the hospital more than $50,000 to defend. Subsequently, the hospital issues a policy that no female patients in the ER can be unattended. The policy requires six additional nurses be hired. Other ERs increase their staffing to avoid a similar lawsuit.
The cost of ER care rises exponentially.
It is estimated that as much as 30 percent of all medical care is rendered to protect providers from patients. That means five percent of our gross domestic product is spent not on medical care, but on medical-legal care, a tremendous waste of resources.
I'd like to offer a solution. It is a system called "loser pays" in which the losing side in a legal action pays the legal expenses of the winning side. It is no coincidence that countries around the world with loser pays systems pay far less for healthcare than we do.
Contrary to popular belief, many hospitals and doctors willingly take responsibility for mistakes they make. Spartanburg Regional, along with other South Carolina hospitals, has a policy of informing patients when a harmful mistake is made and encourages them to get an attorney. It's called "Sorry Works," and has been instrumental in decreasing our medical payout ratio over the past eight years to only 56 percent of what our insurance company predicts it should be.
Loser pays is similar in concept to automobile liability insurance. If an accident is your fault, you pay. Senator Lindsey Graham supports a form of loser pays. Many attorneys support a system of loser pays. Sadly, all do not, since the largest national political campaign donors are trial lawyer groups. This lobby has huge influence over our state and national politics and our pocketbooks!
Read the ads in the yellow pages of the phone book, watch the commercials on court TV and read the back of the bus benches near a hospital. Phrases like: "If you have been injured at work or home" and "We"ll meet with you in the hospital" encourage people to attack the very system charged with protecting the public's health. And yet, by eliminating the practice of medical-legal care we could fully fund a national health coverage plan. Imagine that!
Loser pays is a concept the rest of the world has embraced. Why not South Carolina? Why not America? Want to change the healthcare system? Contact your state and federal representatives. Tell them that loser pays has to be a part of any health care reform.
Ingo Angermeier is Chairman of the Board of the South Carolina Hospital Association and President and CEO of the Spartanburg Regional Healthcare System.
- 09-08-2009 12:00 (EDT)