Posted on Sun, Jan. 09, 2005


Award caps not solution to tort reform problem

Tort reform has become a national and statewide cause celebre. It is a signature concern of President George W. Bush's second term, and it's high on the priority list again this year of Georgia Gov. Sonny Perdue.

Lobbyists for trial lawyers and for medical professionals at the national and state levels have had several years to hone and supplement their arguments in the national debate that seems to center on fixing outrageous damage awards, in particular medical malpractice cases.

The reform proposals in President Bush's package, however, include legal system changes more far-reaching than just in medical malpractice cases. But it was a proposal for caps on non-economic damages in those cases that he rolled out first last week, with great fanfare.

In Georgia, Perdue and the business community have joined with medical groups lobbying for the same cure to a problem - but have left too many other solutions unexplored.

Health care providers and groups such as the Georgia Hospital Association have long argued that the viability of the state's hospitals and the availability of obstetricians, neurosurgeons and other high-risk medical specialists rely squarely on curbing the high costs of frivolous litigation. They are pushing for a number of remedies; the most controversial of them is the cap on awards by juries, designed to help stop the extravagant increases in malpractice premiums.

That banner is an easy flag to fly. People think of the McDonald's hot coffee suit and shake heads in amazement at such judgments.

A poll the GHA released in November shows that 80 percent of Georgia voters favor some kind of tort reform legislation. That figure is not surprising. Patients are experiencing problems with finding doctors, and they've been convinced by the profession that malpractice judgments are the culprit driving doctors out of practice.

It's not that simple.

Before the Legislature or Congress buy into the argument that caps on non-economic awards are the panacea, they should try to answer these questions for their constituents: Will caps on non-economic damages deny them access to justice? Will they guarantee them better access to medical care? Might other factors be just as important as caps?

We believe some of the common-sense reforms advocated by GHA could help eliminate frivolous lawsuits: Abolishing joint and several liability for damages; limiting expert witnesses to those practicing specialities specific to the particular case; establishing some form of arbitration or alternative dispute resolution, and allowing annuity payments rather than lump sum awards.

The proposal that has not met the common-sense or legitimacy test is damage caps.

Even the Government Accounting Office in Washington has put out a report that debunks caps as a cure-all. While malpractice payouts are a (small) contributing factor to rising malpractice insurance rates for hospitals and doctors, the GAO points out that insurance companies' underwriting miscalculations and financial mismanagement are what have exacerbated the cyclical swings that malpractice premiums have historically taken.

GeorgiaWatch, a consumer interest group that opposes caps, also points to a statement made by the nation's largest malpractice insurer in a Texas rate hike case: "Non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1 percent." Texas, like California and 30 other states, has passed a cap ($250,000 in Texas) but has not seen significant reductions or even a holding pattern on malpractice premiums.

GeorgiaWatch and a coalition of senior- citizen interest groups are pushing to switch the debate from tort reform to patient safety reform. Their figures show that 3.5 percent of Georgia's doctors are responsible for 40 percent of the malpractice cases. They want legislative remedies aimed at a pro-active weeding out of the few bad doctors and adding a patient's Bill of Rights.

Health care availability is becoming critical. But addressing only one questionable aspect of the problem - malpractice jury awards - to the detriment of the major stakeholders - patients and consumers - does not get at the cause and effect of our finding and keeping quality doctors and hospitals.

A reasoned analysis would show work needs to be done with patients' rights, insurance company reforms and tort reforms.





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