"It is important to explore the viability
of an administrative system similar to the Workers' Compensation
system... At present, the practice of defensive medicine inflates
the cost of health care to cover the inflated cost of malpractice
insurance. This needs to change."
JMI Policy Director Robert F.
Tallahassee, Nov. 16, 2011-The James Madison
Institute today released a study in partnership with Patients for
Fair Compensation. Titled "Alternative Solutions to Florida's
Medical Malpractice System" the report details the negative impact
on patient care due to the practice of defensive medicine. Citing
case law and recent quantitative studies, the JMI report reveals a
Florida tort system that is deeply flawed, one wherein only a
handful of injured patients receive compensation, where malpractice
cases take years to resolve, and damage awards are inconsistent.
The report suggests that far from promoting patient safety, the
current tort system discourages accurate medical error reporting
among healthcare providers, as doctors try to protect themselves
against the constant threat of litigation. The study also outlines
an alternative plan that could provide the basis for the Florida
Legislature to act during its 2012 session, which convenes on
A recent survey suggests that Florida doctors' spending on
defensive medicine - the practice of ordering medical tests,
procedures, and consultations of doubtful clinical value to protect
themselves against malpractice suits - could run into the billions
of dollars. Defensive medicine is a hidden driver of healthcare
costs, responsible for, by some estimates, as much as 26 percent of
overall healthcare spending. The JMI study proposes a policy
approach that aligns the interests of patients and their
physicians, reduces costs, and optimizes quality healthcare.
A recent Kaiser Foundation report noted the annual cost of an
average family's health insurance now exceeds $15,000. Though
recent tort reform resulted in a decrease in the cost of medical
malpractice insurance, this did not directly decrease the cost of
care in Florida. There is still no mechanism in place to mandate a
reduction in patients' healthcare costs-even when the provider
realizes reductions in expense. Further, there is little evidence
to suggest capping damages decreases a doctor's likeliness to
practice defensive medicine.
Creating a patients' compensation system as an alternative to
the courts could benefit patients who have been the victims of
medical errors. It could take less time to resolve issues than
Florida's courts, which are currently jammed with cases related to
foreclosures. It could also direct a greater share of any financial
settlements to the victims and less to court costs, attorney fees,
and other litigation expenses.
Under the patients' compensation system, malpractice claims
could be reviewed by a medical review board overseen by a special
administrative agency, instead of clogging up Florida's courts.
Victims of medical malpractice would be awarded compensation by a
patient's compensation board. An entity akin to a quality
improvement council would analyze the root causes of medical errors
and establish standards for best practices. Florida's Medical
Licensing Board would discipline those who provide substandard
care, and the entire system would be funded
by existing insurance premiums from all
"The JMI report clearly demonstrates the need for a more
efficient, effective, and equitable solution for Floridians. I
believe the JMI report made a compelling case for a Patient's
Compensation System, a system that would address the issues
surrounding malpractice without enduring costly, time-consuming and
ultimately ineffective tort reform," said Rick Jackson, chairman of
the nonprofit organization Patients for Fair Compensation.
Such a system could mean that patient complaints could be heard
by neutral medical experts and settled and paid promptly. This
alternative would greatly diminish the need for defensive medicine.
That, in turn, would almost immediately drive down the cost of
healthcare - not only for employers and individuals who pay for
health insurance, but also for Floridians whose taxes help to
provide the health care for low-income residents enrolled in
Under a patients' compensation system, an administrative agency
could facilitate innovation in the healthcare industry,
concurrently improving the quality of care and physician
accountability. Unfortunately, the courts, by their very function,
cannot do this under the best of circumstances, and - given their
current heavy caseloads - the current circumstances are far from
the best. Accordingly, as the study demonstrates, it is time to
create an alternative.
"Alternative Solutions to Florida's Medical Malpractice
is available on-line at www.jamesmadison.org. To comment or request a
Tanja Clendinen at 850.383.4633 or Tanja@jamesmadison.org.
Download the whitepaper