Reforming Defensive Medicine Is Key To Reducing Healthcare Costs

Jeffrey Segal Dr. Jeffrey Segal, Chief Executive Officer and Founder of Medical Justice, is a board-certified neurosurgeon. Dr. Segal is a Fellow of the American College of Surgeons; the American College of Legal Medicine; and the American Association of Neurological Surgeons. He is also a member of the North American Spine Society. In the process of conceiving, funding, developing, and growing Medical Justice, Dr. Segal has established himself as one of the country’s leading authorities on medical malpractice issues, counterclaims, and internet-based assaults on reputation. Dr. Segal was a practicing neurosurgeon for approximately ten years, during which time he also played an active role as a participant on various state-sanctioned medical review panels designed to decrease the incidence of meritless medical malpractice cases. Dr. Segal holds a M.D. from Baylor College of Medicine, where he also completed a neurosurgical residency. Dr. Segal served as a Spinal Surgery Fellow at The University of South Florida Medical School. He is a member of Phi Beta Kappa as well as the AOA Medical Honor Society. Dr. Segal received his B.A. from the University of Texas and graduated with a J.D. from Concord Law School with highest honors. In 2000, he co-founded and served as CEO of DarPharma, Inc, a biotechnology company in Chapel Hill, NC, focused on the discovery and development of first-of-class pharmaceuticals for neuropsychiatric disorders.
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As the 2016 race for the White House heats up, there will be a lot of discussion about the state of healthcare in our country and what needs to be done to make it more affordable.

While we often hear the Affordable Care Act is not working and most Americans don’t support it, what we haven’t heard are concrete solutions that will make health insurance premiums, co-pays and out-of-pocket charges less costly for all of us.

The answer to cost containment in healthcare is to create a solution which reduces the costly practice of defensive medicine.

Doctors practice defensive medicine every day when they order more tests, procedures and medications than are medically necessary. There is only one reason physicians practice defensive medicine: to avoid meritless lawsuits.

In 2010, Gallup surveyed doctors nationwide and found up to one in four healthcare dollars could be attributed to defensive medicine. A survey released earlier this year by the Official Journal of the Congress of Neurological Surgeons found that more than 75 percent of neurosurgeons said they practice defensive medicine to protect themselves from lawsuits.

For example, a patient enters an emergency room with chest pains. His blood work indicates that he is not having a heart attack and the physician determines he likely has a case of anxiety. However, the doctor orders a CT scan, sophisticated electro cardiac studies and other procedures to further check the heart just to protect himself in case of litigation.

BioScience Valuation, a healthcare economics firm, estimates the cost of unnecessary tests and procedures like these – known as defensive medicine — will reach $487 billion nationwide in 2015. These costs are passed along to consumers and taxpayers and increase health insurance premiums.

Five states, however, are leading the way with a policy to slice healthcare costs through the elimination of defensive medicine.

Florida, Georgia, Tennessee, Montana and Maine are seeking to end defensive medicine through legislation that would create a Patients’ Compensation System (PCS). Under this proposal, states would create a no-blame administrative model and eliminate the broken medical malpractice litigation system which frightens physicians into practicing defensive medicine.

Under the proposal, an injured patient would file a claim before a panel of healthcare experts instead of filing a lawsuit which takes years to litigate with uncertain outcomes. If the panel of healthcare experts determined that a patients suffered a medical injury, the patient would be fairly, appropriately and quickly compensated.  

With no need to fear lawsuits, doctors would no longer need to practice defensive medicine. That would save all of us billions of dollars. Healthcare costs would start to decrease, as would health insurance premiums. BioScience Valuation estimates that a PCS would save an estimated $840 billion over 10 years in private and government-funded health insurance programs such as Medicaid and Medicare as physicians stop ordering unnecessary tests and procedures.

The Affordable Care Act did nothing to address defensive medicine nor do anything substantive to make healthcare more affordable. With health insurers seeking premium hikes as high as 53 percent in some states in 2016, something dramatic has to be done to slice healthcare costs. Attacking defensive medicine the way doctors attack and treat diseases may be the only method we have to cure this very costly economic condition.

Segal, a North Carolina neurosurgeon, is CEO of Medical Justice and a board member of the non-profit Patients for Fair Compensation.