The think tank that developed the Health Savings Accounts is proposing that contracts replace lawsuits to compensate injured patients. These contracts would disregard fault and mandate full disclosure, while accounting for patient compliance and varying degrees of risk.
“To protect against lawsuits, doctors purchase malpractice insurance, which carries very high premiums,” says Sean Tuffnell, a spokesman for the National Center for Policy Analysis in Washington, D.C. “Total cost of the medical tort system is estimated between $129 billion and $207 billion. Most of these costs are passed on to all patients.
“A reformed system should compensate every patient fully who is harmed by a medical error, minimize the cost of determining compensation, and encourage health-care providers to act in ways that reduce the frequency of error.”
Voluntarily negotiated contracts would fulfill those goals while allowing hospitals, doctors, their insurance companies, and patients to completely opt out of the court system, the NCPA explains in a 40-page report. A typical contract would:
- Set the amount of compensation in advance that a provider would pay in case of an unexpected death. It would use the state’s workers’ compensation system to set rates for injuries, without as-sessing fault or neglect and without linking blame to the amount of payment.
- Reduce compensation amounts for high-risk patients and for high-risk procedures.
- Require providers to disclose such data as mortality rates for specific surgeries and require patients to disclose such information as their full menu of medications.
- Link full compensation to patient compliance with diet restrictions, medication schedules, and other provider directives.
“Instead of buying malpractice insurance, physicians would essentially be purchasing short-term life insurance on all patients, say, undergoing surgery,” said NCPA Policy Analyst Pam Villarreal, who co-authored the report.
“Under this system, insurers would have a strong interest in monitoring how doctors practice medicine and would price their policies accordingly. Bad doctors would largely be priced out of the market.”
For the full report, visit www.ncpa.org/pub, and look for Policy Backgrounder No. 163.