Malpractice Madness

Unhappiness with the Supreme Court is about the only thing that trial lawyers and doctors share these days.


Good news this week for the health insurance industry, with the Supreme Court unanimously
ruling that patients do not have the right to sue HMOs in
state courts for complications resulting from services and
medicines wrongfully denied to them.

The HMOs triumphed over
two Texas patients who sued under a law passed under then
Governor Bush’s watch. Bush took credit for the law, which he
did not sign, during his 2000 presidential campaign,
promising, “If I’m president, people will be able to
take their HMO insurance company to court. That’s what I’ve
done in Texas, and that’s the kind of leadership style I’ll
bring to Washington.” These words, however, seemed echoes of a distant past, as the White House dutifully
sided with the HMOs.

Doctors are upset with the ruling, arguing that it is
harmful to patients and is unfair to doctors. As John C. Nelson, president of the American
Medical Association (AMA)
, said in a released statement:

“By reserving the right to decide what is —
and what is not — medically necessary, managed care plans
can now practice medicine without a license, and without the
same accountability that physicians face every day…Today’s
Supreme Court action significantly erodes patients’ ability
to obtain medically necessary care by placing patients at
the mercy of managed care plans that play doctor.”

Unhappiness with the recent Supreme Court decision to
let the HMOs off the hook is about the only thing that trial
lawyers and doctors can agree on these days. According to
the American Medical Association, patients in twenty states have experienced a
deterioration in medical services as a result of
skyrocketing malpractice insurance costs which are forcing
doctors to restrict and in some cases, cease their
services. As Alan C. Woodward, Medical Society President in
Massachusetts, which the AMA lists as one of the unlucky
twenty states, puts it:

“Our patients have world-class physicians
and health care institutions, but this crisis has been
steadily eroding the quality of our health care system for
many years….This crisis drives up costs, restricts patients’
access to care, and prevents physicians from providing the
most optimal and efficient care. For many physicians, it has
become the final straw driving them out of medicine.”

Doctors say that the roots of their troubles are
frivolous lawsuits brought against them by overzealous
attorneys after a hefty chunk of multi-million jury awards,
which have translated into double-digit hikes in malpractice
insurance rates. Trial lawyers counter that doctors must pay
for their mistakes and that insurance companies are using
occasional multi-million settlement as an excuse to
artificially increase rates.

The degree of acrimony between the doctors and lawyers is
indeed unprecedented. Some doctors have taken out their
angst directly on the enemy by refusing to treat lawyers and their
families. As Chris Hawk, a surgeon in Charleston, South
Carolina told USA Today: “This idea may be repulsive.
It’s hardball. But it’s ethical.” Computer savvy docs in
Texas were ordered to shutdown a site listing the names of
lawyers who have brought malpractice lawsuits after some of
those listed had trouble (guess what) finding a doctor.

States like Florida and Mississippi have already placed
caps on damages that can be awarded for pain and suffering.
Last year, Florida signed a law that limits the doctor’s
liability outside the medical costs to $500,000. While doctors saw the measure
as a positive first step, they say that it will be a some time before the new law is tested, and longer still before insurance rates — which they say have
risen by as much as 20 percent — fall. Some credit the law
with an increase in the number of companies that sell
malpractice insurance policies and expect the rates to drop
eventually.

Meanwhile, 3,000 of Florida’s 89,000 physicians have
decided to “go bare,” meaning to practice without insurance coverage (save emergency), by transferring their assets
to relatives — a way to limit their losses if they are
sued. As Alan Routman, an orthopedic surgeon who went “bare”
told the Associated Press : “If I really
injure somebody and do something wrong, I want them to be
compensated for it. But I don’t want some crackpot jury to
decide that I should lose everything I’ve worked for my
whole life because of it.”

The fight between the docs and the lawyers in the
Sunshine State is just heating up. The docs are seeking to
place a measure on the November ballot that would limit the
lawyers’ cut in malpractice awards. Lawyers, not to be
outdone, are gathering signatures for a measure mandating
that patients be charged same fees for identical services
and want to make it easier to revoke licenses of doctors
against whom multiple malpractice suits have been brought.

States that have balked at placing caps on damage awards
are taking other measures to placate the doctors. New Jersey has recently created a $78
million fund to help doctors cover insurance costs. Maryland, too, may soon pass a law placing
some of the rising insurance costs on the state government.
Last fall, Medical Mutual Liability Insurance Society of
Maryland, the state’s largest malpractice insurer, raised
premiums by some 28 percent. The Democratic state
legislature has opposed the caps on pain and suffering
payments that Republican Governor Robert L. Ehrlich Jr.
supports, while Elrich has rejected the idea of placing a
tax on the HMOs. In Illinois, malpractice reform is seen as
key to reaching an agreement on the budget. Recently, the
state’s Senate passed legislation protecting doctors’ personal assets and making it
more difficult for patients to initiate malpractice suits.

Trial lawyers and some consumer groups say that the
hoopla over frivolous lawsuits is overdone. The medical
lobby and the insurance industry, they say, are simply
steering the passage of favorable legislation by
exaggerating the extent of frivolous lawsuits and
downplaying the suffering caused by medical malpractice. As
the consumer advocacy group the
Center for Justice and Democracy
, puts it:

“It may be hard to understand why ‘tort
reform’ is even on the national agenda at a time when
insurance industry profits are booming, tort filings are
declining, only 2 percent of injured people sue for
compensation, punitive damages are rarely awarded, liability
insurance costs for businesses are minuscule, medical
malpractice insurance and claims are both less than 1
percent of all health care costs in America, and
premium-gouging underwriting practices of the insurance
industry have been widely exposed.”

This week’s Supreme Court decision on HMOs effects the
rights to sue of some 130 million Americans and Senator John Kerry, who has criticized
the outcome, promised to make patient’s rights an issue
this election season: “A real patients’ bill of rights has
bipartisan support, and it could become law if the Bush
administration was not standing in the way.”

The Supreme Court’s ruling may, somewhat inadvertently,
prompt Capitol Hill to get serious about passing the
long-overdue patients’ bill of rights. As

USA Today
argues:

“In handing the insurance industry a victory
in this dispute over refusing to pay for care recommended by
doctors, the court did the nation a favor. It called
attention to Congress’ failure to enact legislation that
could protect millions of patients from bad medical
decisions by cost-conscious HMOs.”