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Sep 26

Guest Opinion: Solution to Reducing Health Care Costs Found in Tennessee

wayneoliver2010-002-304xx2592-3888-0-0by Wayne W. Oliver
Originally published in the Nashville Business Journal on September 22, 2016

As Hillary Clinton and Donald Trump meet in three Presidential debates beginning next week, the skyrocketing cost of health care is certain to become a serious topic of discussion for the contenders for the White House.

As Hillary Clinton and Donald Trump meet in three Presidential debates beginning next week, the skyrocketing cost of health care is certain to become a serious topic of discussion for the contenders for the White House.

It is open enrollment season, and many of us are suffering from sticker shock about the rising cost of premiums, co-pays, out-of-pocket expenses and deductibles. The Affordable Care Act has failed to reduce health care costs for employers and consumers. In Tennessee, some health insurance companies are increasing premiums as much as 62 percent.
With no apparent solution offered by either candidate, there is a solution which is now pending before Tennessee lawmakers that would dramatically cut costs for state residents. It would reduce health care costs by reducing wasteful, defensive medicine. Defensive medicine occurs when physicians order more tests, procedures and medications than are medically necessary to prevent themselves from a lawsuit.

BioScience Valuation, a health care economics firm, estimates Americans wasted $487 billion on defensive medicine last year. In Tennessee, defensive medicine costs up to $13 billion annually.

To eliminate such waste, state Sen. Jack Johnson (R-Brentwood) and state Rep. Glen Casada (R-Thompson Station) have proposed legislation to replace Tennessee’s broken medical malpractice system with a no-blame, administrative model similar to a health court or a worker’s compensation system. The bold plan, known as a Patients’ Compensation System, will be considered by the state Legislature again this winter as a Tennessee solution to rising health care costs.

The concept, which is also being considered in four other states, is not tort reform. Instead, it transforms our broken, medical malpractice litigation system.

Under the PCS proposal, physicians would no longer be sued. Instead, when patients are injured, they would file a claim which would be reviewed by a team of health care experts and an administrative law judge. If the panel finds that a medical injury occurred, the patient would receive compensation quickly and would not require a protracted and uncertain legal battle.
Tort reform has been embraced in dozens of states, including high-profile legislation in Texas, Florida and Georgia. While malpractice premiums may have held steady or been slightly reduced, the cost of health care for employers and patients continues to rise. And that is what is hurting our economy.

This summer, the U.S. Department of Health and Human Services reported health care spending per person has reached an average, all-time high — $10,345 for every man, woman and child. It also said that health care spending is growing at a rate faster than growth in the U.S. economy and will continue to over the next decade. Spending is expected to grow 4.8 percent this year, for example.

A recent poll of Tennessee physicians found that 83 percent report they practice defensive medicine. The physicians’ survey conducted last winter by Beacon Research also found that 85 percent of doctors said they would support a PCS plan that would abolish malpractice lawsuits in favor of a no-blame administrative system. And as a result, 64 percent of physicians said this new system would encourage them to stop practicing wasteful, defensive medicine.

Our nation cannot sustain the escalating cost of health care spending. Health care is now one of the leading expenditures in the family budget and is causing many businesses to cease hiring, curtail raises and bonuses or pass along exorbitant costs to employees. It’s time to get a handle on this runaway train that is impacting all our lives. Tennessee can lead the nation with a state-based solution that truly reduces health care costs for all.

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