Medical liability reformheats up
Paul A. Raslavicus, MD
Show me a physician who has not felt the devastating effect of the
medical liability insurance premiums on their lives and on their practices,
and I will show you one who is not practicing in the United States.
We are now in a period in which jury awards, even in our specialty,
frequently exceed $1 million and in which some high-risk specialties
are seeing premiums well in excess of the $100,000 per annum level.
Many of us are finding it difficult to obtain coverage or the limits
of coverage we need.
Reforming the ground rules for medical liability litigation is
a top legislative priority for the American Medical Association,
and it is high on the list of priorities for the College. We are
pleased to see that Congress and the Bush administration are recognizing
that something needs to be done.
In the House of Representatives support is growing for H.R. 4600, the Help
Efficient, Accessible, Low-cost, Timely Health Care (HEALTH) Act of 2002. As
of late July, Rep. Jim Greenwood (R-Pa.) and cosponsor Jim Moran (D-Va.) had
recruited 96 colleagues to cosponsor the bill. This is a good bill; the CAP
supports it and is working for its passage. I thanked the Congressmen by personal
letter and conveyed the College’s support. If passed, this bill could put us
well on our way to sanity. It would accomplish the following:
On June 12, the House Judiciary Committee held hearings on the HEALTH
Act of 2002, and the committee set a September date to mark up the
legislation. That means as of Labor Day, when Congress was to reconvene,
the progress of this bill will have shifted from simmer to sizzle.
- Establish a reasonable limit ($250,000) for noneconomic damages,
while placing no limits on economic damages.
- Establish a three-year statute of limitations (except for minors).
- Establish mechanisms to ensure that only justifiable punitive
damages are paid, with a guideline to limit punitive damages to
two times economic damages or $250,000, whichever is greater.
- Structure settlements to be paid in increments rather than lump-sum
payments, so that expenses are reimbursed as they occur and earnings
as they would have accrued.
- Establish procedures to ensure that defendants pay damages in
proportion to their fault.
- Establish a decreasing scale for attorney con-tingency fees
to discourage frivolous -lawsuits.
In July, Rep. John Conyers Jr. (D-Mich.) and leading House Democrats
asked the General Accounting Office to review malpractice insurers’
financial statements and other documents to assess what role declining
investment income and underwriting practices might have played in
rising malpractice insurance premiums. Also in July, Sen. John Ensign
(R-Nev.) introduced S. 2793, a companion bill to H.R. 4600, which
brings the HEALTH Act of 2002 before the Senate.
In mid-July, I heard Health and Human Services secretary Tommy
Thompson articulate to some 50 medical specialty society presidents,
at our AMA-sponsored annual summer meeting, the administration’s
concerns about the medical liability crisis. The following week
the HHS secretary released a comprehensive report titled "Confronting
the New Health Care Crisis: Improving Health Care Quality and Lowering
Costs by Fixing Our Medical Liability System." This important document
transforms the climate of discussion from one of physician "errors"
leading to bad outcomes and lawyer greed and unscrupulousness to
one of protecting patient access to care and limiting government
expenses. The old axiom that there is no such thing as a free lunch
is operative here as well; eventually Medicare and all the inhabitants
of this land pay for this lottery to riches for the few.
One day after the HHS report was released, Paula Szypko, MD, vice
chair of the CAP Government Affairs Committee, participated in a
roundtable on medical liability with president George W. Bush, Tommy
Thompson, and AMA president-elect Donald Pal-mi-sano, MD. Dr. Szypko
spoke about a lawsuit concerning an autopsy that resulted in unreasonable
damages, and on how defensive medicine works against effective patient
care and effective peer review. President Bush made special reference
to Dr. Szypko’s remarks at a speech he gave later that same day.
By the time you read this column, September will have arrived,
and Congress will be back in the Capitol. It will be time to build
on the momentum that has been created. While federal liability reform
has failed in the past for a number of reasons, prospects are improving.
Physicians are hurting and patients are hurt by the present system.
The HEALTH Act of 2002 can work because it is modeled on a California
law that has worked well for nearly three decades. It was enacted
in circumstances much like those we face today. California suffered
a meltdown of its health care system in the early 1970s and physicians
saw their premiums soar more than 300 percent. Liability carriers
left the state and some physicians closed their office doors. The
Medical Injury Compensation Reform Act, or MICRA, which came into
effect in 1976, provided a $250,000 limit on noneconomic damages,
unlimited economic damages, a statute of limitations on claims,
sliding-scale limits on contingency fees, advance notice requirements
before claims were filed, binding arbitration of disputes, and periodic
payment of future damages.
The effect of this legislation was dramatic. The average liability
premiums decreased 40 percent in the 25-year period ending in 2001
(expressed in constant dollars). In 2001 the Medical Liability
Monitor published data that demonstrated that the average premium
paid by California physicians practicing internal medicine, general
surgery, and ob/gyn ranged from 43 percent to 51 percent of the
average premiums of their counterparts in Florida, Illinois, New
York, Texas, and Michigan. This was supported by a 53 percent lowering
in the dollar amounts of settlements in California as compared with
the nation as a whole.
Our current liability crisis is not one of increasing claims frequency
but one of judgment amounts. Patients are not eager to sue their
doctors. In fact, in 1991 the New England Journal of Medicine
reported that only 1.53 percent of those injured by possible medical
actions even file a claim. Severity is the problem, and severity
is what the HEALTH Act of 2002 is designed to address.
We have a window of opportunity this fall. Prepare to participate
in the debate. Counter resistance to medical liability reform with
facts. One excellent resource for facts and background is the Health
Care Liability Alliance, a broad-based coalition for reform. You
can find the alliance at www.hcla.org;
it’s well worth your time. If you are a member of the CAP’s grassroots
program, PathNet, watch your e-mail and be prepared to call and
write to your representatives and senators when the CAP alerts you.
The College has a toll-free number that PathNet members can use
to connect to federal lawmakers from anywhere in the U.S. at any
time, Also, check out the remarkable AMA Grassroots Action Center
Contact your legislators to let them know how important it is for
them to support the reasonable and reasoned approaches to reform
the medical liability scene, as exemplified in H.R. 4600 and S.
2793. You will sleep easier if you do.