From Palm Beach, Fla., to Princeton, N.J., the doctors rallied for tort reform to help end what some call “jackpot” lawsuits and put a cap on noneconomic damage awards (paid on top of awards for patients’ medical bills and lost wages) to help bring their insurance costs down. Rising costs have prompted insurance companies in at least a dozen states to raise premiums so much that doctors can hardly afford to pay them anymore. In Florida, for example, where insurers say litigation is the heaviest, obstetrician-gynecologists pay more than $200,000 a year in liability-insurance premiums, triple the amount that an Ob/Gyn in California pays per year for the same coverage. If the situation doesn’t improve, doctors say they will be forced to relocate, retire early or stop offering certain services–many already have. NEWSWEEK’s Jennifer Barrett spoke with Dr. Donald J. Palmisano, president-elect of the American Medical Association, about the current crisis and what physicians hope can be done to fix it.
NEWSWEEK: How serious is the medical malpractice insurance problem?
Donald Palmisano: We believe the medical-liability system is broken, that the amount of awards has escalated dramatically in recent years and that there is no statistical correlation between actual negligence and payment of claims, but that there is a statistical correlation between payment amounts and disability.
Medical liability insurance has reached crisis proportions in 12 states: Washington, Oregon, Nevada, Texas, Mississippi, Georgia, Florida, Ohio, West Virginia, Pennsylvania, New York and New Jersey. Only seven states are stable: California, Colorado, Indiana, Louisiana, New Mexico, Wisconsin and Hawaii.
How do you define crisis?
We look at many factors: the fact that women can’t find a doctor to deliver their babies, the closure of a Level One trauma center, the early retirement of physicians, the limitation of practice by certain specialties and the movement of physicians to other states with more stable liability climates. Those meet our definition of crisis.
The AMA lists 31 other states as having serious problems with malpractice insurance. What constitutes a serious problem?
Those are cases where physicians are contemplating whether or not to stay in the practice or to stay in the state, whether to get insurance or if they can even afford insurance. These are states where there is a clear trend of escalating insurance costs.
How did it get this bad?
The U.S. Congress and the state legislators have failed to heed the pleas of physicians and patients to change the broken liability system, so what we have is a system that has become a jackpot liability. Basically, suits can be filed whether or not there is any merit in the hopes of some settlement because of risk of runaway jury. Right now, 70 percent of cases are closed without payment. That means the case ends and the plaintiff gets no money. Yet, it costs a physician about $30,000 to defend a case without it going to trial and $95,000 to defend a case and win. The current system ultimately decreases access to care and quality of care and increases the cost of medical care.
How would you propose to fix the system?
We need a system that truly identifies negligence and allows a patient to recover quickly and fairly and enhances safety. The current system does nothing for safety. There is a proven treatment, and that is the California law that has worked for over a quarter of a century, known as MICRA [the Medical Injury Compensation Reform Act]. It caps noneconomic damage at $250,000. It makes sure money goes to patients, not lawyers. The law works. California and Florida had the highest premiums in 1975, when California enacted that law. Today, a rate for an obstetrician would be $75,000 a year in California, while in Miami it would be $210,000. Among neurosurgeons, the differences would be about the same.
You’d like to see the California bill enacted on a national level?
We think lawmakers should pass HR 4600 [the Help Efficient, Accessible, Low Cost, Timely Health Care Act of 2002]. It allows all lost wages and medical bills to be covered, gives more money awarded to the patients rather than to the attorney, and puts a $250,000 reasonable cap on noneconomic damages–those things that cannot be quantified such as pain and suffering. The issue that legislators have to decide is whether we want to have jackpotlike awards that mainly benefit attorneys and leave the rest of the population without the availability to get needed care in the time of patients’ need.
But when doctors organize walkouts and don’t provide nonemergency care, aren’t they denying patients access to care, the very thing they are fighting for?
We have to be careful about the term “walkout.” Physicians are making individual decisions to petition the government. We always tell them to check with the state societies; they know their ethical obligations … They are taking care of emergencies. What they are doing is petitioning the government; they’re saying, please, please help us keep doctors in practice. It is really sad that legislatures have not acted to prevent this.
What role should the state medical boards play? Are they being tough enough on doctors who have committed errors?
The AMA believes that the state medical boards should have adequate funding to carefully investigate claims of poor practice by physicians. The state boards are informed by law of any payment made on behalf of a physician for an alleged negligent act. It is their responsibility to see if the doctors need to be disciplined or removed from practice. We have found some doctors that have multiple suits against them that have no merit. There is a famous study done by Dr. Troy Brennan of Harvard that shows no statistical correlation between awards and negligence. He reaffirmed that and put it in writing. A study was just done in south Florida that showed that every single neurosurgeon there has been sued–and the average number of lawsuits is five. When attorneys claim that people who have had multiple suits against them should not be allowed to practice, that is ridiculous–that would mean in south Florida, you’d have no neurosurgeons.
Public Citizen, the nonprofit consumer-advocacy organization founded by Ralph Nader, claim that some states that have high malpractice insurance costs also have a lower rate of disciplinary actions against doctors. They cite figures from the National Practitioner Data Bank (NPDB) that just 5.1 percent of doctors account for 54.2 percent of the malpractice payouts, yet only 13 percent of doctors with five or more medical malpractice payouts have been disciplined.
The NPDB is full of errors and misinformation. The Government Accounting Office says that. There are multiple entries for the same incident against one physician. Also, the fact that money has been paid has no connection to negligence. Look at the Harvard study. Settlements are often made because insurance companies are afraid there may be $15 million noneconomic component–some awards go up to $100 million. Who’s going to fund that? A few patients get these jackpot liability awards, and then they find that the plaintiff attorneys amount comes off the top–the amount can go from 33.3 percent to 50 percent, so the attorney can end up with more money than the patient. That undercuts their argument that they are doing that for the benefit of the patients.
How do you ensure that the patient gets the money they need–not the attorney?
Under the California law, the attorney’s portion decreases as the award increases.
Why hasn’t California’s law been adopted in other states if it’s so successful?
Some states have passed similar laws, like Louisiana; some could not get it through their statehouse. But there’s no federal standard.
What might happen if these changes are not adopted nationally? Are we likely to see a wave of doctors moving out of these states where the coverage is higher?
A worst-case scenario is that patients won’t have access to physicians in their hour of need. Someone who is in shock from an accident won’t find a trauma center in the “golden hour,” the time period when there is the best chance to prevent catastrophic results from injury. Women won’t have doctors nearby to deliver their babies because the obstetricians will be gone.
Do you think national legislation will be passed this year?
Yes. We believe the American public is behind it, that Health and Human Services Secretary Tommy Thompson is behind it–and President Bush–and the Senate is the last hurdle. It is a top priority for the AMA, and we truly believe we represent the voice and the will of physicians nationwide. But we think patients contacting their legislators will make the difference. They don’t want to be losing their neurosurgeons or seeing doctors retiring early. This all comes down to the patients.
