Mythbuster: Two Dozen Things Your Doctor Won't Tell You About Tort Reform

Mythbuster: Two Dozen Things
Your Doctor Won't Tell You
About "Tort Reform"

Caps take away people's Constitutional right to have a jury of their peers decide what’s fair. The right to a jury trial is as fundamental to American democracy as the right to vote. If juries of average Americans can be trusted to send murderers to death row, why can’t they be trusted to decide fair damages in medical malpractice cases?
Politicians are trying to take away people's Constitutional rights based WITHOUT HAVING THE FACTS. "Tort reform" advocates want to place a one-size-fits-all $250,000 cap on non-economic damages, commonly known as "pain and suffering." Problem is, NO ONE KNOWS HOW MUCH IS PAID OUT IN PAIN AND SUFFERING DAMAGES EACH YEAR IN PENNSYLVANIA. That figure is impossible to track because ninety percent of malpractice cases in Pennsylvania are settled out of court for a lump sum where there is no distinction between economic and non-economic damages. For the small number of cases that end up before a jury, where economic and non-economic damages are awarded separately, the state of Pennsylvania HAS NO DATA on the amount awarded for pain and suffering.
The number of malpractice cases being filed and the amount of money being paid to victims is NOT INCREASING, AND THERE HAS BEEN NO EXPLOSION IN LITIGATION - JUST THE OPPOSITE . When adjusted for the skyrocketing rate of health-care inflation, total payouts in malpractice cases remained flat up until 2001. (See Americans for Insurance Reform report) Over the past three years, total payouts have declined each year. (See Associated Press story) Furthermore, data released in March 2004 by the state Supreme Court show malpractice case filings have DECREASED by nearly 30 percent statewide since 2000. (See news coverage) In Lackawanna County, case filings dropped 70 percent between 2000 and 2004 and there were NO VERDICTS IN EXCESS OF $1 MILLION. (See Citizens' Voice story)
Aside from an occasional large verdict reported in the media, there is ABSOLUTELY NO EVIDENCE that "out-of-control" jury verdicts are driving up malpractice payouts. (See Public Citizen report)
Lawsuits are not the cause for the sharp increases' in malpractice insurance premiums over the past five years. A July 2005 study by the former insurance commissioner for the state of Missouri found that over the previous five years, the nation's malpractice insurers had raised rates more than 120 percent, while claims increased less than 6 percent.
Increases in malpractice premiums are not the fault of greedy victims and their lawyers, but rather greedy insurance companies passing along their investment losses to their policyholders. Historically, when investment income drops, insurance premiums rise. Interestingly, identical malpractice “crises” occurred during economic downturns in the 1970s and 1980s. (See AIR report) Without tough insurance regulation in Pennsylvania, health-care providers will continue to experience wild premium fluctuations.
Malpractice insurers have been plagued by scandal. A half dozen major malpractice insurers in Pennsylvania became insolvent in the late 1990s because of risky premium under-pricing, poor investment strategies and Enron-style malfeasance, leaving doctors to pay for their mismanagement. (See Center for Justice and Democracy "Mythbuster")
“Frivolous” malpractice lawsuits are a myth. First of all, trial lawyers don't get paid unless they win and have to invest tens of thousands of dollars of their own money to bring these claims to court. Perhaps more important, Pennsylvania enacted a host of legal reforms in 2002, which have effectively eliminated any lawsuits that could be construed as "frivolous." Among those restrictions, Pennsylvania now requires a victim to obtain a “certificate of merit” from a physician certified in the same medical specialty as the doctor being sued. Also, “venue shopping” for a more favorable jury has been eliminated. The new laws prompted Republican state Senate President Pro Tempore Robert C. Jubelirer to declare, “There is no such thing as a frivolous lawsuit anymore” in Pennsylvania .
"Tort reform" is part of a pro-business, anti-consumer assault on the American jury system begun by the insurance industry 50 years ago. (See articles from Washington Monthly and The Nation) Today, it is being waged by a coalition of insurers, HMOs, pharmaceutical companies, Chambers of Commerce, big business and right-wing ideologues, including President Bush, and doctors are being used as pawns in the battle. "Tort reform" is about taking away the rights of average Americans so that big corporations - the ones who contribute millions to Republican politics - don't have to worry about turning over some of their profits to the people they injure. It also means trial lawyers have less money to contribute to Democratic candidates. (See "U.S. Chamber To Fund Ads Against Trial Lawyers," Bloomberg; "The Political Mind Behind Tort Reform", Washington Post; "Pressure called key to lawsuit limits", Harrisburg Patriot News; and Press Release from Pa. Citizens for Fairness)
Doctors are NOT leaving Pennsylvania because of higher malpractice insurance premiums. According to the American Medical Association (various editions of its annual report, "Physician Characteristics and Distribution in the U.S."), the number of practicing physicians in Pennsylvania has increased EVERY YEAR from 1996 through 2004 - from 36,882 to 40,832. The Government Accountability Office, in August 2003, concluded there was no evidence of a doctor exodus in Pennsylvania. In April 2004, officials of the Pennsylvania Medical Society admitted they don’t know how many physicians there are in Pennsylvania. Pa. Senate President Pro Tempore Robert Jubelirer, a Republican, and other state legislators have since called the medical lobby's claims of a Pa. doctor exodus "scare tactics." According to the state MCARE Fund, which provides the most definitive count of doctors actually practicing in the state, there are nearly 1,000 more doctors in Pennsylvania today than there were in 1997. (See Scranton Times article)
Malpractice litigation is NOT driving up the cost of health care. Malpractice costs account for less than 2 percent of the U.S. health-care budget. The Congressional Budget Office, in a report released in January 2004, said legislation to cap damages in medical malpractice lawsuits would "do little to hold down health care spending" or eliminate the practice of "defensive medicine."
"Defensive medicine" is a myth. In a report issued in August 2003, the nonpartisan, independent General Accounting Office found no evidence that the threat of malpractice lawsuits contributes to the practice of so-called "defensive medicine." Actually, the GAO found, doctors order additional tests because it is good medical practice; doctors make money from additional testing; and managed care discourages unnecessary testing, or “bad” defensive medicine. (See GAO Report)
Insurance companies, HMOs and pharmaceutical manufacturers - NOT VICTIMS - are responsible for increases in the cost of U.S. health care. Since 2000, health insurers raised Americans' health-insurance premiums 59 percent, even as they raked in unprecedented profits. In 2003, the nation's top HMOs reported DOUBLING THEIR PROFITS. (See Jacksonville Business Journal article)
Insurance companies DON'T routinely settle lawsuits just to make them go away. Such a practice would lead to the self-destruction of the insurance industry. (See CJA's Fibs vs. Facts)
Unlike other lines of insurance, malpractice coverage is NOT experience-based. Good doctors pay higher insurance rates because of a few bad doctors.
Preventable medical errors kill an estimated 195,000 patients a year in U.S. hospitals alone. (See CNN report on HealthGrades study). That makes medical errors the third-leading cause of death in the United States behind heart disease and cancer, according to the Centers for Disease Control. It is the equivalent of TWO JUMBO JETS CRASHING EVERY DAY. It also raises the question: If 195,000 die every year in hospitals, how many more die as a result of errors in nursing homes, outpatient clinics and doctors’ offices?
A few doctors are responsible for the majority of malpractice lawsuits. Four percent of doctors in Pennsylvania are responsible for more than 50 percent of malpractice claims. The Pennsylvania Medical Board ranks 43rd among the states in doctor discipline. (See Public Citizen report)
Eight out of 10 victims of medical negligence never file a lawsuit, according to a study by Harvard University.
Caps on “non-economic damages,” commonly known as pain and suffering, are arbitrary and discriminatory. A one-size-fits-all cap doesn’t account for the unique facts in every case. It also unfairly discriminates against victims with no economic losses, such as children, stay-at-home moms, the elderly, the poor and the mentally handicapped.
Pain and suffering damages compensate victims for injuries that are real, but difficult to place a dollar value on, such as loss of fertility, blindness or loss of sexual function. For example, in the case of Linda McDougal, who underwent a double mastectomy based on another patient's test results, economic damages would be negligible because she can still work and earn a living. Like Linda, many victims of horrible medical mistakes would only be eligible for $250,000 to compensate them for a lifetime of misery. (See CJA's victim stories)
Caps won’t lower doctors’ malpractice insurance premiums. (See "Premium Deceit: The Failure of Tort 'Reform' To Cut Insurance Rates") Average premiums are actually 16 percent higher in states with caps. (See chart) And, insurance industry executives have repeatedly admitted caps won’t lower premiums. (See quotes)
No malpractice insurer in Pennsylvania has promised to lower premiums if caps are put into place. In states that have recently adopted caps, most notably Texas and Florida, insurance rates are CONTINUING TO INCREASE. In Texas, the nation's largest malpractice insurer, GE Medical Protective, recently filed for a 19 percent rate hike six months after the state enacted caps. In the filing, the insurer admitted caps would not result in lower premiums for health-care providers. (See article from the Foundation for Taxpayer and Consumer Rights) The only thing keeping rates down in California - a state often cited as a model for caps - is insurance industry regulation provided by Proposition 103.
Caps are not intended to give doctors financial relief; they are intended to give doctors immunity from lawsuits. Doctors want a $250,000 cap on pain and suffering because, in cases where there is no economic loss, victims won’t be able to find lawyers to take their cases. (See Wall Street Journal article) Malpractice cases can cost plaintiff’s lawyers hundreds of thousands of dollars out of pocket to prosecute, with no guarantee of recouping those expenses.
To date, more than $600 million in public money has been spent in Pennsylvania to help doctors pay their insurance premiums, yet doctors remain the highest-paid professionals in the state, according to U.S. Census data.
The doctors most affected by higher premiums – high-risk specialists – are also the ones making the most money, some well into the millions annually. Premium increases DON’T pose a financial hardship for many in the medical profession. On average, doctors spend 1 to 5 percent of their gross revenues on medical malpractice insurance, according to Medical Economics magazine. Many doctors supplement their incomes with fees from attorneys for providing “independent medical evaluations” in malpractice cases. Some make hundreds of thousands of dollars a year just on IME fees.