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Two Studies Find Replacing Georgia’s Liability System Would Save State Taxpayers Nearly $7 Billion

Georgia taxpayers could save nearly $7 billion within 10 years if the Legislature replaced the state's medical malpractice system with a no-blame, administrative Patients' Compensation System (PCS), according to two studies by the healthcare economics firm BioScience Valuation.

One study found that Georgia taxpayers could save $3.1 billion in Medicaid costs during the first decade of a PCS. In addition, taxpayers would save an additional $3.8 billion over 10 years in the State Health Benefit Plan which insures almost 700,000 state employees, according to the second study. Each study was peer reviewed and affirmed by a scholar at the Economics Department at Emory University.

"Georgia is in a horrific financial bind due to escalating healthcare costs, primarily due to Medicaid," said Wayne Oliver, executive director of Patients for Fair Compensation. "This is an astounding savings that policy makers under the Gold Dome must take into consideration as they examine the PCS proposal and its multiple benefits for Georgia."

The Georgia Senate is considering Senate Bill 141 which would replace the current medical liability system and replace it with a no-blame, administrative PCS. Doctors and hospitals would no longer be sued and harmed patients would instead file claims before a panel of medical experts. If the panel deemed a "medical injury" had occurred, the patient would have their claim sent to a compensation office for compensation - and at an amount no different than under the current legal system.

A report late last year compiled by BioScience Valuation and reviewed by David E. Frisvold Ph.D. of the Department of Economics at Emory University found that under a PCS, physicians would change their behavior when it comes to the practice of defensive medicine, or ordering unnecessary tests and procedures than are medically necessary to keep from being sued. Yearly savings for Georgia taxpayers for the state Medicaid program would start at $36 million annually and grow to $380 million annually after the first five years, according to BioScience Valuation.

When it comes to the State Health Benefit Plan, which insures almost 700,000 state employees, retirees and their families, the savings for state taxpayers would start at $40 million annually and grow to $460 million annually after five years.

"These are real dollars that lawmakers could use to help prevent drastic cuts to the state budget," Oliver said. "Better yet, it could even go to help pay for raises for state employees or other neglected items in the state budget."