HHS: Litigation crisis worse, many lawsuits unfounded

Problems associated with medical litigation have significantly worsened in the past year, according to the Department of Health and Human Services (HHS), which says the spiraling cost of insurance for health care providers is impairing patients’ access to health care, as well as the cost and quality of care.

In a report on the problem, HHS says "the crisis has only worsened, in both scope and intensity" since its similar report about a year earlier. "More doctors, hospitals and nursing homes in more states are facing increasing difficulty in obtaining insurance against lawsuits, and as a result more patients in more states are facing greater difficulty in obtaining access to doctors," the report concludes.

The report finds dramatically better situations in states that have enacted reforms in their legal systems. However, it says, the crisis is having repercussions throughout the nation’s health care system. One-third of hospitals saw an increase of 100% or more in liability insurance premiums in 2002, according to the report. And over one-fourth of hospitals reported either curtailment or complete discontinuation of a service as a result of increasing liability premium expenses. The report also contains numerous documented accounts of physicians who have had to close their practices and services that have been shut down because of the crisis.

In 2001, the highest premiums charged to specialists in states without meaningful noneconomic caps had increased by 39%. Since that time, using the same measure, premiums in these states have gone up an additional 51%. Thus, on this basis, specialty premiums have almost doubled in two years.

The main factor causing the crisis is the rise in mega-awards and settlements, particularly for non-economic damages. New data in the report show that the number of payments of $1 million or more reported to the National Practitioners Data Bank (NPDB) has grown rapidly in the past seven years, not only in crisis states such as New Jersey, Pennsylvania, and Ohio, but nationwide. Between 1991 and 2002, the number of payments each year of $1 million or more that were reported to the NPDB increased from 298 to 806. (The new HHS report can be found on the Internet at http://aspe.hhs.gov/daltcp/reports/medliab.pdf and http://aspe.hhs.gov/daltcp/reports/medliab.htm.)

The Coalition for Affordable and Reliable Health Care (CARH), a national organization fighting medical lawsuit abuse, praised the report, particularly its point that frivolous litigation continues to drive up liability costs and has resulted in the loss of access to some health care services. CARH chairman John Thomas says the study is proof "that most spectacular jury awards of non-economic damages in medical cases are simply a huge payday for personal injury lawyers." He says the report "confirms what those of us on the front lines know, that the personal injury lawyers and their abuse of the legal system are preventing access to care and taking billions of dollars out of our health care system, both tax dollars and those paid by employers and consumers for health benefits and services."

CARH supports recent efforts by President Bush to cap non-economic damages at $250,000 and to limit attorneys’ fees, as does the American Medical Association (AMA). Six more states are now in a crisis regarding liability concerns, according to a new AMA analysis. The AMA says Arkansas, Connecticut, Illinois, Kentucky, Missouri, and North Carolina are the latest states where the current liability system is adversely affecting patient care. The group’s recent announcement brings the total number of states in crisis to 18, the AMA said. A June 2002 AMA analysis had previously cited Florida, Georgia, Mississippi, New Jersey, Nevada, New York, Ohio, Oregon, Pennsylvania, Texas, Washington, and West Virginia as states in crisis.

Obstetricians quit delivering babies

More than 5% of Arkansas physicians reported in a recent survey that they have been forced to reduce or discontinue one or more medical services in the last two years due to rapidly increasing medical liability premiums, the AMA reports. Because of a legal climate making $1 million-plus jury verdicts and settlements more common, an increasing number of Connecticut obstetricians are no longer delivering babies, and premiums for neurosurgeons and other high-risk specialists are more than $100,000. In Illinois, where the state Supreme Court has overturned medical liability reforms on three separate occasions, health clinics, hospitals, and small towns are in jeopardy because of physicians no longer performing certain procedures such as brain surgery and delivering babies. High-risk specialists in Kentucky, including emergency room physicians and general surgeons, saw increases in their liability premiums last year of between 87% and 200%. Nearly one-quarter of the state’s physicians say medical liability concerns are making them consider leaving the state.

Jury awards are increasing at an alarming rate, with top awards ranging from $4.5 million to $15 million in 2001. AMA president Yank D. Coble Jr., MD, says legislative action is necessary to protect the nation’s health care system against runaway lawsuits.

"While lawmakers debate the merits of medical liability reform, their delays are putting patient care at serious risk," Coble says. "The AMA always has held that patients who have been injured through negligence should be compensated fairly. Unfortunately, the current liability system has failed patients. Our system has evolved into a lawsuit lottery where select patients and their lawyers get astronomical awards, and many patients suffer access-to-care problems because of it."