Reader Provides a Market Perspective
The fall issue of the AANS Bulletin covers in depth the medical liability topic from federal and state, as well as personal perspectives. The highlighted issues are as diverse as they are complex. Additional perceptions may be valuable.
The article “Medical Malpractice” by Studdert and colleagues in the Jan. 15 New England Journal of Medicine provides a complementary background on which to reflect the specialty-specific concerns regarding medical liability. The authors document that “The latest tort crisis is characterized by…dramatic increases in payouts to plaintiffs since 1999…lower levels of confidence and trust in the healthcare system among patients….”
This lower level of confidence and trust in the healthcare system is reflected not just in the number of patients filing claims (this apparently has not changed significantly in the last several years), but by the mood of juries (as implied by larger jury awards).
Measuring the degree of trust experienced in a society is difficult. Here, the fields of medicine and law provide one venue for assessing it. The arena of medical liability seems to provide some clues as to where this relationship stands. Based on Studdert’s article, it seems that a dramatic negative shift in societal trust has occurred, other factors notwithstanding, and this finding is well-supported by the personal stories in the Bulletin.
Along a parallel line, the year 1999-2000 represents an economic and financial “top” as measured by key stock market indexes. For example, the Kondratieff’s 50-year cycle has seen its peak. It represents a cycle of business credit expansion and contraction. With this metaphor in mind, we may view credit as trust. It appears that major credit contraction is under way, not just a fiscal one but a human one as well. Similarly, the Elliott Wave analysis, an index based on societal sentiment and psychology driving the markets, also peaked in January 2000.
From this framework, it can be anticipated that the medical liability crisis will likely worsen in the coming years, as cycle analysis indicates that we are far from the bottom of negative societal mood, business credit contraction, and the stock market “bear.”
— Ivo P. Janecka, MD, MBA, FACS, Tampa, Fla.
For More Information
Casti, J. “I Know What You’ll Do Next Summer.”
New Scientist. 2002 Aug 31, 29-32.
www.newscientist.com
Gordon, I. “The Kondratieff Winter.” Financial Sense. www.financialsense.com/transcriptions /gordon.htm
Orrico, K. “Federal Medical Liability Reform.” AANS Bulletin. 2003 12(3), 6-20. www.AANS.org, Article ID 13303
Prechter, R. & Frost, A. Elliott Wave Principle. Gainesville, Ga.: New Classics Library, 1984.
Studdert, D. et al. “Medical Malpractice.”
N Engl J of Med. 2004 Jan 15;350(3) 283-292.
https://content.nejm.org/content/vol350/ issue3/index.shtml
2004 Holds Promise for Progress
The issue of spiraling professional liability insurance rates exploded on the national stage in 2003 in a way that finally captured the attention of the American public. The nature of the crisis has become increasingly clear to the average person, and polls show that more than 70 percent of Americans want tort reform.
As a result, several states in which skyrocketing liability insurance premiums were front-page news took unprecedented steps to rein in lawsuits. The momentum toward vital medical liability reforms will continue in 2004 because state legislatures are beginning to act early rather than wait for a full-blown health crisis.
Texas best demonstrated the power of public support for reforms in 2003. In a landmark vote, Texans decided to change their state constitution to allow the legislature to put a cap on damages in lawsuits, particularly the subjective noneconomic damages (“pain and suffering”) that are driving up jury awards and insurance premiums.
Other states moved forward as well. The Idaho legislature, in a bold example of leadership, took the preemptive step of lowering the state’s noneconomic damages cap before a crisis could hit. Arkansas and West Virginia, two states where shuttered medical practices and hospital wards had sometimes forced residents to drive into nearby states for healthcare, also enacted solid tort reform.
These legislative actions were based on the realization that the cost of professional liability insurance is primarily determined by the insurer’s loss experience. Insurers in states that do not limit the amount of money a jury can award a plaintiff for intangibles, such as pain and suffering, face a greater risk of a large award Additionally, the possibility of a large award provides an incentive for patients and lawyers in these states to file claims of dubious merit in an attempt to hit the jackpot.
Nationally, nearly 80 percent of claims are ultimately determined to be without merit, but the insurer still spends an average of $25,000 for each claim to vindicate its policyholders. It is not surprising that malpractice insurers pay out about $1.40 for every premium dollar they collect in today’s lawsuit happy society.
The cost of dubious lawsuits ignites a financial chain reaction that extends far beyond insurers, doctors, and patients, however. In addition to paying higher liability premiums, doctors are performing more tests and using expensive defensive medicine techniques to protect themselves. Since most Americans receive their health insurance through their employers, businesses of all kinds are either paying more for health insurance or asking employees to saddle part of the load. This translates into higher costs throughout our economy and family budgets stretched to the breaking point.
The good news is that even though the march toward tort reform is sometimes slow, the movement continues to be positive. No state legislature has rescinded advances made in past years, and many have moved tort reform proposals to the front burner. The bad news, however, is that some state legislatures and members of Congress wait until the last moment to enact minimal reforms that provide more political cover than long-term relief. Effective tort reform legislation failed to pass in Missouri, Nebraska, Oregon, Washington, and Wyoming, while “reforms” with significant loopholes were passed in Florida and Nevada.
So what does 2004 hold for medicolegal reform? First and foremost, it will receive even more attention on the national level than it did in 2003. Candidates for president, Congress, and state legislatures across the nation will have to address the issue this year. Reform will be a key campaign issue, particularly in the nearly two dozen states the American Medical Association says are in a full-fledged healthcare crisis. In these states, insurance rates can be as much as four times what doctors pay in stable states such as California.
Overall, there will be a continued effort by physicians, patients, and the business community to keep moving forward. More decision-makers are realizing that physicians are avoiding risky cases and spending hours upon hours dealing with legal issues that would be spent more productively helping patients.
Progress was made in 2003, and there is promise for further advances in 2004. We can be certain that the issue will not go away and that even more states will be involved in the coming year. But until politicians find the resolve to take lawyers out of doctors’ examining rooms, the struggle ahead will be hard-fought and runaway litigation will continue to impair access to healthcare.
— Richard E. Anderson, MD, Napa, Calif.
Dr. Anderson, an oncologist, is CEO and chairman of the board of governors of The Doctors Company, a physician-owned medical malpractice insurance company based in California.
National Tort Reform Legislation Must Occur
A recent survey of neurosurgeons across the country reveals that 88 percent reported they had been named in a medical liability suit, 16 percent in more than four. Would anyone believe that the overwhelming majority of neurosurgeons in this country are incompetent, or deviate routinely from the accepted standard of care? In fact, in view of these numbers, the term “standard of care” becomes essentially meaningless.
In arguing against meaningful tort reform and a cap on pain and suffering awards, the Democrats and trial lawyers have misinformed the public in a number of ways.
First, limiting pain and suffering awards does not mean that patients who have been injured by malpractice do not have the right to their day in court, and to receive meaningful compensation. They would still be entitled to recover all their medical expenses, future associated medical expenses and any home and nursing care expenses, lost wages, and future lost wages. The spouse would still be entitled to payment for loss of consortium, etc. This can and does all add up to a large amount of money. And a cap does indeed allow for payment for pain and suffering, but limits it to a reasonable amount.
Second, the argument that a high payment punishes a bad doctor is fallacious because most payments are made by the insurance companies. Bad doctors are punished by having hospital privileges revoked and by having their licenses suspended or revoked, effectively removing them from practice.
Third, the high cost of professional liability insurance is not due to the greed of insurance companies. New York’s largest liability carrier is the Medical Liability Mutual Insurance Company. It is owned by its physician policyholders. Any profits are returned to the physicians as dividends. It is clearly in their best interest to run an effective, efficient company that will hold down insurance costs. Yet, in its three decades of existence, it has never managed to significantly reduce premiums.
Last, trial attorneys claim that limiting pain and suffering awards will not have an impact on the medical liability crisis, that it will not reduce the costs of insurance premiums. In truth, what has been achieved in states where meaningful caps have been enacted is a stabilization of rates, rather then the skyrocketing increases that the rest of us have experienced. This year in New York, most neurosurgeons in private practice will see an increase of 14 percent. This means, for example, that neurosurgeons practicing in Long Island will have to pay the astronomical liability premium of $203,000 per year. There is simply no way for neurosurgeons to recoup these astonishing expenses.
A meaningful cap on pain and suffering will help diminish the medical liability crisis, but it is just a start. The entire medical tort system needs to be overhauled. One suggestion: a rotating panel of patients, doctors, and attorneys, reviewing the facts of each case in a non-emotionally charged setting, and presenting their conclusions to a judge with expertise in medical litigation. This would result in a faster, more equitable, and more efficient system. The concept of a non-jury medical litigation system, analogous to the current New York Worker’s Compensation system, represents a major departure from our present tort system. But if people want to have ready access to quality care, change must occur.
Everyone currently expects quality medical coverage as a right, at a minimal cost that is largely absorbed by insurance coverage. With Medicare pricing now fixed by the federal government, and most private carriers benchmarking their reimbursement rates to Medicare, the medical marketplace is no longer a true competitive, free market. The American public looks upon good healthcare as a right and when rights are granted, there are costs. One cost must be a change in the medical tort system. The question is whether our politicians have the backbone to do the right thing.
When I was a neurosurgical resident at George Washington University, my professor once informed me that his friend, Justice William Rehnquist, had told him not to expect medical tort reform because politicians were not going to defy trial lawyers. The observation remains correct two decades later. A trial lawyer recently told me that he and his colleagues were delighted by the defeat of the tort reform legislation because they feared a reduction in their incomes. I am sorry to have to burden my friends the trial lawyers, but ultimately we must choose between having more wealthy trial lawyers and a high quality, readily available healthcare system.
— Ezriel E. Kornel, MD, White Plains, N.Y.
Dr. Kornel is president of the New York State Neurosurgical Society.
More Letters?
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