Business Tennessee recently spoke with Charles R. Handorf, M.D., President of the Tennessee Medical Association. Handorf is a Memphis pathologist who is affiliated with Duckworth Pathology Group and is the chairman of the Department of Pathology & Laboratory Medicine at UT College of Health Sciences—Memphis.

BTN: You’ve described the medical-legal environment as“toxic” in Tennessee. Talk about the need for medical liability reform.

Handorf: When I speak of the environment being “toxic,” I’m talking about the whole process that’s in place for dealing with matters of alleged medical malpractice. But I’m actually also in a way referring to a much broader situation. Our current tort system is bad for doctors, bad for patients, bad for business, bad for our communities. The only one it’s really good for is the trial bar. In 2004 in Tennessee, 87% of the medical malpractice cases were either settled in favor of the defendants, or dismissed, or the defendants were found not culpable. Only 13% resulted in settlements for the plaintiff. That is a remarkably inefficient system for dealing with medical malpractice. People who have fallen victim to medical malpractice deserve redress. But the system that we have is perverse.

BTN: What about the effect on doctors as professionals?

Handorf: Our brothers in the legal professions use that statistic of 87% and argue they don’t know what doctors are complaining about since most of the time it works out in a doctor’s favor. Well, to be sued for malpractice is an emotionally draining experience. It’s an extreme personal attack on the person’s abilities, and the toll that it takes on physicians cannot be overlooked. If you ask Roland Gray who runs the Tennessee Medical Foundation, the organization that deals with physicians with mental, emotional or substance abuse problems, he’ll tell you it’s extremely common for a sued physician to go into a period of depression, turn to substances, or suffer broken relationships. So that’s also what I mean by “toxic”—it’s personally toxic.

BTN: How does Tennessee compare to other states?

Handorf: In states with good tort systems, business thrives because the irrational risks are taken out of doing business. We all have risks in life, but we want to manage those risks. When you have a lot of unmanageable risks, however, that makes an unpredictable environment, and it’s bad for business in general. More toxicity. [Tennessee’s system] is not even good for patients. The awards they receive are oftentimes 50% less by the time they pay all related bills. If we had a system whereby patients could be compensated for their real damages in a real way, and then a reasonable amount for “pain and suffering,” we’d be very happy with that.

BTN: Is there empirical evidence of the damage wrought on the state as a result of the lack of tort reform?

Handorf: In the last four years, the Tennessee Health Services Development Agency has closed I think 11 obstetrical services in the state. People cannot get obstetricians or family practice doctors trained in obstetrics to deliver babies anymore in small communities because they can’t make enough money to cover medical malpractice insurance. Mothers are no longer able to deliver babies in their communities—they have to go 50 or 100 miles away. That’s not good for business either—imagine a smaller community that doesn’t even have a hospital that can deliver babies trying to attract a manufacturing plant.

BTN: What is the current state of proposed reform legislation on Tennessee’s Capitol Hill?

Handorf: We made a lot of progress in bringing the whole issue of medical liability reform to the attention of the legislators. But let’s face it: there are two physicians in the Tennessee state legislature—I don’t know how many lawyers. So we have a big uphill climb, especially since a number of those lawyers have close ties to, or are members of, the tort bar. We started doing something this year that we hadn’t done before that we are going to continue to do year after year until we get some reform. Every Tuesday we have between 40 and 60 physicians attendng the committee meetings of the legislature wearing their white coats. That got us noticed. It’s clear to those legislators why we’re there. Some of them ridiculed us, some made snide comments about us, but the fact is, they were discomforted by the fact that we were there and watching them.

BTN: Aren’t many lawmakers simply of the opinion that this is about doctors wanting to drive down the malpractice premiums they pay?

Handorf: This is about access to patient care. It isn’t about some doctor’s malpractice insurance premium. We didn’t get [reform legislation] out of committee in either the House or the Senate, but we came within one vote in the Civil Practices Committee. We’re going to get closer and closer until they can’t ignore it anymore and they have to deal with it.

BTN: When do you think things are going to change?

Handorf: This is not a one-year or two-year deal. In Missouri, for example, it took over 10 years. Tennessee is really only two years into this effort, and as long as the business community, the hospital community and the insurance industry remain aligned together on the issue, something will happen. How many times on how many issues have the doctors, the hospitals, the insurance companies and the business community all been aligned on one issue? I can’t think of any other issue.

BTN: Discuss the effects of TennCare cuts on the physician community.

Handorf: The cuts have been devastating because these patients didn’t disappear—they just now are showing up with no ability to pay for anything. The [federal disproportionate share payments] are a great thing, but unfortunately not one penny of them goes to doctors—they go to hospitals. The TennCare bureau is trumpeting the great 2.5% increase that we’re going to get this year, although we haven’t had an increase in five years. And the cynics out there know that they have us where they want us in a way because we’re going to take care of sick people. We’re not like lawyers who won’t take care of people with nothing in their checking account.

BTN: Is there a component of this that isn’t immediately apparent when scrutinized by the average Tennessean?

Handorf: What people don’t understand is that doctors don’t set their own prices. The insurance companies tell us what they’re going to pay us—take it or leave it, and the government tells us what they’re going to pay us—take it or leave it. We are the only ones in the business community who have this screwball reimbursement mechanism where we have no power to set our prices. Doctors are the complete negative of antitrust; it’s the whole world around us that should be looked at for antitrust violations. We’re helpless. So having a lot more uncompensated care to give has been devastating to many medical practices in Tennessee. I hope what Gov. Bredesen has devised in his new Cover Tennessee program will help with this issue.

BTN: Are your concerns being heard?

Handorf: The administration listens to us, which is a good thing, but I’m not sure how much of that actually plays into the implementation, though a dialogue is a wonderful starting point. But still I don’t think the world at large understands what our problems are.

BTN: Comment on the proliferation of urgent care walk-in clinics, or minute clinics, in retail settings across Tennessee and the nation.

Handorf: It isn’t that we’re necessarily opposed to it because we’re going to all have to think about different delivery systems in the future. We have a huge population of people coming into the later phases of life who are going to need a lot of health care, and we have to be open about how that’s going to work. Our fear is that Wal-Mart or Kroger or whoever else in this business is going to look at this as another commodity. And health care is not a commodity. Taking care of a sick person is a much more complicated interaction than selling a pair of shoes or a head of lettuce. And we’re very concerned that those kinds of models haven’t quite integrated into the bigger health care picture.