Bush pushes for CA-style reform as doctors rebel

Doctors went on strike recently in several states to protest the malpractice crisis, as President Bush called for significant malpractice reform that would cap damages and rein in the trial attorneys blamed for much of the problem. California’s Medical Injury Compensation Reform Act of 1975 (MICRA) could be the solution, some say.

For several days, about 70% of doctors in New Jersey recently stayed away from their offices and hospitals, refusing all but emergency care and delivering babies, according to Robert Rigolosi, president of the Medical Society of New Jersey. The action was intended to dramatize the severity of the malpractice crisis and the doctors’ call for a $250,000 cap on pain and suffering. No cap was urged on actual damages from a doctor’s actions.

Similar walkouts occurred in West Virginia, Florida, and Nevada. The efforts at malpractice reform got a major boost from President Bush, who recently said, "We must have a limit on what they call noneconomic damages. I propose a cap of $250,000." Without such a limit, Bush predicted that "excessive jury awards will continue to drive up insurance costs, will put good doctors out of business, will run them out of your community." Bush also urged Congress to pass caps on punitive damages.

Announcing his reform plan to an audience of health care workers in Scranton, PA, Bush also called for limits on who can be sued. "A lot of times, these lawyers will sue everybody in sight in order to try to get something," he said. "In cases where more than one person is responsible for a patient’s injuries, we need to assign blame fairly."

Lawsuits also have forced doctors to practice "defensive medicine," Bush said, adding that such practices raise the federal government’s health care costs by at least $28 billion a year.

Bush urged lawmakers to follow in the steps of California, which capped damages from malpractice lawsuits more than 25 years ago. The American Medical Association (AMA) hailed President Bush’s call for meaningful medical liability reform, saying his visit to Pennsylvania underscores the need for elected officials at the state and federal levels to pass reforms aimed at ending "jackpot justice." Something must be done to stem the tide of doctors who are forced to retire early, move to another state, or stop performing certain procedures such as trauma surgery and obstetrics, says AMA president-elect Donald J. Palmisano, MD.

According to the AMA, 12 states are facing a medical liability insurance crisis: Florida, Georgia, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Washington, and West Virginia. Thirty-one additional states are showing problem signs. In these states, liability insurance premiums are rising at a high rate and insurance companies are not writing new policies.

"Pennsylvania already has lost more than 600 physicians and two maternity wards, and trauma care in Scranton and throughout the state is in jeopardy," Palmisano says. "While lawmakers debate the merits of medical liability reform, their delays are putting patient care at serious risk."

California-style MICRA could be solution

Like Bush, Palmisano points to California’s MICRA, saying it protects patients’ access to the courts while reining in excessive jury awards and merit less lawsuits. He says MICRA is the reason physicians’ insurance premiums in California have risen by 167% since 1975, while physicians in the rest of the country have seen their premiums increase by 505%.

"The solution is plain and simple. We need reforms patterned after California’s law, including a cap on noneconomic damages," Palmisano says. "Now is the time to put an end to a broken legal system that has caused crisis conditions in a dozen states, including Pennsylvania. California’s law works, and we have the facts that prove it."

Other important provisions of MICRA include ensuring patients receive 100% compensation for their economic losses, including medical expenses, rehabilitation costs and lost wages, if harmed by a physician’s negligence. The law also maximizes the amount of money juries award for patients, not trial lawyers, and places a $250,000 cap on noneconomic damages.

Orthopedic surgeons have been hit especially hard, says Michael Daubs, MD, an orthopedic surgeon in Las Vegas on staff at the University Medical Center’s trauma center. Millions of people in Nevada and three bordering states were unable to use the trauma center for 10 days last summer after surgeons resigned over the escalating cost of protecting themselves in lawsuits.

Daubs says an American Academy of Orthopedic Surgeons (AAOS) study found that premiums for orthopedic surgeons increased by 35% from 2000 to 2002. A recent survey of orthopedic surgeons conducted by the AAOS found that rising liability insurance premiums have caused 55% of orthopedic surgeons to avoid at least some procedures due to liability concerns. Thirty-nine percent report they avoid performing spine surgery, 21% eliminate emergency room call, 6% eliminate all surgery, and 5% retired early.

New Jersey sees 50% increase

A new survey by the nonprofit New Jersey Hospital Association (NJHA) in Princeton shows that the average hospital in that state experienced a 50% increase in medical malpractice insurance costs in 2002, bringing the average hospital annual premium to $1.4 million. The multiyear trend shows that the average hospital’s premium has skyrocketed by 207% since 1999. NJHA president and CEO Gary Carter says a full 100% of the hospitals responding said their rates had increased in 2002, despite the fact that 14% had reduced their coverage levels in an effort to rein in costs. The findings were based on a survey of all of New Jersey’s 119 hospitals conducted in December 2002. The survey yielded a response rate of 46% of the state’s acute care hospitals.

"This survey confirms our worries that the crisis is not only deepening but also reaching into every corner of the state," Carter says. "Each and every hospital in New Jersey is struggling with this problem."

Carter cites one finding that he found particularly troubling: a growing reluctance by physicians to treat charity care patients. One-third of the hospitals said the medical malpractice crisis has made physicians think twice about treating charity care patients because it could make them more vulnerable to medical malpractice claims and rising rates. Hospitals also report that the growing premiums are cutting into their operating budgets and threatening to drain money away from other areas of the hospital. The survey shows that hospital medical malpractice insurance premiums, as a portion of total hospital operating budgets, have nearly doubled in the last four years.

"We’ve already seen the impact of this crisis in the physician community, with doctors closing their practices or dropping high-risk services," Carter says. "Now it’s clear that hospitals are facing tough choices, including the possibility of eliminating services or cutting staff to cover the growing costs of insurance."

In fact, the survey revealed that one out of every 10 hospitals has been forced to lay off staff because of rising malpractice insurance rates. The survey also found that one out of every four hospitals, nearly 27%, has been forced to increase payments to find physicians willing to cover the emergency department. Physicians are increasingly reluctant to take on such assignments because of the greater liability exposure, Carter says.

Hospitals report that more and more physician specialties are being hit by the crisis. While a previous NJHA survey in March 2002 found that OB/GYNs and surgeons were primarily affected, the new survey finds a deepening impact for neurologists/neurosurgeons, radiologists, orthopedists, general practitioners, and emergency physicians.