Healthcare Reform in 2009

The Problem:

The high profile issues in healthcare include rising demand for services, wide variations in quality of care, and patient safety. Each prong has a cost. With unlimited funds, these concerns could all be addressed. The question is how to address these concerns with finite resources.

Drivers of Physician Behavior:

The physician's most powerful tool is his/her pen. The following factors drive decisions:

1. Concern for patient welfare.
2. Optimize revenue potential.
3. Real or perceived fear of litigation. Often used to justify clinical decisions.

How Exposed Are Physicians to Litigation:

Nationally up to eighty percent (80%) malpractice lawsuits result in zero payment to plaintiffs. However the relatively low success rate of claims against physicians has not deterred medical malpractice litigation.  The aggregate number of physicians who have been sued in their career is high. If a physician is lucky enough to have practiced without being sued, that physician certainly has friends and colleagues as defendants in medical malpractice claims.  All of this medical malpractice litigation has a direct impact upon the practice of medicine in the United States.  Physicians who have been sued engage in behaviors to minimize the likelihood they will sit in court in the future. These behaviors are pervasive, expensive and provide little, if any, value to the patient.

Solution:

The solution takes advantage of the assertion that expensive, defensive medicine can be curtailed if the perceived fear of litigation is diminished. More importantly, the emotion associated with being sued can be turned into an advantage, persuading physicians to conform to efficient best practices. Those savings can be redeployed to further many laudable goals.

HealthCare 2.0:

Program developed by Medical Justice Corp. that contractually links patients, physicians, hospitals, and the payer. Each party gives up a little to obtain much more.

• Patients transfer their potential future right to sue for negligence to the payer (or more likely, a neutral third party). In exchange, they receive lower healthcare premiums. They might also receive subsidies for disability or life insurance premiums to provide a no-fault remedy should they be injured. Finally, patient-safety systems are mandated in contracted hospitals / physician's offices.
• Physician is effectively immune from lawsuit if he follows cost-effective algorithms for patient care. This immunity will decrease his professional liability premiums to 25% of current levels.
• Physician can still be disciplined by credentialing committee and/or licensing board for pattern of substandard medical practice.

What Interests Does HealthCare 2.0 Further For Payers?

Payers, including self-insured entities and the government, are looking for ways to increase value to their insureds. This means more than merely lowering cost. It means promoting more consistent, integrated, reproducible care, as opposed to idiosyncratic, fragmented treatment. HealthCare 2.0 is a bottom up approach that brings all stakeholders to the table, putting all parties in a collaborative position to create value for all.

Savings can be used to:

• Provide additional benefits to insureds in the form of disability and life insurance.
• Implement information technology systems for physicians and facilities
• Promote patient safety and positive health outcomes
• Increase physicians take-home pay by dramatically lowering their professional liability premiums

The program is physician friendly, and will serve as a magnet to increase the number of participating physicians. More importantly, when a critical mass of physicians has enrolled, virtually all should follow. The reason: Individual physicians will not want be long-term members in a decreasing cohort exposed to potential litigation.

Do The Economics Work?

Medical Justice contracted with experts in healthcare financing issues, BioScience Valuation to perform extensive modeling using Monte Carlo simulations. HealthCare 2.0, as an assumption driven model, is financially viable.

Next Steps:

Design and execute a pilot program:

• In a vertically integrated healthcare system;
• In collaboration with a geographically concentrated self-insured employer;
• In collaboration with an innovative insurer with market dominance in a low-population state.

Based on results of pilot program(s), plans for expansion would follow.

About Medical Justice:

Medical Justice has protected physicians from frivolous lawsuits since 2002. Endorsed by many medical professional societies, Medical Justice is also a member of the Center for Health Transformation, a bipartisan organization focused on healthcare solutions embracing system-wide transformation. Medical Justice has an extensive intellectual property portfolio rich in such solutions. For more information, contact Jeffrey Segal, MD, or call 336-691-1286.