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How to Keep Health Care From Being Sued out of Existence Dave Eberhart, NewsMax.comThe soaring cost of medical lawsuits is leaving some parts of America without health care. One state has a successful solution that could ease the problem nationwide, but powerful interest groups are ready to fight.
In one recent skirmish in the battle over tort reform, President Bush blasted, "What we want is quality health care, not rich trial lawyers.” Sen. John Edwards, D-N.C, a trial attorney whose lawsuits against doctors and insurance companies helped make him a multimillionaire, claimed that medical lawsuits were not driving up health care costs. Circling the fray and playing a role perhaps best described as Florence Nightingale meets "M*A*S*H" is the American Medical Association. Like the TV sitcom, which fought the Korean War for a decade, AMA has been lobbying for years to persuade Congress to put a tourniquet on overzealous jury awards in malpractice cases. Recently AMA brought reinforcements to the front by announcing a $15 million campaign to capture the minds and hearts of Congress and the American public. The professional association has identified a dozen states it says are in a medical malpractice ‘‘crisis.’’ The prescription: Have Congress impose a $250,000 cap on non-economic damages as well as limits on attorneys’ fees in malpractice case. ‘‘This is something that isn’t just affecting the economics of medical practices. In certain areas, it’s affecting the very existence of medical practices,’’ said Richard Corlin, M.D., past president of AMA. Meanwhile, opposing forces such as Association of Trial Lawyers fight back with their own message. ‘‘[T]hey are wrong to think that the solution is to penalize people who have had their wrong leg cut off or the wrong side of their brain operated on or their breast cancer misdiagnosed, which is exactly what their proposal would do. It punishes the victim,’’ said Carlton Carl, spokesman for ATLA. But many commentators suggest that the issue is more complex than the slogans suggest. One theory is that embattled doctors are paying for the laissez-faire pricing of medical-malpractice insurance. In the 1990s, medical-malpractice insurers began cutting their rates to attract customers and capital to invest in the then-lucrative financial markets. High returns on investments subsidized the doctors’ premiums. Without regulation, however, premiums sank to a point as to be unable to cover the bills when the financial boom fizzled. An article in the Wall Street Journal explained the origin of today’s insurance crisis as owing to a "price war” in which "shortsighted price slashing led to industry losses of nearly $3 billion last year.” One example cited by the Journal: St. Paul Cos. stopped selling medical-malpractice coverage after suffering a $980 million loss. The company had insured more than half of Nevada’s 240 obstetricians. In Las Vegas, 90 obstetricians simply stopped taking new patients. So What Is the Cure? California prides itself on its handling of the dilemma. In recent Capitol Hill testimony, Danielle Walters, executive vice president of Californians Allied for Patient Protection, described the medical liability insurance crisis that gripped California in the early 1970s. "Liability premiums soared more than 300 percent, numerous medical liability carriers left the state completely and many physicians – particularly high-risk specialties such as obstetrics and neurosurgery – were forced to close their doors because they were either unable to get insurance or unable to afford the inflated rates.” Then came the state’s Medical Injury Compensation Reform Act of 1975, which included such provisions as:
No one can dispute Walters’ testimony that today California has a healthy and competitive medical liability insurance market and some of the lowest malpractice premiums in the United States. "When you compare California to other large, diverse states, physicians in California pay one-half to one-third of what their colleagues pay for the same liability coverage,” she told Congress. Why Not Copy This Success? So, if it is as easy as that, why haven’t all the states – never mind the feds – copied the California formula? It goes without saying that the special interests work to keep that from happening, but according to National Underwriter Co., simply copying the MICRA statutes would get a well-intentioned state legislature only halfway home. "The other half of the explanation [of the California success] lies in the dozens of court cases decided by the California Courts of Appeal and Supreme Court during the 27 years since MICRA was enacted – court cases that have fleshed out the all-important details of MICRA.” Attorney Victor E. Schwartz of Partner Shook, Hardy & Bacon agrees. In testimony on Capitol Hill he summed up the legal minefield waiting to vaporize legislation. "[W]hen States have passed balanced medical malpractice reforms, they have been nullified by state courts under obscure portions of very lengthy and prolix State Constitutions.” Perhaps the best solution: a revised version of MICRA in which the all-important details are addressed in the text of the statutes and not left to the interpretation of the courts. But even this apparently fail-safe plan is flawed, say tort reform’s glib opponents, such as Sen. Edwards. These perennial doomsayers profess over and over that lawmakers who enact tort reform should not expect insurance rates to drop. Joanne Doroshow of Center for Justice & Democracy, a group that opposes tort reform, cites a study, "Premium Deceit – the Failure of Tort Reform to Cut Insurance Prices.” At the heart of the paper is this announcement: "[T]he insurance industry never promised that tort reform would achieve specific premium savings.” "We would like to thank the insurance industry for finally admitting what is already obvious: that they have not cut, and have no plans to cut, insurance premiums for doctors, hospitals or other businesses as a consequence of ‘tort reform’ – restrictions on consumers’ rights to sue wrongdoers in court,” said Doroshow. Even if true, would insurance premiums not rise even more without tort reform? How One American Industry Was Saved From Lawyers
Despite such fighting words, experts point out that tort reforms can work and history proves it. The California success story aside, there is the case of the General Aviation Revitalization Act, signed by then-President Bill Clinton in 1994. In recent Hill testimony, attorney Victor E. Schwartz of Shook, Hardy & Bacon described how tort litigation was driving the general aviation industry out of business. Key players such as Piper and Cessna simply stopped producing planes. With tort reform stability came back to the industry, according to Schwartz. "Those companies are now back in business. Over 25,000 jobs have been created,” he pointed out. But what if commercial insurers were to reap and hold profits that arose from tort reform? One answer: The Federal Risk Retention Act would provide a vehicle to cut the windfall grabbers off at the pass. Under the long proposed legislation, doctors’ groups form their own insurance pool or insurance purchasing groups to shop among commercial insurers for a better price. At the end of the day, most internecine battles feature more intransigence than rationality and can wreak significant collateral damage. Lawyers Have One Party in Their Pocket
Case in point: Though Republicans and Democrats agree on the need for a terrorism-insurance law, Republicans want to tack on limits on tort lawsuits. However, the powerful trial lawyer bloc opposes them, and it has plenty of allies in the Democrat-controlled Senate. It is raw testimony to the nettlesome nature of the issue that key "wartime” legislation that should have been a slam-dunk is in fact stalled.
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