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Telling public how its money is spent
Nealon makes right call on Mcare settlements
Lackawanna County Judge Terrence Nealon upended only a tradition of
secrecy last week, rather than the law or fundamental democratic
principles, when he found that the public has a right to know how its
money is spent.
Still, his
ruling could have a seismic impact on Pennsylvania's medical
malpractice liability controversy.
It has been customary for
settlements in medical malpractice cases to be sealed, and that practice
has been an issue within the roiling controversy over malpractice
litigation. As the medical community presses for caps on pain and
suffering awards, trial lawyers and patient safety advocates contend that
the more pressing issue is patient safety, and that public disclosure of
error is a key component of improving that safety.
Judges routinely seal settlements in many types of civil litigation. In
such cases, defendants concede no wrong, and plaintiffs agree not to
discuss the particulars of the case, including the size of the settlement.
And the money usually comes from insurance companies, funded by privately
paid premiums.
Several years ago, however, the Rendell administration and the state
Legislature added a significant wrinkle when they mitigated the soaring
costs of malpractice premiums. They allocated more than $220 million in
public money a year to the state's catastrophic loss fund, known as Mcare.
That fund provides secondary malpractice coverage for physicians. So far,
about $700 million in public money has been allocated to that effort.
The money is derived from a tax paid to the state by insurers for other
types of insurance, and from cigarette sales. Although the money does not
come directly from most state taxpayers, it still is their money once it
enters the state treasury for distribution to Mcare, the province of a
state agency. It is public money.
So recently, when a case against a local obstetrician/gynecologist was
settled, the defense made a routine motion to seal the settlement, but
Judge Nealon did not have a routine response. Since the Mcare-funded
portion of the settlement involves the expenditure of public funds, the
judge ruled, the public has a clear right to know how that money is being
spent.
The ruling appears to be the first of its kind in
Pennsylvania
since the
state government kicked in public funds to help cover the premiums. It is
now likely to be emulated by other judges.
It is too soon to know the impact on malpractice litigation of the
public's right to know how its money is used in settlements. It could
chill the environment for settlements, as defendants calculate the impact
of disclosure. But it also could provide greater pressure for greater
patient safety.
In any case, Judge Nealon made the right call regarding the expenditure of
public money. Use of public funds to help offset Mcare premiums is a
legitimate means to help maintain broad public access to quality health
care. But it is not exclusive of the public's clear right to know how its
money is spent.
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