Analysis: Beyond medical tort caps

By LAURA GILCREST, UPI Health Business Editor  |  July 23, 2007 at 4:29 PM
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WASHINGTON, July 13 (UPI) -- Whether the issue of medical malpractice reform is addressed via new strategies -- like so-called health courts and "early offer" settlements -- or through repackaged, more palatable versions of older ones -- limits on jury awards -- lawmakers agreed Thursday that the status quo isn't working and the ultimate losers are the patients.

A recent study showed that more than half of scarce healthcare dollars are being eaten up by administrative costs, lawyers' fees and court costs, said members of the House Committee on Energy and Commerce, while the patients who are most seriously injured by medical mistake wait years for compensation, or get no redress at all.

Just months after the latest bill imposing caps on medical tort "pain and suffering" damages died a quick, unceremonious death in the Senate, committee members met to discuss yet more solutions to a problem that won't go away, hoping to meld the most workable ones into new legislation that can survive a senate vote.

"We need an effective legislative solution to this crisis," said Committee Chairman Nathan Deal, R-Texas. "The Senate has allowed the Democrats to obstruct the debate through parliamentary tactics."

At the same time, Democrats derided the most recent medical tort reform bill - which would have imposed damages caps of $750,000 -- as a rigid, "my way or the highway" measure whose supporters wouldn't allow amendments or compromise. "There's been little effort on the part of Republicans to work with Democrats," said Rep. Frank Pallone, D-N.J. The last reform debate was marked by "name-calling rather than a consideration of what would pass the Senate. I hope this is a new beginning," he said.

Deal said legislators should consider a range of ideas with the guiding principle of reducing frivolous lawsuits while advancing patient care. "Everything's on the table," he told the hearing.

The medical liability issue has drawn increasingly bitter battle lines between two esteemed professions -- medicine and law -- both with much to lose and both armed with a cadre of experts and studies -- and some powerful congressional allies -- to blame the other side as the problem and claim for itself the "the best interests of the patient" mantle.

But it was clear from Thursday's hearing that a new, often-overlooked culprit in the debate is emerging -- malpractice insurance companies. Tort lawyers have already pointed to insurers as the real problem in driving up premiums, claiming the insurers are motivated not by a spike in malpractice claims, but by a desire for higher profits.

"I believe insurance reforms should be a part of the debate," said Pallone, "(Damage) caps alone won't do it."

Rep. Lois Capps, D-Calif., agreed. "Time and time again, our leaders have refused to address the problem of doctors leaving the profession (while) these insurance companies are raking in profits."

Committee members also said any new legislation on tort reform might include incentives for plaintiffs and doctors to settle tort claims, or include liability protection for doctors who treat indigent patients, which was built into the last tort reform bill.

The committee heard testimony from groups advocating that the medical liability system should be turned over to so-called "health courts," boards of medical experts that would hear medical claims and dispense economic damages to injured patients more efficiently and in far less time then it takes in the legal system. A number of bills are currently pending that would create the controversial courtroom alternatives.

Health courts would shift the medical liability system from one based on negligence - which breeds fear and stigma -- to one focused on preventability, Michelle Mello, professor of health policy and law at Harvard University, told the committee.

Health courts could be tested at the state level -- and backed by federal dollars -- through a series of pilot projects "at low cost and low risk," she said.

Mello added that, under the current system, just three to five percent of seriously injured medical tort plaintiffs file claims in court, and of those, only about one quarter ever see compensation. "There's a much more efficient way to get money to people," Mello told the committee.

However, Joanne Doroshow, executive director of the Center for Justice and Democracy, who also testified at the hearing, said health courts would force plaintiffs before administrative boards made up of potentially biased officials from the healthcare industry and would strip claimants of the legal protections of a jury and an "unbiased judge."

"Vague promises of efficiency don't equal what's taken away from victims," she said. Doroshow also argued such boards would be vulnerable to political influence. She pointed to worker's compensation boards, where she said "insurance companies get (claimants') benefits chipped away at the state level."

Cheryl Niro, a partner with the Chicago-based law firm Quinlan and Carroll, who testified on behalf of the American Bar Association, also blasted the concept, noting that worker's compensation claimants don't have to prove fault, but health-court claimants "would have a burden of proof as if they were still in court."

Niro said the present system for alternative dispute resolution already works and is voluntary, unlike health courts.

James Wooten, a partner with the Washington, D.C.-based law firm Mayer, Brown, Rowe & Maw, said a tort-based system, even with reforms, won't be enough to help injured patients, and advocated for a national database of medical cases -- stripped of doctor and patient identities -- as a way to reduce medical errors.

"A tort-based system is an impediment to reducing error because it discourages the disclosure of vital information that could reduce error," he told lawmakers.

Jeffery O'Connell, professor of law at the University if Virginia, in Charlottesville, proposed a novel solution: the "early offer" settlement. A medical malpractice defendant would have the option of offering to pay within 180 days the plaintiff's net economic damages, excluding compensation from insurance coverage and/or worker's compensation claims -- an offer the plaintiff would be compelled to accept.

The only exception would be if the plaintiff can show "gross negligence beyond a reasonable doubt," he said, noting that data suggest that about three percent of all medical malpractice claims involve gross negligence.

These settlements could be noted in a medical database to distinguish them from cases where negligence is proven, O'Connell said.

Although the House lawmakers said they were open to new ways to attack the medical malpractice problem, some felt there was still room in the debate for what they said is the tried and true.

Since caps on medical tort damages passed in Texas three years ago, the state has seen healthcare dollars -- and doctors -- pour back into the state, particularly for non-profit hospitals, noted Rep. Michael Burgess, R-Texas. "I'm a believer," he said.

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