| Target: Juries The Real Aim Of Medical Malpractice 'Reform' Reposted From TomPaine.com |
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| Have you checked your
auto, homeowners, or business insurance premiums lately? They’re way up.
Why? Because insurance companies, which like to gamble in the stock and bond
markets, have taken a drubbing. They’re trying to recoup by boosting
premiums. Insurers have jacked up medical malpractice insurance rates, too. Doctors are howling. In headline-grabbing strikes across the nation, they proclaim they can’t practice medicine without affordable insurance. True enough. But instead of fingering the real culprits -- insurance companies -- doctors and the American Medical Association have joined insurers in blaming injured patients who file supposedly "frivolous" lawsuits and jurors they say are eager to make huge malpractice awards. Their solution -- limiting the discretion of jurors by capping jury awards, so-called "tort reform" -- is as fraudulent as the manufactured crisis it’s supposed to address. Donald J. Zuk, CEO of a major malpractice insurer, has said as much. Commenting on rising malpractice premiums, Zuk told The Wall Street Journal last year, "I don’t like to hear insurance-company executives say it’s the tort system -- it’s self-inflicted." In fact, when malpractice premiums spiked in the 1980s, many states capped jury awards. That hasn’t held rates down. (California passed insurance reform in 1988 -- that worked.) And if discouraging "frivolous" lawsuits is the goal, why cap damages in successful suits, those that, by definition, are not frivolous? The current insurance "crisis" is, in fact, just the latest push in a decades-long effort to pass "tort reform" -- a campaign by corporations, doctors and insurance companies to insulate themselves from legal accountability by tying jurors hands. "The people pushing tort reform have used campaign contributions and lobbying to compromise elected officials and regulators," says one consumer advocate. "Juries are the last line of protection for consumers. Jurors don’t take campaign contributions. They can’t be lobbied. What tort reformers fear most is 12 people they can’t control." This week at TomPaine.com -- TARGET: Juries Featuring "Been There, Done That" by Steven Rosenfeld... "The Golden State Solution" by Harvey Rosenfield... and a Q&A with Joanne Doroshow, Center for Justice and Democracy (www.CenterJD.org). Published: Feb 11 2003 |
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| The Case Against Tort Reform An Interview With Joanne Doroshow, Center For Justice And DemocracySteven Rosenfeld is a commentary editor and audio producer for TomPaine.com. Joanne Doroshow is executive director of the Center for Justice and Democracy, a public interest group working to preserve the civil rights of individuals in the justice system -- a similar perspective to the trial lawyers. She was interviewed by TomPaine.com’s Steven Rosenfeld about the liability insurance crisis that’s prompted calls by physicians and other business lobbies for federal regulation of jury awards. |
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| Please note that
many of the figures cited by both sides of this dispute are controversial and
hard to independently verify. TomPaine.com: You’ve called tort reform "one of the biggest public relations scams ever." Why is that? Joanne Doroshow: Well, there is no basis for it whatsoever. Lawsuits, lawsuit filings, jury verdicts are down, and they’ve been that way for years. And what’s really driving the call for tort reform today, is a crisis in malpractice insurance, or insurance in general, which is the result of price-gouging by the insurance industry to make up for lost investment income. But insurance companies are blaming juries and victims for their own mismanagement and lost investment income. So, that’s why it’s a scam. TP.c: Why are hospital CEOs and physician groups... why are they blaming juries and not the insurance companies? Doroshow: Doctors and hospitals and HMOs all want their liability limited. They don’t want to be sued. They don’t want to be second-guessed when medical errors occur. And one way to certainly stop patients who have been injured from suing is to take their rights away, which is what tort reform does. It basically so limits compensation or provides so many obstacles for people who have been injured, that it’s impossible for them to find the resources to bring a lawsuit. Ultimately, they have to hire lawyers and attorneys can’t afford to bring cases -- these are extraordinarily expensive cases to bring and to win. And if you so limit the ability of a patient to get any compensation, then the attorney is not going to be able to afford to bring the case. So that’s a lot of what it’s about, to basically stop people from suing, who have been harmed. TP.c: So how then is today’s medical malpractice premium crisis, if you will, the ‘Trojan Horse’ for a larger or more sweeping tort reform agenda? Doroshow: Well, Congress has never, in the more than 200-year history of this country, ever interfered with the legal system the way they are proposing to now -- by basically telling local judges and juries what they can and can’t award in a case. Once you set that kind of precedent with a federal law, there is a huge slippery-slope problem. Ultimately, it will set the stage for the pharmaceutical industry, for the chemical industry, for oil and gas, the auto makers -- they’ll all move in arty to get Congress to limit their liability through federal legislation. So it’s a very, very dangerous precedent and it will be used by all of corporate America over the next two years as a way of moving to basically take over the local judicial system in every single state. TP.c: So the danger in a remedy that concerns medical malpractice insurance is that it creates a precedent that can be followed elsewhere? Doroshow: That’s certainly one of the dangers. On its own, the dangers are extraordinary when it comes to patients. And also for patient safety, because we all benefit from lawsuits whether or not we ever go to court. Often times, [it’s only] because of a lawsuit that a company, like a hospital, will take steps to make things safer for everybody. TP.c: What then do you make of this phenomenon that the other side brings up, of so-called lawsuit abuse -- because surely there are lots of people filing suits to win some settlements? Doroshow: Well, you know, that’s actually a fairly rare phenomenon, because what you’re basically assuming is that there is a lawyer out there who’s going to take a risk and get no money at all, and have to put out money to even bring a malpractice case. Lawyers are small businesses like everything else. They can’t function and afford to stay in business by bringing frivolous suits. And as a matter of fact, only one in eight people who are hurt by malpractice even file a claim for compensation -- which is an extraordinarily low number of people, given the amount of malpractice that goes on in this country. I mean 98,000 people die every year as a result of medical errors, just in hospitals. And that’s just people who die. That’s not even in juries. And only something like 35,000 people a year collect anything in compensation. That’s far less than the number of people that die in hospitals. So, there is far more malpractice out there than anyone ever files a claim to try to hold the hospital or the HMO or doctor accountable for. |
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| Been There, Done That 'Tort Reform' Has Not Worked Steven Rosenfeld is a commentary editor and audio producer for TomPaine.com. Jury caps haven't lowered or stabilized insurance rates. |
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| America’s
doctors have staged a series of dramatic work stoppages in recent weeks to
protest rising malpractice insurance rates. In New Jersey, Florida, West Virginia and elsewhere, they’ve brazenly postponed seeing their patients and made a beeline for the television cameras to deliver an ultimatum: Congress must regulate jury awards, because without such "tort reform" their livelihoods and patients' care are threatened. "The crisis for our practitioners is basically they either cannot afford or they can’t even get medical liability insurance," said Dr. Charles Hammond, president of the American College of Obstetricians and Gynecologists. We are totally in favor of a national tort reform," he said, "And I might add, [we also favor] a serious national look at other mechanisms that might improve the issue besides tort reform... [such as] alternative dispute resolution techniques." But as Congress prepares to respond, tort reform advocates are ignoring an important fact: Doctors and others demanded caps on jury awards when insurance rates spiked in the 1970s and 1980s. Thirty states -- some of the very states where doctors are now calling for federal limits on jury awards -- subsequently adopted jury caps, but the caps haven't lowered or stabilized insurance rates. According to government studies of the last rate crisis, premiums only fell when the market and economy began to recover in the early 1990s. "So regardless of whether you believe caps limit the amounts that insurance companies pay out, it’s demonstrable that it doesn’t reduce insurance rates," said Jay Angoff, an attorney who was Missouri’s insurance commissioner from 1993-98. In the 1980s, when most states adopted their award caps, Angoff said it was assumed that regulating juries would reel in insurance costs. But that’s not what ensued in Missouri, which adopted a $350,000 cap, he said, because insurers never passed along any savings to consumers. "It stands to reason that tort reform, especially if the cap is real low, has got to reduce the amount that insurance companies will pay out," Angoff said. "But that doesn’t mean the industry will pass it through to the consumer." Notably, California capped jury awards in 1975, but that didn’t stop premiums from rising. What did hold them down was the aggressive insurance reforms passed by the state in 1988. California’s remedy was Proposition 103, a ballot measure put forth by consumer activists. It required the industry to justify rate increases and ordered rebates to the public -- including to doctors. Premium costs leveled off only after it took effect. There is no doubt that insurance rates for everybody, including doctors, have risen dramatically in recent years. The reason why depends on who you ask. Consumer activists who work on insurance and litigation issues say the crisis is caused by insurance-industry price gouging. They say insurers, who historically earn more money from investing premiums in stocks and bonds, have been hurt by the market downturn. So insurers have raised rates for everybody, including doctors, to recover these losses. A study by J. Robert Hunter of the Consumer Federation of America suggests this is the case. He studied malpractice premium growth and found it did not track claims paid out by insurers. Instead, Hunter found premiums rose and fell with the economy. In strong economies, when the markets are gaining, insurance rates hold steady. When markets are weak, premiums rise. "This is the third time in 30 years that we’ve had this crisis," said Joanne Doroshow, executive director of the Center for Justice and Democracy, a consumer and legal rights group. "And inevitably, there are always these frenetic calls for tort reform, because the insurance industry will say, 'Oh, don’t look at us. It’s not our fault that we’re price-gouging. It’s the lawyers and the juries.' When actually that’s not at all what the evidence shows." The doctors, of course, have the opposite view. They put the blame not on insurers, but on their longtime professional adversaries: the lawyers who sue on behalf of injured patients. And they blame juries who respond to emotional claims by plaintiffs by making multi-million dollar damage awards. "It’s jackpot justice right now," said Dr. Hammond of the American College of Obstetricians and Gynecologists. "If you look at the number of cases being filed, they are steadily and rapidly increasing. If you look at the size of awards that are given by juries, despite the fact that over 90 percent of the lawsuits never get to court ... the awards that are being granted are going rapidly upward as well." Doroshow and Hammond present conflicting statistics -- and there are seeds of truth on both sides. For consumer advocates, it appears to be true that the trend in the number of annual malpractice claims filed, the size and amounts of out-of-court settlements (which account for 95 percent of all claims), and the size of average jury awards have been consistent for years. But from the doctors’ perspective, it’s also true that multi-million dollar verdicts do occur and tilt the system, causing insurers to raise rates and doctors to practice ‘defensive’ medicine. But beyond the who-is-to-blame debate, there are larger issues at stake: the right to a trial by jury, and the ability of jurors to render justice as they see fit. Dr. Hammond said his group didn’t just want federal tort reform, but also supported "alternative dispute resolution techniques." This could be mandatory arbitration, or a hearing before an administrative judge, or panel -- any alternative to doctors confronting injured patients before juries. “I believe there are a number of other dispute resolution mechanisms as well,” he said. “There are the early settlement issues, where the claims would be no-fault; in which some arbitrating panel or judge makes a judgment, and an award is made right there and then. So it’s prompt return of funds to a patient.” “I don’t actually buy the benign view of doctors,” said Harvey Rosenfield, author of California’s Proposition 103 and executive director of The Foundation for Taxpayer and Consumer Rights. “Forget about premiums. They don’t want to be sued. They hate lawyers. They hate being sued.” There is a national crisis in medical malpractice, but it’s not about insurance rates, Rosenfield said. That real crisis is the tens-of-thousands of annual deaths in hospitals each year from medical errors, he said, citing studies by the federal Institute of Health and other academics. “Doctors and hospitals and HMOs all want their liability limited,” said Doroshow, of the Center for Democracy and Justice. “And one way to certainly stop patients who have been injured from suing is to take their rights away, which is what tort reform does. "It basically so limits compensation, or provides so many obstacles for people who have been injured, that it’s impossible for them to find the resources to bring a lawsuit.” Published: Feb 11 2003 |
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| The Golden State Solution How California Solved Its Insurance Crisis Harvey Rosenfield is the President of the California-based Foundation for Taxpayer and Consumer Rights and the author of Proposition 103. |
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| California has
already reckoned with the "malpractice insurance crisis" now raging across
the nation. Thirty years of experience in the Golden State shows that stringent regulation of insurance companies, not restrictions on the right to sue negligent doctors and hospitals, is the only way to control the price medical providers pay for liability coverage. California has tried it both ways. In the mid-'70s, skyrocketing premiums galvanized doctors to join the insurance industry in campaigning for "tort reform." Meeting in emergency session, lawmakers passed the 1975 Medical Injury Compensation Reform Act, known as MICRA. It caps patients’ damages for pain and suffering at $250,000, limits attorneys’ fees and shifts the cost of caring for victims of medical negligence to taxpayers. MICRA enriched the insurance industry by reducing what it had to pay out to victims of medical mistakes. But contrary to the insurers’ promises to doctors, premiums continued to rise. Ten years later, another insurance crisis hit the nation. California experienced massive increases in auto, business as well as malpractice insurance premiums. Once again, insurers blamed a "litigation explosion" for what they described as enormous claims losses. More "tort reform" was passed, but premiums continued to soar. In 1988, angry voters took matters into their own hands, passing a ballot measure that imposed the toughest regulation of insurance rates and practices in the nation. Under Proposition 103, premiums were frozen for nearly four years. Insurance companies were forced to refund over $1.2 billion to Californians, including over $75 million to physicians. Proposition 103 requires insurers to open their books and justify future increases, while limiting the expenses, projected claims and profits that insurers can pass on to consumers. It stripped the industry of its exemption from the antitrust laws. And it gave voters the right to elect the state insurance commissioner. Only after Proposition 103 passed did medical malpractice insurance premiums go down and stabilize, according to the insurance industry’s own data. (Click here to read a chart detailing the industry's premium rates.) The periodic insurance upheavals that afflict the nation have nothing to do with lawsuits or the size of damage awards, both of which, in the case of medical malpractice, have not increased significantly. Rather, insurance companies manufacture these "crises" when they decide to boost premiums in order to offset investment losses. In the '70s and '80s, falling interest rates reduced their investment income. The current crisis stems from insurers’ attempts to cash in on the stock market boom of the '90s by abandoning conservative investment practices. The bear market cost the liability insurance companies $10.8 billion during the first half of 2002, according to a conservative estimate by Weiss Ratings, an industry monitor. And they lost hundreds of millions in the stocks of crooked companies such as Enron and WorldCom. Insurers weren’t the only ones to get hurt in the market. But unlike the rest of us, insurers can dig into consumers’ pockets, raising premiums to cover their losses. That's why industry profits soared by $11.9 billion in the first three quarters of 2002. What about the huge losses that insurers insist are forcing them to increase rates? They’re as phony as Enron’s bookkeeping. Industry accounting practices permit insurers to write-off their claims payments -- including projections of future claims -- as losses for tax and regulatory purposes. Insurers therefore routinely inflate their projections of claims payments to make it look as if losses have soared. In previous crises, a huge portion of these phantom losses never materialized. Insurers then quietly book the "losses" as profits. Examination of their financial statements reveals the extent of the scam: From 1996 to 2001, insurers nationwide paid out an average of only 69 cents in claims for every malpractice premium dollar they took in. Lost in the debate over malpractice premiums is the true crisis: the epidemic of medical malpractice that kills over 160,000 American each year, according to a landmark study by Paul C. Weiler of the Harvard School of Public Health. Meanwhile, in California MICRA has made it impossible for many malpractice victims in California to hire a lawyer. That’s because its cap -- now worth $68,000 in 1975 dollars -- has left many of the injured and next of kin without adequate resources. Moreover, MICRA has undermined the powerful incentive for quality care provided by the threat of a lawsuit, protection that patients need in the era of profit-driven HMO care. That’s why California consumers are calling for MICRA’s repeal, even as President Bush has joined striking doctors and the insurance industry in support of a federal MICRA law. This is just more evidence that the real solution to the insurance crisis isn’t curtailing juries and other tort reforms, it’s regulation of an industry long-used to operating under federal anti-trust exemptions. |
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| Tort Reform Reader A Clickable Compendium The TomPaine.com Staff |
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| In concert with our
"Target: Juries" Op Ad, the TomPaine.com staff has compiled links and excerpts
to reports, factsheets and articles that explore the medical malpractice
"crisis" and the tort reform debate. CJ&D's Medical Malpractice Guide A report from the Center for Justice and Democracy Sept. 25, 2002 These are selected questions that CJ&D suggests for journalists to consider from its media guide. Question: If physician lobbies are really concerned about reducing insurance rates for doctors, why are physician lobbies not endorsing broad insurance reform proposals to end the current insurance crisis and prevent future ones, or even [Americans for Insurance Reform's] request for an immediate freeze on medical malpractice rates? Question: How can restrictions on U.S. jury awards in medical malpractice cases solve an insurance crisis that affects many other lines of insurance, including homeowners', auto and health policies and even insurance in other countries? Question: To what extent are today's rate increases an attempt to recoup money that insurers lost in the stock market, bonds or in other poorly-performing assets, and to what extent are insurers adversely affected by today's low interest rates? Medical Misdiagnosis: Challenging the Malpractice Claims of the Doctors' Lobby Executive summary from Public Citizen Jan. 9, 2003 This is a list of solutions and alternatives to the 'tort reform' debate from Public Citizen.
Recent Investigative News Stories From the Center for Justice and Democracy's media guide. Doctors in several states have called strikes to raise attention to the medical malpractice insurance votes. The Center for Justice and Democracy has compiled a list of recent articles that address the tort reform debate and the medical malpractice "crisis." Many of the articles challenge the notion that doctors are leaving states because of high malpractice insurance premiums. One example: Sun Herald (Biloxi, Miss.), Aug. 11, 2002: "Claims that doctors are leaving the state en masse aren't supported by data from the state Board of Medical Licensure, or even information provided reluctantly by the state Medical Association.... Mississippi's insurance rates are no higher than many other states, including some with caps on damages.... Mississippi remains below the national average for personal injury awards, medical malpractice awards and claims per doctor.... [The] Mississippi Medical Association could not provide specific data to support its claims against the legal system." Talking Points From the American Medical Association Jan. 21, 2003 These are some of the solutions that the American Medical Association lists for solving the malpractice insurance "crisis." The spiraling costs generated by our nation's dysfunctional liability system are borne by everyone. We need a system that ensures fair compensation and puts an end to the "lawsuit lottery." The common sense reforms we support are not part of some untested theory; they work. The California law known as MICRA has worked in that state for more than 25 years. The law has proven fair to patients and effective at stabilizing the medical liability system in California.
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| Jury Tampering by Michael King for TomPaine.com May 8, 2001 |
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This article was published 18 months ago, but it is as relevant today as the day it was published. Bush hasn't said much about tort reform since entering the Oval Office, but throughout his presidential campaign he proudly took credit for curbing "junk lawsuits" in Texas. And he's used other phrases from the tort reformers' code book -- talking about protecting employers from "unnecessary and frivolous lawsuits" and capping lawsuit damage awards to discourage "excessive" litigation. These are clues to the coming battle in Congress over tort reform. Expect the Bush administration to promote the cause of its corporate sponsors, who are frank about their intentions: insulating manufacturers and sellers from liability for defective products; restricting or "federalizing" class action suits, thereby reducing or delaying judgments; minimizing or eliminating joint and several liability, making it easier to shield corporate defendants from financial sanction; restricting injured parties' medical claims to standards written by industry; and capping lawsuit damages at levels that make it cost-effective for corporations to persist in wrongful conduct while avoiding financial liability. The President's Medical Liability Reform Proposals Hurt Consumers and Won't Lower Costs for Doctors A factsheet from U.S. Action Congress can help fix the high cost of medical malpractice insurance by taking away insurance companies' anti-trust exemption to keep them from colluding in setting rates and price-fixing. According to different observers the insurance companies underpriced their policies during the '90s in order to gain a competitive edge and also because they earned more money from investments than by writing policies. Congress should also consider proposals to improve patient safety, including those to address staffing levels in hospitals and nursing homes and to provide for more public disclosure to consumers about doctor's safety records and for stronger peer review and discipline by medical review boards. Five Dangerous Myths About California's Medical Malpractice Restrictions A factsheet from the Foundation for Taxpayer and Consumer Rights Myth #1: Legal restrictions on victims lowered california doctors' malpractice premiums. Myth #2: Injured patients are still able to hold wrongdoers legally accountable because only "non-economic" damages are capped -- compensation for those damages not measured by wage loss, medical bills, or other tangible economic measures. Myth #3: A one-size-fits-all cap on compensation is fair to patients who can receive "unlimited" economic damages. Myth #4: Malpractice damage caps are about doctors vs. lawyers. Myth #5: Defensive medicine is always bad, significantly drives up the costs of medicine and results from doctors facing full legal accountability. |