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  Malpractice: Tort Reform

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Dawn Lipthrott, LCSW
Ethical Health Partnerships
1177 Louisiana Ave. #212
Winter Park, FL 32789


In this and other articles, we will explore the area of malpractice and give you suggestions about how you can take action.

While tort reform is necessary to 'stop the bleeding', it will not solve the problems of unjust malpractice claims or patient injury and compensation. Basic issues of tort reform . . . caps on awards, contingency fee restrictions, joint and several liability, collateral sources of compensation, periodic payment, and expert testimony are discussed. We encourage a new approach to expert testimony and more balance in creating a jury of peers when cases go to court. For what I believe is a more ethical approach to patient injury and compensation,
click here.

The malpractice climate, especially in states like Florida, is indeed a crisis. People who say there is no crisis of care, have not talked with many physicians in Florida which has some of the highest malpractice premiums in the country. When you have a patient that is bleeding profusely, you have to stop the bleeding before you can address the problem at a deeper, and ultimately, more effective level. Tort reform is needed now to stop that bleeding. It is not the whole answer, but is a part of the first remedy to stabilize some of the system. Insurance reform is not the whole answer, but is part of the same first line of remedy.

We all must think much more creatively to address the problem at a core level. In the near future I will be including an article link here to help stimulate your thinking in terms of ethical health partnership.

Malpractice: Reforming the Law (Tort Reform)

What IS Tort Reform?

Tort reform is the most publicized and debated approach to reducing the rising costs, financial and emotional, of alleged medical malpractice. It is also called medical liability reform.

While doctors and lawyers blame each other and lawyers also blame insurance, it seems there is at least some truth in all positions. Physicians, nurses, hospitals and patients can do more to prevent injuries. Collecting data is not enough. Legal reform is necessary to set better boundaries and to be fairer to all physicians, while holding those who cause injury through negligence. Distinctions need to be made between negative or unexpected outcome, an error that occurs no matter how careful the physician is, known complications of procedures. Yet, the needs of people who have been injured, even when there is no malpractice or negligence, must be adequately addressed. It makes more sense to create and implement new ways to resolve claims, to provide care and economic needs of injured patients, to prevent future errors, to hold responsible the person or persons actually responsible, and to be fair to all parties involved, including physicians. Most adverse events, including most errors that cause serious injury, are not due to negligence. There is no doctor, even world renowned experts, who has not made a mistake. Yet, how can a patient who has been injured even though there is no negligence, be adequately taken care of, without having to allege negligence? Ethical health partnership holds all parties responsible for treating each other fairly and ethically. The current system does not do any of that very well.

I believe that for truly ethical health partnership to be created in these situations, alternative ways to address injuries MUST be developed and implemented. Litigation should be reserved for those situations where there is truly evidence of substandard care. However, until those alternatives are in place, the current system needs to be reformed.

According to National Statistics and Trends: A Snapshot of the Crisis only seven percent of medical liability cases went to trial, and of these, defendant's won 82.4 percent of them. (Jury Verdict Research, Current Award Trends in Personal Injury, 2002) I agree with physicians in saying this seems to be evidence of the number of unfounded claims. And yet, most of these people are injured. To me, it points out that most injuries are not the result of substandard care, yet somehow, the needs of people injured need to be addressed without alleging that the physician was negligent. I like my surgeon. I know she is extremely competent, careful, thorough, which is why I go to her. She gives me exceptional care. I have been very fortunate to have had good outcomes. And, I know she is human and no matter how careful she is, she could make a mistake. If I, as her patient, were ever injured in surgery, I would certainly want my medical needs taken care of. If as a result of that injury I could not work for a period of time, or for a lifetime, I would want my house and and basic needs paid. Yet, I would not want to sue her because a) I know she is would never be negligent and b) because I wouldn't want her to be punished because she is human. I would not want her to lose her practice because of the financial burden that could arise because of an injury to me or someone else. I would not want her to lose personal assets that she has spent a lifetime working for. Injuries are a known risk of her profession. She is willing to take that risk to help patients. BOTH of us should be protected. What adds to the personal burden of physicians, at least in Florida and some other states, is that many have had to 'go bare' which means they essentially self-insure. This is an unfair climate for physicians, especially specialists who typically have the highest premiums) to have to work. It's also not fair to patients.

Therefore, ethical health partnership, in which the well-being of all the partners is taken into consideration, calls for meaningful options for remedy before litigation is pursued. It calls for fairness to patients AND fairness to physicians who provide the care. I will explore options in a separate article. But right now, let's talk about liability reform.

Proposals for Tort Reform usually include some combination of the following:

* Cap Restrictions
* Contingency Fee Restrictions or Sliding Scale
* Joint & Several Liability
* Collateral Source
* Expert Testimony
* Periodic Payment

1. Cap Restrictions:
What is it?
Cap restrictions seek to place a set limit of the possible award for pain and suffering. Usually proponents suggest a cap of $250,000 although others have proposed higher limits. Sometimes people are confused when they hear the some of the rhetoric about caps. Caps DO NOT affect the amount a jury can award for medical costs or economic loss, past present and future. That remains unlimited. So if a person has lost income of $50,000, has expenses of $150,000, and is expected to lose $2 million in future lifetime income, plus $5million in medical care, ALL of that would still be paid with a cap of $250,000. Placing a cap on awards affects ONLY the "pain and suffering" component. Economic and medical loss award is separate and untouched.

Who wants it and why?
Physicians and physician associations, insurance, and most Americans. According to a 2003 Gallup poll 72% of those polled favored a law limiting amounts that can be awarded for emotional pain and suffering.

Insurance position: It helps create more stable losses which can be better predicted by insurance companies and can help regulate malpractice premiums. Part of the concern for both insurance, physicians and much of the general public is that jury awards have increased over the years making mega-awards possible. The median amount of jury awards has tripled from 1995 to 2000 in which it was $1 million, with the average being $3.5 million (Jury Verdict Research, Current Award Trends in Personal Injury, 2002) During that time of increase, the trend has been toward significantly higher portions of the award being for pain and suffering, rather than medical and economic loss. In 1997, only two medical liability verdicts topped $20 million. In 2001, at least 12 went above $20 million and three exceeded $100 million, including a $269 million judgment. (National Statistics and Trends: A Snapshot of the Crisis and Miami Herald, 02/03/02)

Insurance also believes that caps will help discourage questionable lawsuits, assuming that attorneys will not be willing to risk absorbing the costs it takes to prepare a case unless they are fairly certain of a return on their investment. Almost 70 percent of medical liability claims do not result in payments to plaintiffs. Less than one percent results in verdicts for plaintiffs. (Physician Insurers Association of America, in National Statistics and Trends: A Snapshot of the Crisis).

Pain and suffering awards are highly subjective and are not consistent across states or even similar cases.

Physician position: Physicians want them for the same reason insurance companies do, and for a few other reasons. One reason is that physicians' groups believe that this will help stop 'frivolous' lawsuits and the idea of a malpractice lawsuit as an easy way to make money (either for the patient or their attorney). Attorneys make their money on the "pain and suffering" portion of the award, since the medical and economic portions are designed to compensate and protect the patient. Physicians agree that injured patients need medical expenses and economic losses compensated. However, there is motive on the plaintiff side to gain through a jury sympathetic to the "pain and suffering" aspect. Doctors believe that the enticement of large pain and suffering awards motivates many malpractice claims.

Another part of the physician position is that most physicians know that most injuries and errors are not due to negligence, which means that the physician performed substandard care. They also know, either through personal experience, or through seeing a colleague go through a lawsuit, how devastating it is for a physician who is truly competent and caring to be accused of negligence, the foundation of any malpractice claim.

Excessive awards significantly impact the already increasing malpractice premiums for all physicians, even those who have never had a claim. With reimbursements from insurance decreasing and expenses rising, a large number of physicians are struggling to stay in practice. Others have given up and left active practice.

Who is opposed?
American Trial Attorney Association, personal injury attorneys and some patient groups.
Attorney position: Attorneys say that restricting the pain and suffering award, will not make it financially feasible for them to represent injured patients and that patients won't be able to get their day in court. Although attorney out-of-pocket expenses are covered in other ways, their salary comes out of this part of the award. They also argue that it is not the rate or amount of jury awards that cause high malpractice premium rates, but the insurance industry cycle, and some bad doctors.

My position: I do believe caps on pain and suffering are necessary, although in and of themselves, they do NOT guarantee that the cost of malpractice insurance for physicians will go down. To me, it is ONE of the steps that need to be taken. However, I also agree with attorneys that caps alone are not enough and that the insurance industry also needs to be held accountable. I also think that physicians and patients play a roles in malpractice that has less to do with injury than it does with poor communication, anger, unrealistic expectations, and reactions to losses of all kinds. Studies show that poor communication is a factor in the majority of malpractice claims.

There are no consistent guidelines for juries, so depending on how much sympathy the attorney can stir, the monetary awards can be dramatic, and unpredictable. As I am revising this page, I just read about the first Vioxx lawsuit against Merck. While it is different in some respects than usual medical malpractice, the need for caps for pain and suffering is evident. The wife of the man who died of heart problems was awarded $24 million for mental anguish and loss of companionship although they had been married less than one year and both were in their late 50's. That is a ridiculous amount that all of us will ultimately pay for in rising drug costs.

I firmly believe that injured patients need to receive compensation for medical expense and economic loss, but pain and suffering is a very undefined and subjective thing and great effort is made to play on sympathy and can be exploitive of the process of justice. I also support caps because I think an attorney making 40% or so of $250,000 is a fair salary . . . more than the physician makes. . . and that lack of caps make huge awards very appealing for some attorneys and some patients. While the majority of patients do not sue just for the money, unfortunately there are some that do. I recently read on a malpractice attorney's website that "while the first question many people ask is 'how much do you think I can get', I cannot answer that question until we investigate the case." So apparently there are significant numbers who are only interested in a big payday.

I think that we need to explore other ways of compensating injured patients that are quicker and fairer to them and to physicians (and the rest of us).

2. Contingency fee limitations: These are limits on the percentages of an award that an attorney can charge for his or her fees and how much of the award must go to the patient. Attorneys commonly take about 40% of an award, so much of the cost of "pain and suffering" is really about attorney fees for taking the case. I don't know how it is where you live, but in my city, it is the personal injury attorneys (who are the ones handling malpractice cases and other sawsuits) who have the biggest ads, the most billboards, TV & radio commercials . . .who have the most money to spend on advertising and expanding. You can guess who is for and who is against any limits on contingency fees.

3. Joint and several liability: This means that ANYONE named in a claim can be made responsible for the full amount of the award, no matter how much or how little responsibility they had for the adverse event . . .even if they are only 1% responsible. Some states have tried to address this by setting a minimum limit of the amount of responsibility needed (for example, 20%). Others have passed 'fair share' modifications, which means if some named in the suit was found to be 10% responsible, he or she would pay that portion of the award. A combination of a minimum percentage of responsibility AND a fair share approach can help, but I don't think it is enough.

My position: Part of me believes joint and several liability should be eliminated. If not eliminated, there definitely needs to be BOTH a fair share approach and a minimum level of responsibility specified. Patient responsibility should also be included in the proportions. My big concern with joint and several liability is that it encourages naming every possible person listed in a chart in an effort to find as many pockets as possible. Naming physicians, hospitals, nurses, and others in a lawsuit, just because their name shows up, or because they saw a patient, is not without consequence. Naming many defendants and then dropping them as the suit progresses, costs not only the people named (time off for depositions, lost work, lost income, emotional stress, and financial burdens), but it also cost the insurance companies, you and me. I think it is one of the things that adds to increase in defensive medicine (tests and procedures ordered that would not normally be if there were no fear of having to document later in a lawsuit). So even if a doctor just consults on a case, they have to cover their bases.

It costs money to defend, even if a physician is later dropped from a case, and that adds to the increasing malpractice costs and the subsequent impact on all of us. On the other hand, another part of me thinks that if there is a 50-50 responsibility with two defendants, then it could make sense that both be equally responsible in terms of payment. But boundaries need to be set to keep it from getting out of hand as it is now.

I believe that a uniform set of requirements to name someone in a lawsuit needs to be implemented. I think joint and several liability is also a way for attorneys to file a complaint against numerous defendants without doing the rigorous work of determining who might be responsible and who clearly is not. That becomes unfair and unethical. I recently saw something that said that attorneys themselves favored removing those few attorneys who file frivolous lawsuits. (I can't remember where I read it, but will try to find the source.)

4. Collateral Source: Collateral source means other sources of payment to the injured patient. These might include health insurance, disability insurance, workman's comp and more. The question is whether or not those should be brought into the malpractice hearings. Some state laws prohibit those from being identified and taken into consideration in an award.

My position: All states should require that those sources and the amounts paid or scheduled to be paid be identified to the court before any award decision is made. Otherwise, the person is getting paid two or three times for the same injury. I think of a recent malpractice case in my city involving a child with cerebral palsy. The jury estimated that her expenses for the future would be $16 million and then awarded more. However, people with disabilities receive income and medical care from Social Security and Medicaid. So, if medical expenses are paid, why the high expense award?

5. Expert testimony: This refers to doctors and others brought in to testify against the physicians, nurses, or hospitals to say that in their expert opinion, the responsible parties did not meet the standard of care in the case in question. The concern is in having someone who is current in the standards of care for the specialty in question and requiring them to be ethical in their testimony. We want the standards for expert testimony proposed by the Coalition and Center for Ethical Medical Testimony . In addition, experts are not adequately instructed by the court and even well-meaning experts can give biased testimony because that's what they think they are being hired to do. Expert testimony is big business. (More will be coming on this in a future article.)

Our proposal: Replace 'Experts for Hire' with a More Objective Method:
In the current system, both plaintiff and defendant pay to bring in experts sympathetic to their side. This process needs to be more objective for the court and the jury to receive the information they need to make a fair decision. Unfortunately there are physicians 'for hire' willing to slant testimony toward the side that pay them. This is unethical and unjust for both patients and physicians.

One option might be to:

List specialty area of medicine on license renewal and date of original medical license issued in any state in the United States. Use a system similar to jury pooling of relevant specialists in any malpractice trial, calling a group of specialists with at least 10 or more years experience in that specialty. If a specific procedure is in question, the expert pool must have at least matching years experience in that procedure as the defendant physician. Bring 4 of these 'experts' in . . . 3 to testify, one as alternate.

The expert physicians will be paid $100 per hour, with payment to be split between plaintiff and defendant.

Each expert physician, including the alternate, will review the patient records and other relevant information; interview as a group, the defendant physician about thinking, decision making, and behavior in the case; and interview the patient where possible.

They each will create a written report for the court regarding the above, the standard of care being used to determine whether or not there was negligence or substandard care, and specifically how, in their opinion, the defendant physician did and/or did not meet that standard of care. These reports and decisions will be created independently by each 'expert' physician. Report will be filed with the court with copy to both plaintiff and defendant. Each physician will be called to testify.

6. Periodic Payment
Periodic payment means that when a jury has determined an award for an injured patient, payment of that award is done in regular payments. Sometimes these payments are made as economic losses and needs occur. Often the insurance company or physician (if self insured or if he or she is liable for more than what insurance covers), funds an annuity from which the patient receives regular monthly payments. This has two benefits. One, it insures that the money for the patient's ongoing needs will be there. Some of the concern with lump sum payment is that the money is spent more quickly and sometimes on unnecessary things and runs out. It's a story one hears often with lottery winners. They win large sums of money and 5 or 10 years later are broke. Periodic payment provides steady income when the award is over a certain amount (in Florida, when over $250,000). Periodic payment also makes it more manageable for an individual physician who is paying all or part out of their pocket. For insurance companies, it helps make losses steadier and more predictable which can help create a climate for steadier and more reasonable premiums.

7. Jury of Peers
One of the fundamental principles of the American justice system is that every defendant has a right to a trial by jury of one's peers. To have juries without physicians judging physicians is not a jury of peers. 1/3-1/2 of jurors in malpractice trials should be physicians, with at least one or more licensed in the same specialty area as the defendant physician. This would create more equity and help juries process some of the complex information that is sometimes presented in malpractice cases.

Insurance Reform:
Of course, with caps, contingency restrictions, periodic payment or any of these reforms, insurance companies would also need to be held accountable for premium regulation and ethical relationship with physicians and consumers. A March 13, 2002 statement by the American Insurance Association said: "The insurance industry never promised that tort reform would achieve specific premium savings." Personal injury attorneys are correct when they claim that we need insurance reform and better regulation. That definitely needs to be PART of the solution to stabilize the current system.

We Need to Explore Alternatives Beyond the Current Tort System:
The system we have, while better than nothing, does not create ethical relationship with either injured patients or physicians, both those who are negligent and those who are not. The system has come to perpetuate injustice. Cases are not filed unless they are lucrative enough for a law firm. Because the whole system is based on alleged negligence and substandard care, most injured patients are left without needed help when they have significant medical expense and economic loss due to an avoidable injury. Right now, the only recourse they have is to struggle with economic loss in addition to their injury, or allege negligence even when it is clear there is none. The court system is adversarial, you versus me, winner versus loser. This sets patients and physicians in adversarial relationships and erodes trust even in the everyday relationships of patients and physicians. Patients and physicians need to work together to repair damage they both experience when injury occurs. (See An Ethical Approach to Patient Injury and Compensation )

Urge your legislators, state and federal, to support medical liability reform, but also to be proactive in implementing demonstration projects for alternatives:

Urge your legislators to not only support liability reform, but to make a commitment to push for effective alternative methods that would be more ethical for all patients, especially those injured, and all physicians.

Current legislation before the 109th Congress (scheduled to come up for vote in March, 2005).

List of articles on medical malpractice located on other sites