[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
HELP EFFICIENT, ACCESSIBLE, LOW-COST,
TIMELY HEALTHCARE (HEALTH) ACT OF 2003
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
ON
H.R. 5
__________
MARCH 4, 2003
__________
Serial No. 3
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://www.house.gov/judiciary
_______
U.S. GOVERNMENT PRINTING OFFICE
85-403 WASHINGTON : 2003
_____________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
WILLIAM L. JENKINS, Tennessee ZOE LOFGREN, California
CHRIS CANNON, Utah SHEILA JACKSON LEE, Texas
SPENCER BACHUS, Alabama MAXINE WATERS, California
JOHN N. HOSTETTLER, Indiana MARTIN T. MEEHAN, Massachusetts
MARK GREEN, Wisconsin WILLIAM D. DELAHUNT, Massachusetts
RIC KELLER, Florida ROBERT WEXLER, Florida
MELISSA A. HART, Pennsylvania TAMMY BALDWIN, Wisconsin
JEFF FLAKE, Arizona ANTHONY D. WEINER, New York
MIKE PENCE, Indiana ADAM B. SCHIFF, California
J. RANDY FORBES, Virginia LINDA T. SANCHEZ, California
STEVE KING, Iowa
JOHN R. CARTER, Texas
TOM FEENEY, Florida
MARSHA BLACKBURN, Tennessee
Philip G. Kiko, Chief of Staff-General Counsel
Perry H. Apelbaum, Minority Chief Counsel
C O N T E N T S
----------
MARCH 4, 2003
OPENING STATEMENT
Page
The Honorable Lamar Smith, a Representative in Congress From the
State of Texas, and Chairman, Subcommittee on Courts, the
Internet, and Intellectual Property............................ 1
The Honorable John Conyers, Jr., a Representative in Congress
From the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 3
WITNESSES
Mrs. Sherry Keller, Conyers, GA
Oral Testimony................................................. 4
Prepared Statement............................................. 6
Mrs. Leanne Dyess, Member, Coalition for Affordable and Reliable
Health Care
Oral Testimony................................................. 7
Prepared Statement............................................. 9
Dr. Donald J. Palmisano, M.D., President-Elect, American Medical
Association
Oral Testimony................................................. 11
Prepared Statement............................................. 12
Mr. Lawrence E. Smarr, President, Physician Insurers Association
of America
Oral Testimony................................................. 38
Prepared Statement............................................. 40
APPENDIX
Statements Submitted for the Hearing Record
Statement of the Alliance of Specialty Medicine.................. 910
Statement of Mary R. Grealy, President, Healthcare Leadership
Council........................................................ 98
Statement of Frank Clemente, Director, Public Citizen's Congress
Watch.......................................................... 99
Statement of the American College of Physicians-American Society
of Internal Medicine........................................... 178
Statement of the College of American Pathologists................ 180
Statement of the American Academy of Family Physicians........... 182
Statement of Rodney C. Lester, President of the American
Association of Nurse Anesthetists.............................. 183
Statement of the American College of Obstetricians and
Gynecologists.................................................. 186
Statement of Mr. John McCormack, Pembroke, Massachusetts
submitted by Representative Delahunt........................... 189
Material Submitted for the Hearing Record
Department of Health and Human Services report: Addressing the
New Health Care Crisis: Reforming the Medical Litigation System
to Improve the quality of Health Care, March 3, 2003........... 192
Ten questions and answers on H.R.5, the HEALTH Act............... 238
Remarks by the President on Medical Liability Reform at the
University of Scranton......................................... 246
The Washington Times Editorial by Bruce Bartlett, ``Toll of
Torrential Torts''............................................. 252
The Washington Times Editorial by Gary J. Andres and Michael
McKenna, ``Malpractice Remedies''.............................. 253
Letter from Premier to the Honorable Jim Greenwood, a
Representative in Congress From the State of Pennsylvania, in
support of H.R. 5.............................................. 254
HELP EFFICIENT, ACCESSIBLE, LOW-COST, TIMELY HEALTHCARE (HEALTH) ACT OF
2003
----------
TUESDAY, MARCH 4, 2003
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to call, at 9:20 a.m., in Room
2141, Rayburn House Office Building, Hon. Lamar S. Smith
presiding.
Mr. Smith. [Presiding.] The Judiciary Committee will come
to order. Today's hearing is on H.R. 5, the ``Help Efficient,
Accessible, Low-Cost, Timely Healthcare Act of 2003'',
otherwise known as the HEALTH Act.
We will start with opening statements by me and by the
Ranking Member, Mr. Conyers, and without objection, the opening
statements of all other Members will be made part of the
record.
Mr. Smith. After the opening statements, we will look
forward to hearing from our witnesses.
I will recognize myself first for an opening statement.
Today America faces a national insurance crisis that is
destroying our health care system. Medical liability insurance
rates have soared, causing major insurers either to drop their
coverage or raise premiums to unaffordable levels.
Doctors and other health care providers have been forced to
abandon patients and practices, particularly in high-risk
specialties such as emergency medicine, brain surgery,
obstetrics and gynecology.
Women are particularly hard hit, as are low-income
individuals and rural residents. This is an intolerable problem
that cries out for action.
H.R. 5, the HEALTH Act, is modeled after California's
quarter-century-old and highly successful health care
litigation reforms. Like California's Medical Injury
Compensation Reform Act, known as MICRA, the HEALTH Act
includes a $250,000 cap on noneconomic damages, limits on the
contingency fees lawyers can charge, and authorization for
defendants to introduce evidence to prevent double recoveries.
As a result of MICRA, since 1975 premiums paid in
California increased only 167 percent, while premiums paid in
the rest of the country increased 505 percent, or three times
as much. What works in California might work across America.
The Congressional Budget Office has found that, ``In States
that currently do not have controls on malpractice torts, the
HEALTH Act would significantly lower premiums for medical
malpractice insurance from what they would otherwise be under
current law.''
If California's legal reforms were implemented nationwide,
we could spend billions of dollars more annually on patient
care.
Nothing in the HEALTH Act limits in any way the award of
economic damages. Economic damages include anything of value
that can be quantified, including lost wages, lost services,
medical costs, and the cost of pain-reducing drugs and lifetime
rehabilitation care. Reasonable legal reforms, such as those in
the HEALTH Act, still allow for very large multimillion-dollar
awards to deserving victims. In just the last year, for
example, an injured child in California received an award of
$84 million, and a 30-year-old homemaker received an award of
$12 million for economic damages.
According to the Department of Health and Human Services,
``Unless a State has adopted limitations on noneconomic
damages, the cost of these awards is paid by all other
Americans through higher health care costs, higher health
insurance premiums, higher taxes, reduced access to quality
care, and threats to quality of care.''
The American people understand this problem. A poll
conducted in early February shows that 59 percent of Americans
believe the crisis should be solved, either by reining in
personal injury lawyers or by placing caps on the amounts
juries can award. The obvious cause of skyrocketing medical
liability premiums is escalating jury verdicts. The median
malpractice jury award doubled between 1995 and 2000 from a
half a million to $1 million, and that doesn't reflect the huge
cost of cases that don't result in jury awards. In fact, 70
percent of all medical malpractice claims result in no
payments, because claims are either dismissed or withdrawn.
The CEO of Methodist Children's Hospital in San Antonio,
and also one of the only three pediatric neurosurgeons in the
area, someone I met with just a few weeks ago, has seen his
premiums increase from less than $20,000 to $85,000 over the
last 10 years. He has been sued three times. In one case his
only interaction with the person suing was that he stepped into
her child's hospital room and asked how the child was doing.
Each jury cleared him of any wrongdoing, and the total amount
of time all three juries spent deliberating was less than 1
hour. Of course, the doctor's insurance company did spend a
great deal of time, money and effort on his defense.
Another doctor from Texas, a family physician, was sued 12
times in 13 years. All of the suits were dropped, but her
insurance went up nearly 200 percent.
An out-of control health care litigation system also costs
taxpayers billions of dollars annually. As former Democratic
Senator George McGovern has written, ``The legal fear drives
doctors to prescribe medicines and order tests, even invasive
procedures, that they feel are unnecessary. Reputable studies
estimate that this defensive medicine squanders $50 billion a
year, enough to provide medical care to millions of uninsured
Americans.''
As Representatives of the American people, Congress has a
choice. Will we help solve the current health care crisis by
passing the HEALTH Act?
Now, that concludes my opening statement, and now I will
recognize the gentleman from Michigan, Mr. Conyers, for his
opening statement.
Mr. Conyers. Thank you, Mr. Chairman. Good morning, Members
and friends. I am happy to be here. We are confronted with a
very important problem, and like many legislative problems, it
depends on what perspective you are looking at; it depends on
what experience you bring to the subject.
So I would like to begin with an economic consideration.
The reason malpractice insurance premiums are rising, the basic
reason, is that investment income by insurance companies is
plummeting. As we all know, insurers make their money, really,
mostly from investment income. During years of high stock
market returns and interest rates, malpractice premiums go
down. When investment income decreases, and we are in the
middle of a 4-year bear market, the industry responds by
sharply increasing premiums and reducing coverage, creating a
liability insurance crisis. This boom-bust cycle took place in
the 1970's and 1980's, and it is happening again now.
Another reason is that draconian laws capping damages do
not reduce insurance premiums. A comparison of States that have
enacted severe tort restrictions and those that have not, which
was performed by the Center for Justice and Democracy, found no
correlation between tort reform and insurance rates. Indeed,
some of the resisting States experienced lower increases in
insurance rates, while some States that enacted tort reforms
experienced higher rate increases relative to the national
trends.
For example, last year's data showed that in the practice
of internal medicine, States with caps on damages had higher
premiums than States without caps. For general surgeons,
insurance premiums were 2.3 percent higher in States with caps
on damages. On average, malpractice premiums were no higher in
the 27 States that have no limitation on malpractice damages
than in the 23 States that do have such limits.
Now, Mrs. Sherry Keller is here, so I am not going to tell
you about her situation, but with this bill the big insurance
companies are trying to convince us that the cause of
skyrocketing medical malpractice premiums is trial lawyers. And
they have really been bashed these last few years, haven't
they?
My colleagues, the reality is grossly negligent health care
professionals unfortunately have more to do with the high
awards than the lawyers. The reality is approximately 100,000
people die each and every year from medical malpractice.
Whatever the reasons for the anger the President has toward
lawyers, and he is one, his proposal doesn't hurt lawyers
nearly as much as it hurts innocent victims of medical
malpractice. We will all be watching very carefully and
listening to his remarks before the American Medical
Association, which will come on shortly.
I thank you for this opportunity, Mr. Chairman.
Mr. Smith. Thank you, Mr. Conyers.
I would like to thank all Members for their attendance
today. This is an important subject, and we appreciate their
interest and their presence, and also the interest shown by
those who are in the audience today as well.
Let's proceed to our witnesses, and our first witness is
Sherry Keller. Mrs. Keller is here today to tell us how her
experience with medical care left her severely injured.
Our next witness is Leanne Dyess, from Vicksburg,
Mississippi. She is here to testify about how this patient
access crisis has affected the lives of herself and her family.
Her husband Tony suffered from permanent brain injury because
neurosurgeons near the site of the car accident had been priced
out of the profession by unaffordable medical malpractice
liability insurance rates.
Our third witness is Donald J. Palmisano, who is a doctor
and a lawyer, as well as the president-elect of the American
Medical Association, which represents the Nation's physicians.
Dr. Palmisano is a general and vascular surgeon from New
Orleans, Louisiana, where he was selected recently as one of
the top doctors in New Orleans. Dr. Palmisano is also on the
board of directors of the National Patient Safety Foundation.
Our final witness is Lawrence E. Smarr, President of the
Physician Insurers Association of America. The Physician
Insurers Association of America is a trade association of more
than 60 medical professional liability companies owned and
operated by doctors and dentists. Collectively these companies
insure 60 percent of America's private practice physicians as
well as dentists, hospitals and other health care providers.
I thank you all for being with us here this morning. I need
to alert you to the fact that testimony will be limited to 5
minutes or less, if you want to summarize it, and we appreciate
your participating today. As I mentioned a while ago, your
complete statements will be made part of the record.
Speaking of that, let me take care of one matter here.
Without objection, I would also like to be made a part of the
record a new Health and Human Services report on medical
liability that was released yesterday, and two articles in The
Washington Times from yesterday on the President's speech at
the University of Scranton, in Pennsylvania on January 16th in
regard to medical malpractice reforms, and also 10 questions
and answers regarding the HEALTH Act. And without objection, so
ordered.
[The information referred to follows in the Appendix]
Mr. Smith. The gentleman from Massachusetts.
Mr. Delahunt. Thank you, Mr. Chairman. And before we begin,
I would also like to submit for the record a statement by Mr.
John McCormack of Pembroke, MA, who is a constituent of mine.
In there he explains what happened to his daughter as a result
of medical errors that had severe and profound consequences,
not just resulting in her death, but for the entire family.
Mr. Smith. Without objection, that will be made a part of
the record as well, Mr. Delahunt. Thank you.
[The information referred to follows in the Appendix]
Mr. Smith. Let's begin. Mrs. Keller, if you will start,
please.
STATEMENT OF SHERRY KELLER, CONYERS, GA
Mrs. Keller. Good day, ladies and gentlemen. I thank you
for the opportunity to speak to you today. My name is Sherry
Keller. I am a victim of medical malpractice, and I beg for
your consideration of my story and the McConnell amendment.
I come here at risk of my own best interests, but my
commitment to this cause commands my heart to do so without any
reservation. This is the issue, not the money. One week after a
complete hysterectomy, the staples were removed from my
incision site. That night the wound oozed, and upon
notification to my doctor, she told me to come into the office
so she could clean the wound.
I was placed up on the gyno bed. She began to clean the
wound, and when she did so, she pulled on it. And when she
pulled on it, I opened up like a Ziplock bag, hip to hip. While
I was now going to take a little bit more time than what she
had planned, she left me there like that, in the interim, to
see other patients, make a few phone calls. I had gone into
shock, lost consciousness, and fell from the bed, hitting my
head on the way down, C2 through C7 spinal cord injury, quite
similar to that of actor Christopher Reeve or that killed Dale
Earnhardt.
I lost and regained consciousness at least five times on
the floor of the doctor's office, in an effort to try to get
out into the hallway, in order to be found. Making it out to
the hallway, I called, ``Help me.'' the doctor and the nurses
then scrambled, saw me laying there like that, naked from the
waist down, my intestines hanging out, in severe shock. They
picked me up from the hallway, and that is when I began
screaming in pain and lost the use of my arms.
My husband was called back from the waiting room; an
argument between the two of them about whether or not I needed
an ambulance. She wanted him to take me to the ER on his own,
and he insisted that he could not handle me in that condition.
An ambulance was called, but I was not even afforded a neck
collar due to the doctor's orders of transport only.
Patient care meant nothing. Doctor's power meant
everything. Unbeknownst to me, she had called ahead to the ER
and let them know that I was her patient, and she would take
care of it.
I was left in the ER for 2\1/2\ hours before she was able
to get to the ER to dress my wound, my complaints of pain, the
obvious contusion to my head ignored, arm function limited by
that point, unable to stand completely on my own. I was just
sore from the fall. Go home. I was sent home with a broken neck
because of doctor power and doctor protocol. Patient care meant
nothing.
This is not to impugn all doctors. This is not to say all
doctors are bad. I do not hold resentment toward all doctors.
My neurosurgeon was a miracle worker. He saved me. But just as
there are good and bad lawyers, good and bad policemen, there
are good and bad doctors.
Our bad doctors need to be held accountable. Just as
President Bush has called for the executives of Enron to be
held accountable, doctors need to be held accountable, and the
only recourse I as a citizen have is our jury system. That is
my right. That is the only right and the only venue I have to
hold the physician accountable for the care and trust that we
are conditioned to give them. Even in a doctor office visit
they hold our lives in their hands, and far too often with far
too cavalier an attitude.
I had chosen to give up any form of a career in order to
raise my children, both college scholarship award winners, both
academically excelling very well, my younger is now straight
A's, both contributing to this society. But because of my
choice to bring in responsible members to society, my value
through this, through the McConnell bill, will be nothing.
Because I had no economic input, my value as a person is
nothing. The only award, the only recourse, the only
accountability I will have is through the pain and suffering.
I have heard several Representatives mention a malpractice
lawsuit is like winning the lottery. Well, I would like to ask
any of you who would turn over a limb or a lung or a life for a
lottery ticket. It is not a lottery. I am not in the position
to win anything. I would gladly give back Bill Gates' money if
I could trade it back for my spinal cord. No amount of
compensation is going to pay me back for what I have lost, the
ability for me to reach for this paper takes extraordinary
effort; the ability to just go to the bathroom, gone. Things
that we take--everyday movement, taken from me. I will never
have the freedom a healthy body has; never the complete use of
my arms, legs. I suffer every day, 24 hours a day. Every time I
have to try to reach for something, the pain is excruciating.
No amount of medicine can take the pain away. It can subside,
but it is always there. In my dreams I suffer. I am awakened
many times during the night because of problems in my spinal
cord. I can't even sleep through the night.
What kind of money is going to compensate that? None. But
to say that $250,000 is more than enough is an insult. I now
have to hire cleaning people, a driver to do basic errands, go
to the bank. A 10-minute trip to the grocery store now takes 3
hours, of which I have to hire somebody to do. I will have to
do so forever. These are out-of-pocket expenses that would not
be covered. All of the chores, the errands, gardening,
landscaping, cleaning, you name it, and for the rest of my life
I now have to hire somebody else to do it, and not only is it
degrading, but it is coming out of my pocket.
Mr. Smith. Mrs. Keller, thank you for your testimony.
[The prepared statement of Mrs. Keller follows:]
Prepared Statement of Sherry Keller
First, I want to thank Chairman Sensenbrenner and Congressman
Conyers. I greatly appreciate the opportunity you have given me. My
name is Sherry Keller and I am a victim of medical malpractice.
I am 44 years old. I live with my husband in Conyers, Georgia, a
suburb of Atlanta, and have two college-age sons. This is my story.
About 4 years ago, I underwent a complete hysterectomy. The doctor
failed to suture and staple the incision site, instead only stapling me
shut. One week after the staples were removed, I noticed that one area
of the wound was oozing. After reporting this to my doctor, I was
called into her office the next day so she could clean the wound.
Once there, she had me lie on the examination table. She pulled on
the incision, and I opened up like a zip-lock bag, just as though I
were in surgery. The doctor said she was going to call a wound care
specialist and then left me alone for 35-45 minutes while she saw other
patients and made personal calls to her home.
I went into shock, lost consciousness and fell from the table,
hitting my head on the counter on the way down, causing c2-c7 spinal
cord injury similar to that sustained by actor Christopher Reeve and
deceased race car legend Dale Earnhardt. I also suffered traumatic
brain injury and a severe concussion.
Eventually, after going in and out of consciousness at least 5
times, drenched in sweat and with my guts hanging out, I was able to
pull myself out into the hallway to get help. I was immediately picked
up out of the hallway so that other patients wouldn't see me, causing
me to lose all function in my arms.
The doctor then began arguing with my husband about why he, not an
ambulance, should take me to an emergency room. My husband finally
prevailed, and the doctor called for an ambulance. When the ambulance
came, I was not given a neck collar, because, as I later found out, the
doctor had requested transport only and the EMS workers were required
to follow her orders.
After arriving at the emergency room, I was basically given no
medical attention, because my doctor had instructed the ER that she
would take care of me when she arrived at the hospital. Two and a half
hours later, the doctor arrived, cleaned my wound and sent me home,
explaining that any pain and soreness I was experiencing were caused by
the fall. I was never given steroids, which could have reduced some of
the swelling and prevented the damage from progressing. Once home, I
kept falling down and could barely walk.
Now, four years later, I am an incomplete quadriplegic. I will
never have the freedom a healthy body has, never be able to use my arms
for the simplest of tasks, never walk holding a child's hand, never
explore and see the splendour of this country. Even a simple trip to
the bathroom is now gone. Every day, each and every day, for the rest
of my life.
We, as victims, endure pain and suffering 24 hours a day, with
physical pain that no amount of medicine can take away. Suffering comes
even in sleep, in dreams and in one's physical state every day and
every night. It will be so for the rest of my life, all at the hands of
one negligent physician, whom we as a society are conditioned to trust.
Far too cavalier an attitude within the medical ranks regarding
public trust results in untold pain and suffering within the general
public, to be lived constantly for our entire lives. The inability to
reach, sit, anything and everything the average person takes for
granted, also produces incalculable suffering. If pain and suffering
cannot be measured, how can it possibly be capped?
I gave my life to raising my 2 sons and taking care of my family. I
feel I've contributed more to society by the choice I made. But under
H.R. 5, my value is nothing. Despite the extent of my physical pain and
suffering, which forced me to abandon my hopes of becoming a painter,
the only compensation I would receive is $250,000. So when I hear
doctors and legislators say that medical malpractice awards are like
winning the lawsuit lottery, it really burns my butt.
It is an outrage that victims of medical malpractice are to be
trivialized for the profit margin of big business. In the shadow of
Enron, where President Bush called for the accountability of all
responsible, how can physicians not be held accountable for the extent
to which their errors have devastated lives?
Limiting compensation to victims while still fully protecting
doctors is not only terribly unfair, it is immoral, outrageous and
reeks of injustice. We are the innocent victims. To punish us a second
time literally adds insult to injury.
Doctors are meticulously trained to cure us, keep us alive and
improve our quality of life. They take a solemn oath to ``do no harm.''
It is a noble profession, a calling of sorts. We put our trust in
doctors unlike any other profession. They are human. Mistakes are made,
sometimes honest mistakes and sometimes blatantly incompetent ones.
Mistakes cost lives, create medical nightmares and destroy the lives of
victims and their families.
The goal must be to reduce medical negligence. This can only happen
if physicians are held accountable. Laws and proposals that increase
the obstacles sick and injured patients face in the already difficult
process of prevailing in court are the wrong way to respond to any
medical malpractice insurance ``crisis.'' Tort restrictions only reduce
the financial incentive of institutions like hospitals and HMOs to
operate safely, when our objectives should be deterring unsafe and
substandard medical practices while safeguarding patients' rights.
Caps cannot be allowed, not in a great society like ours that bases
itself on fairness and equality to all.
Thank you for your time and consideration.
Mr. Smith. Mrs. Dyess.
STATEMENT OF LEANNE DYESS, MEMBER, COALITION FOR AFFORDABLE AND
RELIABLE HEALTH CARE
Ms. Dyess. Chairman Smith, Ranking Member Conyers,
distinguished Members of the House Judiciary Committee, it is
an honor for me to sit here before you this morning to open up
my life and the life of my family in an attempt to demonstrate
how medical liability costs are hurting people across America.
While others may talk in terms of economics and policy
today, I want to speak to you from the heart. I want to share
with you the life my two children and I are now forced to live
because of a crisis in health care that I believe can be fixed.
And when I leave and the lights are turned off and the
television cameras go away, I want you and all America to know
one thing, and that is this crisis isn't about insurance. It is
not about doctors or even hospitals or personal injury lawyers.
It is a crisis about individuals and their access to what I
believe is otherwise the greatest health care in the world.
Our story began on July 5 of last year when my husband Tony
was returning from work in Gulfport, MI. We had started a new
business. Tony was working hard, as I was. We were doing our
best to build a life for our children, and their futures were
filled with promise. Everything looked bright.
Then in an instant everything changed. Tony was involved in
a single-car accident. They suspect he may have fallen asleep,
though we will never know. What we do know is that after
removing him from the car, they rushed Tony to Garden Park
Hospital in Gulfport. He had injuries and required immediate
attention.
Shortly thereafter, I received a phone call I pray no other
wife will ever have to receive. I was informed of the accident
and told the injuries were serious, but I cannot describe to
you the panic that gave way to hopelessness when they told me,
we don't have the specialists necessary to take care of him. We
will have to airlift him to another hospital.
I couldn't understand this. Gulfport is one of the fastest
growing and most prosperous regions in Mississippi. Garden Park
is a good hospital. Where were the specialists who could have
taken care of my husband?
Almost 6 hours passed before Tony was airlifted to
University Medical Center, 6 hours for the damage to his brain
to continue before they had a specialist capable of putting a
shunt into the back of his head to relieve the pressure on the
brain, 6 unforgettable hours that changed our life.
Today Tony is permanently brain-damaged. He is mentally
incompetent, unable to care for himself, unable to provide for
his children, unable to live the vibrant, active and loving
life he was living just moments before the accident.
I could share with you the panic of a women suddenly forced
into the role of both mother and father to her teenaged
children, of a women whose life is suddenly caught in limbo,
unable to move forward or backwards. I could tell you about a
woman who now had to worry about the constant care of her
husband, who had to make concessions she never thought she
would have to make in order to be able to pay for his care and
therapy.
But to describe this would be to take us away from the most
important point and value of what I have learned. Mr. Chairman,
I have learned that there was no specialist on staff that night
in Gulfport because rising medical liability costs had forced
physicians in that community to abandon their practices. In
that area, in that time, there was only one doctor who had the
expertise to take care of Tony, and he was forced to cover
multiple hospitals, stretching him thin and unable to care for
everyone. Another doctor quit his practice just days before
Tony was admitted because his insurance company terminated all
of the medical liability policies nationwide. That doctor could
not obtain affordable coverage. He couldn't practice. And on
that hot night in July, my husband and our family drew the
short straw.
I have also learned that Mississippi is not unique, that
this crisis rages in States all across America. It rages in
Nevada where young expectant mothers cannot find OB-GYNs. It
rages in Florida where children cannot find pediatric
neurosurgeons. It rages in Pennsylvania, where the elderly who
have come to depend on their orthopedic surgeons are being told
that those trusted doctors are moving to States where
practicing medicine is affordable and less risky.
The real danger of this crisis is that it is not readily
seen. It is like termites in the structure of a home. They get
into the woodwork, but you cannot see the damage. The walls of
the house remain beautiful, but you don't know what is going on
beneath the surface, at least not for a season. Then one day
you go to hang a picture or a shelf, and the whole wall comes
down. Everything is destroyed.
Before July 5, I was like most Americans, completely
unaware that just below the surface of our Nation's health care
delivery system serious damage was being done by excessive and
frivolous litigation.
Mr. Smith. Could I ask you to summarize the rest of your
testimony?
Ms. Dyess. In all of these cases, all across America, if
you go somewhere, to an emergency room, you expect there to be
a doctor there, all of us. We have to do whatever it takes,
whatever it takes, to get your child some care, your parents,
your grandparents, ourselves care when we need it. If we don't
do something, down the road she might not have a doctor to take
care of her, one that really does her the--like the
neurosurgeon she was talking about. We might not have anybody
to take care of us, any of us. We don't need to stand still.
Mr. Smith. Thank you, Mrs. Dyess.
[The prepared statement of Mrs. Dyess follows:]
Prepared Statement of Leanne Dyess
Chairman Sensenbrenner, Ranking Member Conyers, distinguished
members of the House Judiciary Committee:
It's an honor for me to sit before you this afternoon--to open up
my life, and the life of my family, in an attempt to demonstrate how
medical liability costs are hurting people all across America. While
others may talk in terms of economics and policy today, I want to speak
from the heart.
I want to share with you the life my two children and I are now
forced to live because of a crisis in health care that I believe can be
fixed. And when I leave and the lights turn off and the television
cameras go away, I want you--and all America--to know one thing, and
that is that this crisis is not about insurance. It's not about
doctors, or hospitals, or even personal injury lawyers. It's a crisis
about individuals and their access to what I believe is, otherwise, the
greatest health care in the world.
Our story began on July 5th of last year, when my husband Tony was
returning from work in Gulfport, Mississippi. We had started a new
business. Tony was working hard, as was I. We were doing our best to
build a life for our children, and their futures were filled with
promise. Everything looked bright. Then, in an instant, it changed.
Tony was involved in a single car accident. They suspect he may have
fallen asleep, though we'll never know.
What we do know is that after removing him from the car, they
rushed Tony to Garden Park hospital in Gulfport. He had head injuries
and required immediate attention. Shortly thereafter, I received the
telephone call that I pray no other wife will ever have to receive. I
was informed of the accident and told that the injuries were serious.
But I cannot describe to you the panic that gave way to hopelessness
when they somberly said, ``We don't have the specialist necessary to
take care of him. We need to airlift him to another hospital.''
I couldn't understand this. Gulfport is one of the fastest growing
and most prosperous regions of Mississippi. Garden Park is a good
hospital. Where, I wondered, was the specialist--the specialist who
could have taken care of my husband?
Almost six hours passed before Tony was airlifted to the University
Medical Center--six hours for the damage to his brain to continue
before they had a specialist capable of putting a drain into his head
to relieve the pressure on his brain--six unforgettable hours that
changed our life.
Today Tony is permanently brain damaged. He is mentally
incompetent, unable to care for himself--unable to provide for his
children--unable to live the vibrant, active and loving life he was
living only moments before his accident.
I could share with you the panic of a woman suddenly forced into
the role of both mother and father to her teenage children--of a woman
whose life is suddenly caught in limbo, unable to move forward or
backward. I could tell you about a woman who now had to worry about the
constant care of her husband, who had to make concessions she thought
she'd never have to make to be able to pay for his therapy and care.
But to describe this would be to take us away from the most important
point and the value of what I learned.
Chairman Sensenbrenner, I learned that there was no specialist on
staff that night in Gulfport because rising medical liability costs had
forced physicians in that community to abandon their practices. In that
area, at that time, there was only one doctor who had the expertise to
care for Tony and he was forced to cover multiple hospitals--stretched
thin and unable to care for everyone. Another doctor had recently quit
his practice just days before Tony was admitted because his insurance
company terminated all of the medical liability policies nationwide.
That doctor could not obtain affordable coverage. He could not
practice. And on that hot night in July, my husband and our family drew
the short straw.
I have also learned that Mississippi is not unique, that this
crisis rages in states all across America. It rages in Nevada, where
young expectant mothers cannot find ob/gyns. It rages in Florida, where
children cannot find pediatric neurosurgeons. And it rages in
Pennsylvania, where the elderly who have come to depend on their
orthopedic surgeons are being told that those trusted doctors are
moving to states where practicing medicine is affordable and less
risky.
The real danger of this crisis is that it is not readily seen. It's
insidious, like termites in the structure of a home. They get into the
woodwork, but you cannot see the damage. The walls of the house remain
beautiful. You don't know what's going on just beneath the surface. At
least not for a season. Then, one day you go to hang a picture or shelf
and the whole wall comes down; everything is destroyed. Before July
5th, I was like most Americans, completely unaware that just below the
surface of our nation's health care delivery system, serious damage was
being done by excessive and frivolous litigation--litigation that was
forcing liability costs beyond the ability of doctors to pay. I had
heard about some of the frivolous cases and, of course, the awards that
climbed into the hundreds of millions of dollars. And like most
Americans I shook my head and said, ``Someone hit the lottery.''
But I never asked, ``At what cost?'' I never asked, ``Who has to
pay for those incredible awards?'' It is a tragedy when a medical
mistake results in serious injury. But when that injury--often an
accident or oversight by an otherwise skilled physician--is compounded
by a lottery-like award, and that award along with others make it too
expensive to practice medicine, there is a cost. And believe me, it's a
terrible cost to pay.
Like most Americans, I did not know the cost. I did not know the
damage. You see, Mr. Chairman, it's not until your spouse needs a
specialist, or you're the expectant mother who needs an ob/gyn, or it's
your child who needs a pediatric neurosurgeon, that you realize the
damage beneath the surface.
From my perspective, sitting here today, this problem far exceeds
any other challenge facing America's health care--even the challenge of
the uninsured. My family had insurance when Tony was injured. We had
good insurance. What we didn't have was a doctor. And now, no amount of
money can relieve our pain and suffering. But knowing that others may
not have to go through what we've gone through could go a long way
toward helping us heal.
Congressman Sensenbrenner, I know of your efforts to see America
through this crisis. I know this is important to you, and that it's
important to the President. I know of the priority Congress is placing
upon doing something... and doing it now. Today, I pledge to you my
complete support. It is my prayer that no woman--or anyone else--
anywhere will ever have to go through what I've gone through, and what
I continue to go through every day with my two beautiful children and a
husband I dearly love.
Mr. Smith. Dr. Palmisano.
STATEMENT OF DONALD J. PALMISANO, M.D., PRESIDENT-ELECT,
AMERICAN MEDICAL ASSOCIATION
Dr. Palmisano. Thank you, Mr. Chairman. Good morning. I am
Donald Palmisano, president-elect of the American Medical
Association, and a surgeon from New Orleans.
The policy of the American Medical Association is decided
through a democratic policymaking process involving physician
delegates representing every State, nearly 100 national
specialty societies, Federal service agencies and other group
sections. AMA policy dictates support for national medical
liability reform. My testimony represents this policy.
So again, Mr. Chairman, thank you for inviting the AMA to
participate in today's hearing. I want to express our gratitude
to you and the other cosponsors of H.R. 5 for your efforts to
bring reasonable reforms to our broken medical liability
system.
Mr. Chairman, you know that our health care system is
facing a crisis when patients have to leave their State to
receive urgent surgical care, or when a pregnant woman cannot
find an OB-GYN physician to monitor her pregnancy and deliver
her baby, or when community health centers have to reduce their
services or close their doors because of liability insurance
concerns.
You know that our health care system is facing a crisis
when efforts to improve patient safety and quality are stifled
because of lawsuit fears. Escalating jury awards and the high
costs of defending against lawsuits, even meritless suits, are
causing medical liability insurance premiums to soar. Several
recent Government and private sector reports referenced in our
written testimony confirm this. Over the past 2 years, many
physicians have been hit with medical liability premium
increases of 25 percent to 400 percent, and reports show that
the average jury award is reaching $3.5 million.
The medical liability crisis is a growing national problem
that affects more than just physicians and other health care
professionals and institutions. The medical liability crisis
has become a serious problem for patients, affecting their
ability to access health care services that would otherwise be
available to them, including services provided to Medicare and
Medicaid patients. As medical liability insurance becomes
unaffordable or unavailable, physicians are being forced to
close their practices or drop vital services, seriously
affecting patient access to care.
There are now 18 States that are in crisis, up from 12
States last year, and in many other States a crisis is looming.
A key provision of H.R. 5 is a $250,000 limit on noneconomic
damages.
There is a direct and compelling Federal interest in
reforming our outmoded medical liability system. According to
estimates by HHS, excessive medical liability adds $47 billion
annually to what the Federal Government pays for Medicare,
Medicaid and other Government programs. We need a national
solution. And I mention--that is why the AMA is supporting H.R.
5, and that is why we join with numerous other members of a
broad-based coalition known as the Health Coalition on
Liability and Access to urge this Congress to promptly reform
the medical liability system.
A key provision is the $250,000 noneconomic cap, and there
is flexibility in the bill for States to adjust the cap to suit
their particular circumstances. In Florida, a nonpartisan task
force recently found that the greatest long-term impact on
health care provider liability insurance rates is a $250,000
cap on noneconomic damages, which would eliminate crisis of
availability and affordability of health care in Florida.
As discussed in our written statement, this limit on
noneconomic damages has worked in California, and it can work
nationwide.
Mr. Chairman, as you have recognized, the time for action
is past due. We must act now to fix our broken medical
liability system. Recent polls show that the American public is
in favor of reasonable limits on noneconomic damages. We must
bring common sense back to our courtrooms so patients can have
access to their physicians, whether in emergency rooms,
delivery rooms or operating rooms. Thank you very much.
Mr. Smith. Thank you, Dr. Palmisano.
[The prepared statement of Dr. Palmisano follows:]
Prepared Statement of Donald J. Palmisano, MD, JD
On behalf of the physician members of the American Medical
Association (AMA), I appreciate the opportunity to testify before you
today regarding an issue that is seriously threatening the availability
of and access to quality health care for patients. I would especially
like to express our gratitude to you, Mr. Chair, and other Members of
the Committee who are cosponsors of H.R. 5, for providing a much needed
focus for action at the national level.
I am Donald Palmisano, MD, JD, President-elect of the AMA and a
general and vascular surgeon from New Orleans, LA. The policy of the
AMA is decided through its democratic policy-making process in the AMA
House of Delegates, which meets twice a year. Our House is comprised of
physician delegates representing every state, nearly 100 national
medical specialty societies, federal service agencies (including the
Surgeon General of the United States), and six sections representing
hospital and clinic staffs, resident physicians, medical students,
young physicians, medical schools, and international medical graduates.
AMA policy dictates support for national medical liability reform. In
particular, the AMA supports H.R. 5, the HEALTH Act.
Mr. Chair, you know that our health care system is facing a crisis
when patients have to leave their state to receive urgent surgical
care. You know that our health care system is facing a crisis when
pregnant women cannot find an OB/GYN to monitor their pregnancy and
deliver their baby. You know that our health care system is facing a
crisis when community health centers have to reduce their services or
close their doors because of liability insurance concerns. You know
that our health care system is facing a crisis when dedicated
professionals, who have trained for years, want to give up the work of
a lifetime and retire. You know that our health care system is facing a
crisis when physicians and other health care professionals believe they
work in a culture of fear, rather than a culture of safety. You know
that our health care system is facing a crisis when efforts to improve
patient safety and quality are stifled because of lawsuit fears. An
unrestrained medical liability system is driving our health care system
into crisis.
As you have recognized, the time for action is past due. Physicians
across the country are making decisions now, and more and more patients
are wondering, ``Will their doctor be there?'' We must act now to fix
our broken medical liability system. That is why we are here supporting
H.R. 5, and that is why we join with numerous other members of a broad-
based coalition known as the Health Coalition for Liability and Access
to urge this Congress to promptly reform the medical liability system.
access to care is at risk
The crisis facing our nation's medical liability system has not
waned--in fact, it is getting worse. Escalating jury awards and the
high cost of defending against lawsuits, even frivolous ones, have
caused medical liability insurance premiums to reach unprecedented
levels. As a result, a growing number of physicians can no longer find
or afford liability insurance. Over the past two years, many physicians
have been hit with medical liability premium increases of 25 to 400
percent. Some hospitals have seen premiums increase 140 percent in the
same time period.
The most troubling aspect of this crisis is its impact on patients.
As insurance becomes unaffordable or unavailable, physicians are being
forced to close their practices or drop vital services--all of which
seriously impede patient access to care. Emergency departments are
losing staff and scaling back certain services such as trauma units.
Many obstetrician-gynecologists and family physicians have stopped
delivering babies, and some advanced and high-risk procedures (such as
neurosurgery) are being postponed because physicians can no longer
afford or even find the liability insurance they need to practice.
According to the American Hospital Association's 2002 TrendWatch 1,
more than 26% of health care institutions have reacted to the liability
crisis by cutting back on services, or even eliminating some units.
A 2002 survey conducted by Wirthlin Worldwide shows that 78 percent
of Americans say they are concerned about access to care being affected
because doctors are leaving their practices due to rising liability
costs.
Virtually every day for the past year there has been at least one
major media story on the plight of American patients and physicians as
the liability crisis reaches across the country. Access to health care
is now seriously threatened in states such as Florida, Georgia,
Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania,
Texas, Washington, and West Virginia. On top of this, we expect at
least five more states to be in a full blown crisis in the near future,
with a crisis looming in at least 26 other states. A sample of media
reports in the appendices to this testimony illustrates the problems
faced by patients and physicians in some of these states--problems many
other states will face if effective tort reforms are not enacted.
We must bring common sense back to our courtrooms so that patients
have access to their emergency rooms, delivery rooms, operating rooms,
and physicians' offices.
the litigation system is causing the crisis
The primary cause of the growing liability crisis is the
unrestrained escalation in jury awards that are a part of a legal
system that in many states is simply out of control. While there have
been several articles published since the mid-1990s indicating that
increases in jury awards lead to higher liability premiums, in the last
year a growing number of government and private sector reports show
that increasing medical liability premiums are being driven primarily
by increases in lawsuit awards and litigation expenses.
In his State of the Union Address last month, President Bush
stressed that we all are threatened by a legal system that is out of
control. The President stated that ``Because of excessive litigation,
everybody pays more for health care and many parts of America are
losing fine doctors.'' The President's remarks are substantiated in
several recent government and private sector reports--reports making
clear that the medical liability litigation system in the United States
has evolved into a ``lawsuit lottery,'' where a few patients and their
lawyers receive astronomical awards and the rest of society pays the
price as access to health care professionals and services are reduced.
RECENT FEDERAL GOVERNMENT REPORTS
In a July 2002 report released by the U.S. Department of Health and
Human Services (HHS), the federal government concluded that the
excesses of the litigation system are threatening patients' access to
health care. This federal government report states that insurance
premiums are largely determined by the litigation system, and that the
litigation system is inherently costly, unpredictable, and slow to
resolve claims. Just to defend a claim now costs on average over
$24,000. Further, the fact that about 70 percent of claims end with no
payment to the patient indicates the degree to which substantial
economic resources are being squandered on fruitless legal wrangling--
resources that could be used to reduce health costs so that more
Americans could find health insurance.
Even when there is a large award in favor of an injured patient, a
large percentage of the award never reaches the patient. Attorney
contingent fees, added with court costs, expert witness costs, and
other ``overhead'' costs, can consume 40-50 percent of the compensation
meant to help the patient.
On September 25, 2002, HHS issued an update on the medical
liability crisis. This update reported on the results of a survey
conducted by Medical Liability Monitor (MLM), an independent reporting
service that tracks medical professional liability trends and issues.
According to MLM, the survey determined that the crisis identified in
HHS's July report had become worse. The federal government reported
that:
The cost of the excesses of the litigation system are reflected
in the rapid increases in the cost of malpractice insurance
coverage. Premiums are spiking across all specialties in 2002.
When viewed alongside previous double-digit increases in 2000
and 2001, the new information further demonstrates that the
litigation system is threatening health care quality for all
Americans as well as raising the costs of health care for all
Americans. (emphasis added)
This federal government update further highlights that liability
insurance rates are escalating faster in states that have not
established reasonable limits on unquantifiable and arbitrary non-
economic damages. The government's report states that:
. . . 2001 premium increases in states without litigation
reform ranged from 30-75%. In 2002, the situation has
deteriorated. States without reasonable limits on non-economic
damages have experienced the largest increases by far, with
increases of between 36-113% in 2002. States with reasonable
limits on non-economic damages have not experienced the same
rate spiking. (emphasis added)
HHS also compared the range of physician liability insurance
premiums for certain specialties in California, which has established
reasonable limits on awards for non-economic damages, to the premiums
in states that have not enacted similar limits. The results reveal how
excessive awards for non-economic damages affect premiums. For example,
in 2002, OB/GYNs in California paid up to $72,000 in medical liability
premiums. In Florida, which does not limit non-economic damage awards,
OB/GYNs paid up to $211,000 for liability coverage.
Further, a 2002 Congressional Budget Office study on H.R. 4600
(107th Congress), which included a limitation on non-economic damages,
asserts that:
CBO's analysis indicated that certain tort limitations,
primarily caps on awards and rules governing offsets from
collateral-source benefits, effectively reduce average premiums
for medical malpractice insurance. Consequently, CBO estimates
that, in states that currently do not have controls on
malpractice torts, H.R. 4600 would significantly lower premiums
for medical malpractice insurance from what they would
otherwise be under current law.
In Florida, as indicated in the example given above, medical
liability premiums are among the highest in the nation. The situation
in Florida has become so dire that Governor Bush created a special Task
Force to examine the availability and affordability of liability
insurance. This Task Force held ten hearings over a five month period
and received extensive testimony and information from numerous, diverse
sources.
Among the many findings in its report released on January 29, 2003,
the Governor's Task Force found that the level of liability claims paid
was the main cause of the increases in medical liability insurance
rates. The Task Force ultimately concluded that ``the centerpiece and
the recommendation that will have the greatest long-term impact on
healthcare provider liability insurance rates, and thus eliminate the
crisis of availability and affordability of healthcare in Florida, is a
$250,000 cap on non-economic damages.''
RECENT PRIVATE SECTOR REPORTS
Evidence that the litigation system is broken, and that the medical
liability crisis is growing, is further established in a study released
by Tillinghast-Towers Perrin on February 11, 2003. Tillinghast reported
that ``The cost of the U.S. tort system grew by 14.3% in 2001, the
highest single-year percentage increase since 1986,'' which is
``equivalent to a 5% tax on wages.'' This is the only study that tracks
the cost of the U.S. tort system from 1950 to 2001 and compares the
growth of tort costs with increases in various U.S. economic
indicators. Some of the key findings of this study are stunning:
The U.S. tort system is a highly inefficient method
of compensating injured parties, returning less than 50 cents
on the dollar to people it is designed to help and returning
only 22 cents to compensate for actual economic loss.
As of 2001, U.S. tort costs accounted for slightly
more than 2% of GDP, signaling an increase after a 13-year
decline in the ratio of tort costs to GDP.
While the cost of the U.S. tort system has increased
one hundred fold over the last fifty years, GDP has grown by a
factor of only 34.
Medical malpractice costs have risen an average of
11.6% a year since 1975 in contrast to an average annual
increase of 9.4% for overall tort costs, outpacing increases in
overall U.S. tort costs.
The study also adds that ``These trends continued in 2002, with no
sign of abatement in the near future.'' In a press release accompanying
this study, a Tillinghast principal stated that, ``Absent sweeping tort
reform measures, we expect most of these trends to continue in 2003 and
beyond.''
In a 2001 report by Jury Verdict Research, data show that in just a
one year period (between 1999 and 2000) the median jury award increased
43 percent. Further, median jury awards for medical liability claims
grew at 7 times the rate of inflation, while settlement payouts grew at
nearly 3 times the rate of inflation. Even more telling, however, is
that the proportion of jury awards topping $1 million increased from 34
percent in 1996 to 52 percent in 2000. More than half of all jury
awards today top $1 million, and the average jury award has increased
to about $3.5 million.
These are just a few examples of growing evidence that reveal that
out-of-control jury awards are inexorably linked to the severe
increases in medical liability insurance premiums. It is clear that
corrective action through federal legislation is urgently needed.
BLAMING INSURANCE INDUSTRY INVESTMENTS IS A RED HERRING
Organizations opposing H.R. 5 have claimed that soaring medical
liability insurance premiums are the result of declining investments in
the insurance industry, and that liability reforms do not stabilize the
insurance market. The reports discussed above, as well as several other
authoritative and credible studies, reveal such claims to be
misleading, based on flawed analysis, and contrary to the facts.
Last month, Brown Brothers Harriman & Co. (BBH) released a report
(``Did Investments Affect Medical Malpractice Premiums?'') that
analyzed the impact of insurers' asset allocation and investment income
on the premiums they charge. BBH concluded that there is no correlation
between the premiums charged by the medical liability insurance
industry, on the one hand, and the industry's investment yield, the
performance of the U.S. economy, or interest rates, on the other hand.
In addition, on February 4, 2003, BBH released an addendum to this
study that analyzed National Association of Insurance Commissioners
(NAIC) data to determine whether investment gains by medical liability
insurance companies declined in the recent bear market. BBH asked the
question: ``Did medical malpractice companies raise premiums because
they had come to expect a certain percentage gain that was not achieved
due to market conditions?'' BBH determined that the decline in equities
(which are a small percentage of insurance company investments) was
more than offset by the capital gains by bonds (which make up a
substantial part of insurance company investments) due to a decline in
interest rates. BBH concluded that ``investments did not precipitate
the current crisis.''
BBH's findings are corroborated by other recent reports. On
September 25, 2002, HHS released an update on the medical liability
crisis addressing claims that the crisis is caused by the management
practices of the insurance industry. HHS concluded that such claims are
not supported by facts, stating ``Comparisons of states with and
without meaningful medical liability reforms provide clear evidence
that the broken medical litigation system is responsible.''
In addition, a summary of medical liability insurer annual
statement data in A.M. Best's Aggregates & Averages, Property-Casualty,
2002 edition shows that the investment yields of medical malpractice
insurers have been stable and positive since 1997. A.M. Best reports
that medical liability insurers have approximately 80% of their
investments in the bond market. Also, recent NAIC data show that
physicians' medical liability insurance premiums between 1976-2000 have
risen 167% in California (which established effective liability reforms
in 1975) compared to 505% in the rest of the United States.
The report on which H.R. 5 opponents base most of their
speculations, produced under the direction of J. Robert Hunter for the
Americans for Insurance Reform (AIR), is flawed in a number of ways.
The AIR/Hunter study purports that there is no current explosion in
medical liability insurance payouts, and that the explosion in medical
liability insurance premiums is due to the insurance underwriting
cycle. While medical liability insurance premiums, medical liability
award payouts, and tort law factors differ across states, the premium
and payout data presented in AIR's report are at the national level.
One cannot use national data to draw valid conclusions about how state-
specific changes in premiums may be related to state-specific changes
in payouts. Conclusions about what has or has not caused recent premium
escalation without accounting for the state-level factors listed above
are unsupportable.
In addition to claiming that the current medical liability crisis
is an insurance issue, there have been attempts to argue that medical
liability insurance premium rates in California have remained stable
because of Proposition 103, not because of the successful medical
liability reforms (known as MICRA-discussed later) that have been in
place in California since 1975. Such claims are misguided. Proposition
103, also known as the Insurance Rate Reduction and Reform Act, applies
to all lines of insurance, not just medical liability insurance. It was
passed as an initiative by the voters in 1988 (thirteen years after
MICRA), yet did not take effect until 1989. This is when the state's
high court struck down its rate rollback provisions while maintaining
the remainder of the law.
Proposition 103 implemented a basic standard that ``no rate shall
be approved or remain in effect which is excessive, inadequate,
unfairly discriminatory or otherwise in violation of this chapter.''
However, Proposition 103 provides that ``every insurer which desires to
change any rate shall file a complete rate application with the
commissioner.'' Proposition 103 also requires that the Department of
Insurance grant a hearing for a challenge to any increase above 15
percent for commercial lines of insurance.
According to Californians Allied for Patient Protection, ``Insurers
have regularly applied for and obtained significant rate increases in
all lines of insurance, except medical liability where MICRA has kept
the rates from rising astronomically. Between September and the end of
October, 2002, for instance, the Insurance Department approved more
than 75 applications for double-digit increases in insurance rates.''
None of these approved increases included medical liability insurance.
This illustrates that Proposition 103 is not responsible for keeping
medical liability premiums down. Rather, as we discuss later, it is
MICRA that has been the force behind California's success.
Such misdirected claims as discussed above are a disservice to
patients who are losing access to health care services, and an affront
to the physicians and other health care professionals who dedicate
their lives to healing and caring for the sick and working to find ways
to improve the quality of care. America's medical liability crisis is
too serious and the consequences of inaction too grave for the public
and Congress to use anything but the facts to make decisions about
reform. In short, these claims are counterproductive to the debate on
resolving the medical liability crisis.
FEDERAL SOLUTION
The medical liability crisis is a growing national problem that
requires a national solution. If the crisis was just a matter of
physicians obtaining or affording medical liability insurance in one
state, we might agree that a national approach would not necessarily be
required. However, the problem goes far beyond physicians and other
health care professionals and institutions. The medical liability
crisis has become a serious problem for patients and their ability to
access health care services that would otherwise be available to them,
including services provided to Medicare and Medicaid patients.
Also, the premise that it is within the ability of every state to
enact legislation to effectively resolve their respective medical
liability crisis has been shattered by the fact that many state
liability reform laws have been nullified by activist state courts or
stripped of their most effective provisions under state constitutions
that limit reforms. Taking into consideration that studies show the
litigation system to be an ineffective, and often unfair, mechanism for
resolving medical liability claims, we believe that the time is ripe
for a uniform, federal approach to resolving the liability crisis.
Moreover, there is a direct and compelling federal interest in
reforming our outmoded medical liability system. According to estimates
by HHS, altogether medical liability adds $60 billion to $108 billion
to the cost of health care each year. This means higher health
insurance premiums and higher medical costs for all Americans, and
especially for the federal government given that one-third of the total
health care spending in our country is paid by the Medicare and
Medicaid Programs. Further, HHS estimates that excessive medical
liability adds $47 billion annually to what the federal government pays
for Medicare, Medicaid, the State Children's Health Insurance Program,
Veterans' Administration health care, health care for federal
employees, and other government programs.
THE LIABILITY CRISIS AND PATIENT SAFETY
The AMA's policy is to be part of the solution to improving patient
safety and quality. The AMA believes that one preventable error is one
error too many. In fact, the AMA helped launch the National Patient
Safety Foundation (NPSF) in 1996 to address patient safety issues, well
before publication of the IOM report. The NPSF's approach is to create
a culture of cooperative learning and mutual improvement, as opposed to
a culture of shame and blame.
Quality of care improves when there is greater access to physicians
and health care services. A culture of safety requires a legal
environment that encourages professionals and organizations to work
together to identify problems in providing care, evaluate the causes,
and use that information to improve care for all patients. An over-
litigious system is anathema to building a strong and effective
national patient safety program.
Under our current liability system, the reality of being sued is
daunting to just about everyone in the medical community. A 2002 Harris
Interactive study (The Fear of Litigation Study--The Impact on
Medicine) illustrates just how detrimental the litigious nature of our
society is to physicians and other health care professionals. This
study reveals the extent to which the fear of litigation affects the
practice of medicine and the delivery of health care--``From the
increased ordering of tests, medications, referrals, and procedures to
increased paperwork and reluctance to offer off-duty medical
assistance, the impact of the fear of litigation is far-reaching and
profound.''
The study shows, among other things, that more than three-fourths
(76%) of physicians believe that concern about medical liability
litigation has negatively affected their ability to provide quality
care in recent years, and nearly all physicians and hospital
administrators feel that unnecessary or excessive care is provided
because of litigation fears. It also shows that an overwhelming
majority of physicians (83%) and hospital administrators (72%) do not
trust the current system of justice to achieve a reasonable result to a
lawsuit.
The Harris study found that a majority (59%) of physicians believe
(``a lot'') that the fear of liability discourages open discussion and
thinking about ways to reduce health care errors. The AMA has long
believed that health professionals and organizations should be
encouraged to report and evaluate health care errors and to share their
experiences with others in order to prevent similar occurrences.
However, this ``culture of fear'' caused by our over-litigious society
suppresses such information.
The AMA strongly supports the principle underlying the 1999
Institute of Medicine (IOM) report entitled, To Err is Human: Building
a Safer Health System, that the health care system needs to transform
the existing culture of blame and punishment, which suppresses
information about errors, into a ``culture of safety'' that focuses on
openness and information-sharing to improve health care and prevent
adverse outcomes. The AMA also supports the IOM's focus on the need for
a system-wide approach to eliminating adverse outcomes and improving
safety and quality, instead of focusing on individual components of the
health system in an isolated or punitive way.
Toward this end, the AMA supports H.R. 663, the ``Patient Safety
and Quality Improvement Act,'' which was favorably reported by the
House Energy & Commerce Committee on February 12, 2003. H.R. 663 would
provide a framework to create a ``culture of safety'' by establishing a
confidential, non-punitive, and evidence-based system for reporting
health care errors. There is a very broad and strong consensus of
agreement on this legislative approach within the health care
community. By implementing this approach, errors can be identified and
analyzed to improve patient safety by preventing future errors.
In addition to patient safety and quality improvement, the fear of
litigation stifles the advancement of new medical treatments and
medications, encourages physicians to practice defensive medicine,
overwhelms the health care system with paperwork--leaving less time for
patient care, and discourages qualified candidates from pursuing a
career in medicine or from moving to a state with a bad liability
climate.
THE PRACTICAL SOLUTION
The AMA recognizes that injuries due to negligence do occur in a
small percentage of health care interactions, and that they can be as
devastating or worse to patients and their families than injury due to
natural illness or unpreventable accident. When injuries occur and are
caused by a breach in the standard of care, the AMA believes that
patients are entitled to prompt and fair compensation.
This compensation should include, first and foremost, full payment
of all out of pocket ``economic'' losses. The AMA also believes that
patients should receive reasonable compensation for intangible ``non-
economic'' losses such as pain and suffering and, where appropriate,
the right to pursue punitive damages.
Unfortunately, our medical liability litigation system is neither
fair nor cost effective in making a patient whole. Transformed by high-
stakes financial incentives, it has become an increasingly irrational
``lottery'' driven by open-ended non-economic damage awards. As
mentioned above, studies show that our tort system, in general, is an
extremely inefficient mechanism for compensating claimants--returning
less than 45 cents on the dollar to claimants and only 20 cents of tort
cost dollars to compensate for actual economic losses.
To ensure that all patients who have been injured through
negligence are fairly compensated, the AMA believes that Congress must
pass fair and reasonable reforms to our medical liability litigation
system that have proven effective. Toward this end, we strongly urge
Congress to pass the ``Help Efficient, Accessible, Low-Cost, Timely
Healthcare (HEALTH) Act,'' a bipartisan bill that would bring balance
to our medical liability litigation system.
The major provisions of the HEALTH Act would benefit patients by:
Awarding injured patients unlimited economic damages
(e.g., past and future medical expenses, loss of past and
future earnings, cost of domestic services, etc.);
Awarding injured patients non-economic damages up to
$250,000 (e.g., pain and suffering, mental anguish, physical
impairment, etc.), with states being given the flexibility to
establish or maintain their own laws on damage awards, whether
higher or lower than those provided for in this bill;
Awarding injured patients punitive damages up to
$250,000 or up to two times economic damages, whichever is
greater;
Establishing a ``fair share'' rule that allocates
damage awards fairly and in proportion to a party's degree of
fault; and
Establishing a sliding-scale for attorneys'
contingent fees, therefore maximizing the recovery for
patients.
These reforms are not part of some untested theory--they work. The
major provisions of the HEALTH Act are based on the successful
California law known as MICRA (Medical Injury Compensation Reform Act
of 1975). MICRA reforms have been proven to stabilize the medical
liability insurance market in California--increasing patient access to
care and saving more than $1 billion per year in liability premiums--
and have reduced the time it takes to settle a claim by 33 percent.
MICRA is also saving California from the current medical liability
insurance crisis brewing in many states that do not have similar
reforms. In fact, according to MLM, as discussed above, the gap between
medical liability insurance rates in California and those in the
largest states that do not limit non-economic awards is substantial and
growing.
MICRA-type reforms are effective, especially at controlling non-
economic damages. Several economic studies substantiate this point. One
study looked at several types of reforms and concluded that capping
non-economic damages reduced premiums for general surgeons by 13% in
the year following enactment, and by 34% over the long term. Similar
results were shown for premiums paid by general practitioners and OB/
GYNs. It was also shown that caps on non-economic damages decrease
claims severity (i.e., amount of the claim) (Zuckerman et al. 1990).
Another study published in the Journal of Health Politics, Policy
and Law concluded that caps on non-economic damages reduced insurer
payouts by 31%. Caps on total damages reduced payouts by 38% (Sloan, et
al. 1989). Another study concluded that states adopting direct reforms
experienced reductions in hospital expenditures of 5% to 9% within
three to five years. If these figures are extrapolated to all medical
spending, a $50 billion reduction in national health spending could be
achieved through such reforms (Kessler and McClellan, Quarterly Journal
of Economics, 1997).
Further, as discussed above, a 2002 Congressional Budget Office
study on H.R. 4600 (107th Congress) asserts caps on non-economic
damages have been extremely effective in reducing the severity of
claims and medical liability premiums. Conversely, a 1996 American
Academy of Actuaries study shows that medical liability costs rose
sharply in Ohio after the Ohio Supreme Court overturned a liability
reform law in the 1990s that set limits on non-economic damages. (Ohio
recently enacted a new liability reform law.)
Furthermore, a Gallup poll released on February 5, 2003, show that
72% of those polled favor a limit on the amount patients can be awarded
for pain and suffering. This Gallup poll is consistent with a 2002
survey conducted by Wirthlin Worldwide showing that three-quarters of
Americans understand the detrimental effect that excess litigation has
on our health care system. The Wirthlin survey shows that the vast
majority of Americans agree we need common sense medical liability
reform. In addition to the 78 percent discussed above who said that
they are concerned about access to care, the survey found that:
71 percent of Americans agree that a main reason
health care costs are rising is because of medical liability
lawsuits.
73 percent support reasonable limits on awards for
``pain and suffering'' in medical liability lawsuits.
More than 76 percent favor a law limiting the
percentage of contingent fees paid by the patient.
CONCLUSION
Physicians and patients across the country realize more and more
every day that the current medical liability situation is unacceptable.
Unless the hemorrhaging costs of the current medical liability system
are addressed at a national level, patients will continue to face an
erosion in access to care because their physicians can no longer find
or afford liability insurance. The reasonable reforms of the HEALTH Act
have brought stability in those states that have enacted similar
reforms.
By enacting meaningful medical liability reforms, Congress has the
opportunity to increase access to medical services, eliminate much of
the need for medical treatment motivated primarily as a precaution
against lawsuits, improve the patient-physician relationship, help
prevent avoidable patient injury, and curb the single most wasteful use
of precious health care dollars--the costs, both financial and
emotional, of health care liability litigation. The modest proposals in
the HEALTH Act answer these issues head on and would strengthen our
health care system.
The AMA appreciates the opportunity to testify on the adverse
effect that our current medical liability litigation system imposes on
patient access to health care and urges Congress to pass H.R. 5, the
HEALTH Act.
APPENDIX B
Medical Liability Crisis Affects Access to Care
Crisis States
the medical liability crisis--a nationwide problem
Florida
Women are facing waiting lists of four months before being
able to get an appointment for a mammogram because at least six
mammography centers in South Florida alone have stopped offering the
procedure as a result of increasing medical liability insurance
premiums. ``This trend is troubling. There are a growing number of
older people and less and less people to provide mammograms,'' said
Jolean McPherson, a Florida spokeswoman for the American Cancer
Society. South Florida Sun Sentinel, Nov. 4, 2002.
Aventura Hospital in South Florida closed its maternity ward
and cited $1,000 in insurance premiums for each delivery as the prime
factor. Aventura is one of six maternity wards to close in recent
months. Now, patients will be forced to drive to other counties and
other facilities. ``There may be waits getting into a labor-room
floor,'' said OB/GYN Aaron Elkin, MD. Miami Herald, Oct. 19, 2002.
``Without a doubt, access to health coverage is being
affected. Some of our emergency rooms are losing their effectiveness,''
said Dr. Greg Zorman, neurosurgery chief at Memorial Regional Hospital
in Hollywood. His unit gets several patients a week from smaller ERs
that have lost neurosurgery coverage. South Florida Sun Sentinel,
February 5, 2003.
Port Charlotte cardiologist Leonardo Victores, MD, left for
Kansas in the face of medical liability premiums that were going to
increase 100 percent. ``He's moving to Kansas because that state has
caps on malpractice awards,'' said colleague Mark Asperilla, MD. Sun
Herald, Jan. 1, 2003.
Despite having no malpractice claims or disciplinary actions
on his record, Lakeland OB/GYN John Kaelber, MD, was forced to close
his practice and leave the state in the wake of insurance premiums that
doubled. Lakeland Ledger, Nov. 21, 2002.
More than 50 Bradenton patients had to postpone elective
surgeries and more than 100 office visits were canceled because two
physicians were unable to obtain liability insurance. The insurer may
leave the state altogether. Bradenton Herald, Jan. 24, 2003.
After recently receiving notice of a premium spike coming in
July 2002, Vladimir Grnja, MD, decided that he would ``go bare'' and
drop all medical liability insurance coverage. Rates for the Hollywood,
FL radiologist were to rise to $112,000 from $35,000 a year (a 220%
increase), mainly because of litigation over mammograms. ``No doctor
wants to go bare,'' said Dennis Agliano, MD, chairman of the Florida
Medical Association's special task force on the Florida medical
liability crisis. But with significant premium hikes in Florida for
specialties like OB/GYN, neurosurgery, thoracic surgery, radiology and
even primary care, ``some doctors have no choice,'' he says. Some
neurosurgeons in South Florida, are paying a $200,000 premium for
coverage of $250,000 per occurrence, making insurance practically
meaningless. The Florida Medical Association reports that more than
1,000 doctors in Florida have no medical liability insurance. Doctors
in West Virginia and Ohio are also reportedly going bare. Modern
Physician, April 1, 2002.
Ob/Gyns in the ``Sunshine State'' face the highest premiums
in the nation, some as high as $208,000. Many surgeons also are facing
premiums in excess of $200,000.
Fourteen of the 16 neurosurgeons in Broward County cannot
afford insurance and are going ``bare.'' Neurosurgeons in Pinellas
County are considering doing the same rather than face increases of 55
percent or greater to more than $100,000.
The Miami Herald reports one radiologist saw his premiums
increase from $32,000 to $112,000 in one year due to ``mushrooming
lawsuits involving mammograms.'' Another radiologist told the St.
Petersburg Times he would no longer read mammograms because of the high
risk of being sued.
Cardiologists and internists also are seeing insurance rates
double or triple this year.
An insurance executive told the South Florida Sun-Sentinel
that insurance companies are paying out $1.30 for every $1.00 they
collect in premiums, a fact that cries out for medical liability
reform.
And, what's worse $100,000 only buys about $1 million in
coverage, a small amount compared to soaring jury verdicts. Tallahassee
Democrat, June 30, 2002.
PHICO, the third largest professional liability insurer in
Florida was forced into liquidation earlier this year. Zurich American
Insurance Co., and Clarendon National also are leaving the Florida
market. Remaining insurers are on record as saying they will draw
sharper lines between which physician specialty they will and will not
insure.
Florida's community hospitals are considering the drastic
step of no longer requiring physicians to carry professional liability
insurance to ensure the hospitals can remain open.
``The squeeze is hitting South Florida extremely hard, and
it's gradually spreading out to the rest of the state,'' Dennis
Agliano, MD, FMA secretary and chair of its tort reform task force.
(The South Florida Business Journal)
Several Florida Supreme Court rulings have weakened tort
reforms in Florida.
``Litigation was and always will be the problem in Florida
until there are caps,'' said Bob White, COO of First Professionals
Insurance Co., Florida's largest carrier.
Medical Specialists of the Palm Beaches, a 50-physician
group, saw its premiums rise from $800,000 to $2.5 million this year.
American Physicians Assurance announced on July 17, 2002 that
it is leaving the state
Farmer's Insurance has announced its intent to leave the
state. Among other insurers, MAG is still writing policies, while
Medical Protective and ProNational are being very selective. FPIC, the
largest medical liability carrier in the state, endorsed by FMA, is
only writing very selectively. Both Clarendon and St. Paul have pulled
out entirely.
According to the FMA's General Counsel, Florida's existing
caps simply do not work and are never used. The caps only apply in
cases where the physician agrees to arbitration and in order for the
case to go to arbitration the physician must admit liability. In
addition, the original intent of this Florida provision was to have the
cap apply to each incident, but it has been interpreted to apply to per
claimant, which obviously also decreases its effectiveness. The lack of
a straight cap is the primary reason for the current crisis in Florida.
Unlike such States as Kansas, Florida, has not seen an increase in
frequency of claims, but there has been an increase for severity in
jury awards.
In a presentation before FMA, the medical liability insurance
carrier, EPIC, presented facts that demonstrate the medical liability
crisis in Florida. During 1975, there were 380 health care lawsuits in
Florida, resulting in $10.8 million in jury awards and costing $1.5
million to defend. In 2000 there were 880 lawsuits alleging
malpractice, resulting in awards of $219 million and costing $36
million to defend.
Dr. Oliver Bayouth says his medical-malpractice premiums are
skyrocketing. The Orlando obstetrician is paying about $100,000 for
insurance this year, up at least 25 percent from two years ago.
Frustrated, Bayouth says he is thinking about moving his practice out
of Florida. Orlando Sentinel, January 20, 2002.
In South Florida, where insurers say litigation is the
heaviest, ob/gyns pay as much as $202,949 a year--the highest rates in
the country, according to Medical Liability Monitor, a Chicago-based
newsletter. Orlando Sentinel, January 20, 2002.
Dr. Alan Appley, an Orlando neurosurgeon, moved his practice
to Lafayette, Louisiana, last year in part to escape Florida's soaring
malpractice rates. Orlando Sentinel, January 20, 2002.
Dr. Joseph Boyer, an Orlando cardiologist, says his rates
rose 64.6 percent, to $99,000, in 2002. Orlando Sentinel, January 20,
2002.
Central Florida Cardiothoracic Surgery in Orlando says it
will pay about $140,000 to insure two surgeons in 2002, compared with
about $54,000 last year. Orlando Sentinel, January 20, 2002.
Dr. Alexander Jungreis, an Orlando neurosurgeon, said his
liability insurance premiums tripled this year. Orlando Sentinel,
January 20, 2002.
Dr. Jorge Perez, an Orlando internist, said his insurer
canceled his policy last year even though he never had a claim filed
against him. His new company is charging him $18,000 per year, compared
with the $11,000 he previously paid, on top of a $25,000 fee to cover
possible lawsuits from prior incidents. Orlando Sentinel, January 20,
2002.
Nationwide, one out of every 12 doctors gets sued each year,
while in Florida it's one out of every six, said Bob White, chief
operating officer of Jacksonville-based First Professionals Insurance
Co., the state's largest provider of medical liability insurance with
about 33 percent of the market. Orlando Sentinel, January 20, 2002.
Georgia
According to a Georgia Board for Physician Workforce study
released in January 2003, 2,800 physicians in Georgia are expected to
stop providing high-risk procedures to limit medical liability.
The study also indicated that 1,750 physicians reported that
have stopped or plan to stop providing ER coverage and 630 physicians
plan to quit practicing or leave the state. In addition, 1 in 5 family
physicians and 1 in 3 Ob-Gyns reported plans to stop providing high-
risk procedures, including delivering babies.
But numbers alone do not tell the whole story; there is a
very human side to this crisis. For instance, although she is only in
her first year of medical school at Medical College of Georgia, the
liability crisis has already caused Thandeka Myeni, 26, to reconsider
her preference for obstetrics, one of the specialties hardest hit by
medical liability increases. ``I definitely think it could be
discouraging,'' she said. The Augusta Chronicle, Nov. 13, 2002.
Evans Memorial, a rural hospital in Claxton, decided to ``go
bare''--have no coverage at all-instead of paying what it considered an
exorbitant medical liability premium. Only one insurer offered a
malpractice policy for the hospital and its nursing home, and the
annual premium for $1 million in coverage would have been $581,000, up
from $216,000 last year. ``We just thought it was outrageous,'' said
Eston Price, Evans Memorial administrator. The Atlanta Journal-
Constitution, Oct. 7, 2002.
The largest hospital in the state's health system has bought
a new policy--with a deductible of $15 million--covering 953-bed Grady
Memorial, a nursing home and clinics. On each paid claim below that
mark, Grady is responsible for every dollar. The $15 million deductible
starts again with each claim. ``Grady faces open-ended liability,''
said Timothy Jefferson, Grady Health System executive vice president
and chief counsel. The Atlanta Journal-Constitution, Oct. 7, 2002.
Knowing that malpractice premiums were rising for everyone in
the industry, Ty Cobb Health System CEO, Chuck Adams earmarked enough
money for a 100 percent increase. The bill arrived by fax this summer,
just 24 hours before a check was due. Not only was the insurance
company increasing his deductible tenfold, but the premium jumped from
$553,000 to $3.15 million--a 469 percent increase. ``We were numb,''
said Adams, who eventually got an extension and another cheaper policy
at $1.65 million. ``There goes our expansions, like a renovation of the
Hart County Emergency Room.'' The Atlanta Journal-Constitution, Aug.
11, 2002.
``Dr. Edmund Wright, a Fitzgerald family practitioner who
performed Caesarian sections, has given up that part of his practice.
His premiums quadrupled to $80,000 in 2002 and would have been $110,000
if he had continued the surgical delivery procedure.'' Wright said, ``I
don't know if I really want to do this anymore.'' The Atlanta Journal-
Constitution, Aug. 11, 2002.
Insurance costs are rising so high and so quickly because of
medical malpractice lawsuits that many doctors are quitting medical
practice, said Michael Greene, who has a family practice in Macon. The
problem is increasing so fast that Georgia will soon face a critical
shortage of physician, Greene said. ``It hasn't hit with a tidal wave
yet, but the waves are beginning to lap at the shore,'' Greene
continued. The Macon Telegraph, Aug. 3, 2002.
David Cook, executive director of the Medical Association of
Georgia, said the malpractice crisis is driving more doctors into early
retirement. ``One-third of doctors 55 and older say they plan to reduce
their hours or get out altogether,'' he said. ``These are physicians at
the peak of their diagnostic powers.'' The Times (Gainesville), July
17, 2002).
40 percent of the State's hospitals have seen have seen
medical liability premium go up 50 percent or more in 2002. A rural
hospital in Bainbridge actually faced increases from $140,000 to
$970,000.
St. Paul was the second largest carrier in Georgia before its
pull-out. The remaining insurers are raising rates for some specialties
by 70 percent or greater. Some ER physicians, Ob-Gyns and radiologists
have not yet found new coverage.
On average, Georgia physicians are facing premium increases
of 30 percent or greater for 2002.
Georgia physicians paid more than $92,000,000 to cover jury
awards for 2000. That amount was the 11th highest in the nation despite
Georgia ranking only 38th in total number of physicians in the United
States.
The median jury award increased from $225,000 in early 1990s
to $480,000 by late 1990s.
The number of paid claims totaling $1 million or more
increased from one in 1990 to 13 in 2000. There was one claim of $2
million or more in 1991, and more than 5 so far in 2002; according to
MAG Mutual, which insures 70% of Georgia physicians. Atlanta Journal &
Constitution Aug. 11, 2002
Mississippi
Although Mississippi enacted some medical liability reforms
late last year, it is still too early to see if this will stem the
exodus of physicians from the State. The reason: the Mississippi cap on
non-economic damages has broad exceptions and the trial bar is looking
for ways to get around its limits. In short, Mississippi remains in
crisis.
The Mississippi State Medical Association still estimates
that the state could lose as many as 10 percent of its 4,000-4,500
physicians.
Obstetricians in Mississippi still worry about what is going
to happen to their patients who face longer trips to the hospital while
already in labor. Women who used to walk or make a short drive for both
prenatal visits and delivery now face a 45-minute drive by car to the
only physician in their area who can still treat OB patients.
Pregnant women who are considered high-risk, such as someone
with diabetes, cannot be treated at the Kosciusko Medical Clinic
because it is too risky for physicians, where seven physicians formerly
practiced obstetrics and gynecology. Only three were predicted to
remain in January 2003. The Clarion-Ledger, Aug. 26, 2002.
Only two neurosurgeons remain in practice in the Gulf Coast-
area of Mississippi, and general surgeons are in short supply because
of the state's medical liability crisis. ``Everybody is reduced to the
same low level of trauma care that we had 20 years ago,'' said Steve
Delahousey, vice president of operations at American Medical Response
ambulance service. Jan. 29, 2003 Biloxi Sun Herald
Neurologist Terry Smith, MD said he had applied with 14
companies, and Medical Assurance was his last hope to find coverage
before his current policy expired on Aug. 4, 2002. His premium went
from $55,000 a year to potentially $150,000 with a $132,000 tail to his
old insurer. ``I'm looking at writing a check for $300,000,'' said
Smith, who does brain surgery at three hospitals in Jackson and
Harrison counties. Associated Press, July 11, 2002.
Four rural hospitals in Ocean Springs faced closure, as their
insurer, Medical Assurance Company of Alabama, was not renewing their
coverage because the insurer was leaving Mississippi.
Greenwood Hospital--the only trauma center in a 55-mile
radius--was unable to keep its Level-II trauma center rating because
area neurosurgeons have left, citing the high cost of liability
insurance. Greenwood also has lost 2 of its 4 Ob-Gyns.
At least 15 insurers, including St. Paul, have left
Mississippi in the previous five years.
Nursing homes in Mississippi have faced insurance increases
as high as 900 percent in the previous two years according to industry
representatives.
Tupelo has lost 3 of its 5 neurosurgeons in the previous two
years because of the State's legal climate. A physician-delegate to the
Mississippi Economic Council predicts nearly 100 physicians will leave
Tupelo in the near future.
In Cleveland, Mississippi, three of the town's six Ob-Gyns
have stopped delivering babies. Yazoo City's 14,550 residents have no
ob-Gyns. According to the Mississippi State Medical Association,
insurance rates for Ob-Gyns have increased from 20--400 percent in the
previous year.
Since 1995, Mississippi has been home to 21 verdicts of $9
million or greater. Before 1995, there were none. In the first quarter
of this year, $31 million was awarded in such cases. The total for the
entirety of last year was $32 million. Daily Mississippean (Oxford,
MS), July 30, 2002.
A Natchez doctor's group is seeking to build a $6 million
medical office building across state lines in Louisiana rather than
face continuing lawsuits and skyrocketing insurance premiums in
Mississippi.
Mississippi has been voted the nation's worst liability
climate by the U.S. Chamber of Commerce, which has warned businesses
away from doing business in the state. Rural areas are particularly
hard hit by the state's liability crisis. Twenty-five of Mississippi's
80 counties have fewer physicians today than they did in 1990. 21 of
those counties have 10 or fewer physicians.
``The legislative process has slammed the proverbial door in
the face of the entire business and medical communities,''
Mississippi's director of the National Federation of Independent
Business told the Associated Press.
Mississippi needs doctors like Kirk Kooyer, MD. He is the
only pediatrician in Sharkey and Issaquena Counties, where the majority
of patients live below the poverty level. Kooyer moved to the
Mississippi Delta to serve those who cannot otherwise get medical
treatment. Because of increasing litigation risks and high insurance
premiums, Kooyer has decided to leave the Delta. His absence will put a
strain on the community hospital because there is no pediatrician to
take his place.
In 2001, Bolivar County in western Mississippi had six
physicians providing obstetrical care; today it has three. Obstetrics
insurance for a doctor in Bolivar County jumped from $28,000 to
$105,000, with a $25,000 deductible. The Wall Street Journal, May 1,
2002
In neighboring Sunflower County, all four physicians who
delivered babies have quit private practice. The Wall Street Journal,
May 1, 2002
In the northern half of the state last year there were nine
practicing neurosurgeons; now there are just three on emergency call.
The Wall Street Journal, May 1, 2002
In 1998, 227 Mississippians filed malpractice suits. Based on
the suits filed during the first quarter of 2002, the Medical
Association Company of Mississippi predicts over 550 medical liability
suits will be filed this year.
Across the State, there is a veritable litigation explosion,
in Jefferson County, for example, there are only about 9,740
residents--but the number of lawsuits filed in 1999 numbered 10,000. A
year later, in 2000, the number of plaintiffs on the docket increased
to 27,000, or nearly three times the number of residents. The
Washington Times, May 11, 2002.
Nevada
In August, Nevada Governor Guinn called a special legislative
session to address medical liability issues. In just four days, Nevada
legislators enacted a meaningful liability reform bill.
Unfortunately, while Nevada passed needed reforms, the crisis
there has not yet been averted due to continued lack of availability
and affordability of medical liability insurance. Insurers in Nevada
have not yet reduced their premiums and physicians are still leaving
the state, particularly in Southern Nevada.
Why? Because the trial bar has threatened to institute legal
challenges to this new law that could thwart and delay its
implementation. Without the full force and effect of reforms right now,
the scenario that has crippled access to medical care in Nevada will
continue.
60 percent of Las Vegas-area Ob-Gyns have said they would
stop delivering babies in 2002 because of the out-of-control legal
system and skyrocketing liability premiums.
as Vegas' only trauma center, which treated more than 11,000
patients in 2001, closed for 10 days in July 2002 because it did not
have enough surgeons to staff the center.
When a trauma center closes, ``some patients are going to die
that wouldn't die . . . the quicker you're at the trauma center, the
better chance you have of survival,'' a Las Vegas surgeon told NPR. The
next closest trauma center is at least 5 hours away.
``There is an unavailability of [medical liability]
insurance,'' said Nevada State Insurance Commissioner Alice Molasky-
Arman, at a March 4, 2002 hearing where insurance officials testified
they would no longer insure any new obstetricians, surgeons and other
high-risk specialists.
A Las Vegas Ob-Gyn was forced to close her practice and leave
30 pregnant patients behind because her liability insurance increased
from $37,000 to $150,000 in one year. She now practices in Los Angeles
and pays only $17,000. Some Nevada women have had to call as many as 50
Ob-Gyns just to find one who is accepting new patients.
Nevada ranks 5th among states with the highest physician
liability premiums (at $94,820 per year), but only 47th out of 50
states in the number of physicians for its population, according to the
American College of Obstetricians and Gynecologists. An ACOG survey
concludes that 6 out of 10 Nevada Ob-Gyns will no longer practice
obstetrics.
``Approximately 100 Las Vegas physicians have already left
Nevada to practice elsewhere, announced they will be closing their
practices, or retire early because they cannot afford doubling,
tripling, or quadrupling rates,'' according to the Nevada State Medical
Association.
In Las Vegas, it is expected that more than 10% of the
physicians will stop practicing or relocate, further adding to the
crisis in the state. Los Angeles Times, March 4, 2002.
Recently, five trauma surgeons and 26 specialty surgeons made
the difficult decision to resign or request leave from the University
of Las Vegas Medical Center's trauma center. Some plan to leave June 30
and others July 31. This was expected to reduce by half the number of
urologists, spinal surgeons, neurosurgeons, orthopedic surgeons, and
cardiothoracic surgeons who could be on call to aid patients with life-
threatening injuries. Las Vegas Review-Journal, June 6, 2002.
Obstetricians and gynecologists remain particularly hard hit,
who, like trauma centers, face premium increases of as much as 500
percent. Las Vegas Review-Journal, March 6, 2002.
Earlier this summer President Bush spoke with Jill Barnes, a
Nevada resident who is more than two months pregnant. Mrs. Barnes and
her husband were recently told by their home physician that he would
not be accepting any new obstetrics patients. Unable to find a Las
Vegas-area obstetrician to treat her, Mrs. Barnes has been forced to go
out of state to find one. ``When she goes into labor, she'll have to
drive across the desert for two hours'' to Arizona, her husband told
the Las Vegas Review-Journal. The Washington Times, July 31, 2002.
Point in fact, Dr. Shelby Wilbourn, a Las Vegas-area
obstetrician-gynecologist has cut staff, stopped taking new patients
and decided to leave the state (he's going to Maine) after his
insurance premium jumped from $33,000 to $80,000 this year. The
Washington Times, July 31, 2002.
New Jersey
A multi-physician practice in Teaneck, NJ, was forced to
layoff employees and reduce the number of deliveries it performed
because of medical liability insurance premium increases of more than
120 percent. ``All of my colleagues are experiencing the same
pressures,'' said George Ajjan, MD. Bergen Record, May 22, 2002.
One out of every four hospitals--nearly 27 percent--has been
forced to increase payments to find physicians to cover Emergency
Departments. Physicians are increasingly reluctant to take on such
assignments because of the greater liability exposure. Hospitals report
that more and more physician specialties are being hit by the crisis.
While a previous New Jersey Hospital Association 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. New
Jersey Hospital Association, Jan. 28, 2003 news release.
``We have as much to lose as they have,'' said Joan Hamilton,
a patient who attended a recent rally in New Jersey in support of her
physician. Bergen Record, Oct. 6, 2002.
Physicians, nursing homes and hospitals are all in jeopardy.
Liability premiums for hospitals increased more than 150% over the past
3 years. A N.J. American Hospital Association survey found that nearly
2/3 of hospitals had one or more instances where physicians were forced
out of medicine because of high premiums.
64.8 percent of all New Jersey hospitals said they have had
physicians stop practicing medicine or plan to stop because of the
state's liability crisis.
New Jersey's largest insurer, the MIIX company, declared May
9, 2002, it is getting out of the medical liability business.
Previously, MIIX insured 7,000 physicians--nearly 40% of the state.
MIIX previously left the medical liability insurance markets in Ohio,
Pennsylvania and Texas, citing those states' out-of-control legal
climates as an unacceptable business risk.
After years of only a few large jury awards, New Jersey had
26 greater than $1 million in 2001, and is averaging one a week in
2002, MIIX President Patricia Costante told the Philadelphia Inquirer
June 4. New Jersey has no limits on non-economic damages in medical
liability cases.
New Jersey physicians are also facing difficulty finding new
insurance because PHICO, which insured 9%, and St. Paul, with 6% of the
market, have pulled out.
After making the difficult decision to no longer deliver
babies, one New Jersey obstetrician will see his liability insurance
rates plummet from $82,000 to $8,000. ``I'm devastated,'' one of
patients told the Atlantic City Press.
New Jersey physicians are predicting as many as 25% of the
state's Ob-Gyns will be unable to afford liability insurance if nothing
is done to stabilize the market. According to the Medical Society of
New Jersey, premiums for Ob-Gyns have risen 50% to 200% over the past
year.
The New Jersey Supreme Court ruled May 29, 2002, that ER
doctors are not immune from lawsuits under the state's good Samaritan
law and may be sued for malpractice.
Some general surgeons are seeing rate increases from $30,000
to $110,000. Zurich, one of the remaining liability insurance carriers
has informed physicians it will raise rates 120 percent.
New York
New York physicians still pay, in most instances, the highest
medical liability premiums in the country. Ob-Gyns' average premium is
$144,973, according to the American College of Obstetricians and
Gynecologists.
New York continues, by far, to lead the country in total
medical liability payouts, with $633 million total in 2000. That is 80%
more than the state with the second highest total, Pennsylvania (at
$352 million), and 300% more than California (at $200 million). Average
medical liability verdicts have skyrocketed recently, going from an
average of $1.7 million in 1994 to $6 million in 1999.
``The number of doctors leaving Erie County last year doubled
from the previous year, a trend that continues in 2002,'' wrote Donald
Copley, MD, an officer of the Erie County Medical Society in Business
First of Buffalo. ``I've watched sadly as valued colleagues have left
Erie County and even the profession. A competent young specialist
recently quit doing high risk diagnostic procedures to become a
business consultant. Several local obstetricians have stopped
delivering babies to reduce their insurance expenses. A half dozen
nationally-known doctors have quietly left Western New York. The number
of doctors leaving Erie County last year doubled from the previous
year, a trend that continues in 2002.'' Buffalo Business First, April
15, 2002.
The Medical Society of New York says the trend of physicians
leaving New York State or retiring early is happening across the state.
``The rising cost of malpractice coverage is becoming one of
the most important factors driving inflation for physicians'
services,'' said a managing director of the Carlyle Group, the
investment group for The New York Times.
Ohio
The Ohio Supreme Court has overturned three tort reform
measures in the past 15 years. Following the state Supreme Court's 1995
overturning of the state's tort reforms, premium increases and jury
verdicts began rising. Family physicians in rural areas are
increasingly no longer performing obstetrical services. Recently, Ohio
again enacted medical liability reforms, but it is too soon to tell if
the courts there will let these reforms take root.
Meanwhile, according to a recent Ohio State Medical
Association survey, 79% of Ohio physicians reported an increase in
their medical lawsuit insurance costs over the last two years, with an
average increase of 41%. And 51% of Ohio physicians are contemplating
early retirement, while 15% are considering or have relocated their
practices, as a result of rising costs.
Physician groups in Cincinnati are seeing increases between
20 and 100%. ``I expect this to get worse,'' Ken Folz, CEO of Patient
First, told the Cincinnati Business Courier.
According to Daniel J. McLaughlin, a vascular surgeon in
Cleveland, some specialists in the region have seen their malpractice
premiums increase 600 percent this year, and typical premiums for
surgeons with just three or four years of experience have doubled or
tripled, to from $50,000 a year to as much as $100,000 or more. Health
Leaders Magazine, Sept. 2002.
In July, Westlake oncologist Dr. Romeo Diaz was faced with an
insurance premium of $80,000--double what he paid last year. He would
have gone out of business had it not been for his patients, who raised
the needed $40,000 to help Diaz stay insured. ''At first I thought he
was playing,'' said Kathy Fritsch, a patient of Diaz for 10 years.
''But when he looked up at me, he was crying. He said his insurance
rose from $40,000 last year to $80,000 this year. It used to be
$20,000.'' Morning Journal, July 31, 2002.
Dr. William Hurd, chairman of the department of obstetrics
and gynecology at the Wright State University School of Medicine, said
the liability insurance issue already is driving young doctors out of
the Dayton area. ``In the last two years, not a single one of our (OB/
GYN) residents has set up a practice in Dayton, or even Ohio,'' Hurd
said. Dayton Daily News, Aug. 28, 2002.
The average jury verdict in Ohio was $11.7 million in 2001.
In 2000, it was $8.6 million.
Physicians in Cleveland are being forced to lay-off staff and
discontinue high-risk procedures, reported the Cleveland Plain Dealer
February 18, 2002.
After not replacing a retiring office manager and moving to a
smaller office, a 55-year-old Cleveland-area surgeon who was only sued
once quit practicing medicine rather than accept an 80% liability
premium insurance increase. Another surgeon, who has never been sued,
no longer performs high-risk procedures and saw his insurance rates
jump from $40,000 to $90,000 in one year.
``If I were advising medical students now, I would tell them
to take a real hard look at going into some of these high-risk
specialties,'' John Bastulli, MD, told the Plain Dealer.
Ohio ranked among the top five states for premium increases
according to the Medical Liability Monitor.
``My premium jumped this year from $14,000 to $35,000. I
can't afford to continue obstetrics at that price. I'll have to give up
delivering babies as of Jan. 1, 2003. I practice in a primarily rural
area, and there isn't any other obstetrical care here, so expectant
women will have to drive long distances to receive prenatal care. Some
75% of my patients don't have the financial resources to do so. Yet,
studies have shown that proper prenatal care fosters healthier newborns
and healthier newborns cost society less money. I find it difficult to
accept that my liability insurance premiums will force me to give up a
side of my practice that has meant a lot to me and to my patients, but
I'll have no recourse.''--A Mt. Gilead family practitioner.
``We've done the math: If we're going to take care of this
debt (our annual insurance payment will increase from $100,000 to more
than $500,000), our service is going to go out the window. To recoup
the loss, we'd have to add 400 patient visits a month. You can't turn
Ob-Gyn into a factory.''--A Columbus obstetrician-gynecologist.
``I just sat down with paper and pencil, and it became not
financially rewarding to stay.''--An Athens obstetrician-gynecologist,
in reference to why he retired from his practice early.
``I practice in southern Ohio in a town of 7,000. We have a
small community hospital with a family birth center. There are three of
us who do obstetrics--two family practitioners and one OB/GYN. In order
to break even, our unit needs 150 deliveries a year. That is 50
deliveries each. If we go over 30 deliveries now, our premiums are in
the $40-60,000 range, which is impossible financially. We are
struggling with limiting our ob to 30 each, but that will cause the OB
unit to go under and close. We all love ob, and are well trained in
providing high-risk OB care, but we're going to be forced to stop. If
this occurs, there will be no OB care between Athens and Lancaster,
Ohio. Tort reform needs to occur yesterday!''--A Logan family
practitioner
``I'm just postponing the inevitable. If the situation
doesn't change, I could be insolvent in five years and have to close my
practice. I'm only 49. Who will care for my patients? Discontinuing
obstetrics is not an option. We need help!''--A Dayton obstetrician
``In the past two years, my medical liability premiums have
increased more than 50%. I have no claims, graduated first in my
medical school class, and was chief resident at OSU. I had been
treating some of my chronic pain patients with acupuncture (medical
research documents decreased pain and decreased inflammation with
acupuncture). Due to the skyrocketing medical liability premiums, I
will have to stop offering this treatment for these patients to try to
decrease my costs of insurance.''--A Columbus physical medicine and
rehabilitation physician.
``My premiums increased significantly, but my reimbursement
level is down because of the Medicare cuts. In order to stay in
practice, I had to float a loan from my pension fund. I am actively
looking to leave this state. I know of one colleague who gave up his
private practice and went to work at the local VA hospital, so they
would cover his liability premium.--A Warren cardiologist.
``This five physician practice recently had to give up
obstetrics due to our rates. We have been committed to delivering full-
range family practice...true womb to tomb medicine. We had to send our
patients to local OBs. We and our patients are devastated by this turn
of events.''--A Medina family practitioner
``After a mad scramble to obtain insurance, it came down to
5:45 p.m. on the day before my insurance expired to obtain insurance. I
was literally 15 minutes from having to close a practice that cares for
over 4,000 people in this town.''--A Coldwater family practitioner
``We have an obstetrician-gynecologist retiring because his
insurance company pulled out of Ohio. To buy a tail and the new policy
would cost this man $140,000, which he couldn't afford to do.''--A
Rossford obstetrician-gynecologist.
``I was told two months ago that I will have no insurance
after the 11th of September. I have had no claims filed against me.''--
An Akron general surgeon
``My carrier has refused to cover me for bariatric
procedures. I have had to turn patients away who need this service.''--
A Massilon general surgeon
Oregon
Rural families in John Day, Hermiston, and Roseburg counties,
Oregon have either lost obstetric care or have seen services
drastically reduced. The Business Journal of Portland, Jan. 10, 2003.
Only by dropping obstetrics were two Hermiston physicians
able to afford their liability insurance premiums. ``It's something you
don't like to tell patients,'' said Doug Flaiz, MD. The Oregonian, Oct.
29, 2002.
``No one with $100,000 in debt from medical school wants to
start a practice in a place where they could find themselves completely
broke and having to pick up and go somewhere else to start all over
again,'' said Rosemari Davis, CEO of Willamette Valley Medical Center,
who has seen three of her center's family practitioners stop delivering
babies. The News Register, Jan. 28, 2003.
In 1999, the Oregon Supreme Court overturned the State's law
capping non-economic damages. Since then, multi-million dollar claims
have become commonplace, according to the Oregon Medical Association.
Since the 1999 decision, Oregon physicians are experiencing
rapidly rising premiums and insurers becoming more reluctant to offer
policies to physicians, such as Ob-Gyns and surgeons, who perform high-
risk procedures.
Recent jury verdicts include: $8 million, $8.5 million, $10
million and $17 million.
Rural patients in Oregon are being particularly hard hit. A
small town clinic, Roseburg Women's Healthcare, which delivered 80% of
the babies for the area, closed its doors in May 2002 because its
liability insurance was canceled after one large lawsuit. ``We consider
this a medical crisis for the community,'' Mercy Medical CEO Vic
Fresolone told the Associated Press.
The Roseburg clinic physicians paid $17,000 per physician per
year in 2001 for medical liability insurance and are now receiving
quotes for $80,000-100,000 per physician.
Oregon's only academic health center--the Oregon Health &
Science Center--reports fewer medical students are applying for its Ob-
Gyn residency positions. Ob-Gyn residents elsewhere reportedly are
increasingly concerned about setting up practice in Oregon due to the
state's broken liability system.
A major liability insurer, Northwest Physicians Mutual
Insurance Company, announced in 2002 it would not write new policies to
obstetricians. Remaining insurers are raising rates by 60% or more.
``We lost $12.5 million last year (2001),'' Jim Dorigan, CEO
of Northwest Physicians Mutual, told the Portland Business Journal June
21st. Dorigan also said the company no longer is renewing policies for
any physician who delivers babies.
A level-III trauma center in Rogue Valley is dropping its
trauma designation to obtain professional liability insurance. Rates
would have been unaffordable if neurosurgery continued to be performed.
Pennsylvania
According to the Pennsylvania Medical Society Alliance, 919
doctors have decided to leave the Keystone State or have scaled back
their practices as premiums spiraled upward over the past three years.
The Baltimore Sun, Feb. 5, 2003.
Dr. Anthony Clay never thought he would have to leave
Philadelphia. He has spent his whole life there--growing up and
attending college, medical school, and residency to become a
cardiologist. He treats families he has known since boyhood. He likes
knowing where his patients live, work, and shop. All nine of his
siblings still live there. But, Dr. Clay is leaving his practice in
Philadelphia this Spring because of surging malpractice insurance
rates. He is starting over in Delaware, where his insurance costs will
drop from roughly $70,000 a year to $8,000. ``It's been terrible,''
said Dr. Clay, 40. ``In this field, you've been with the patient, and
also the family, in some of their most life-defining moments--in the
throes of a heart attack with no blood pressure. Wrongly or rightly,
the patient credits you with being there when they weren't doing so
well. You realize you've created a bond. I take that very seriously.''
Baltimore Sun, February 5, 2003.
Brian Holmes, MD, is one of an estimated 18 percent of
Pennsylvania neurosurgeons to have left the state, retired, or limited
his or her practices because of the medical liability crisis. ``It
saddened me to move, but I had no choice. It was either move or go out
of business.'' Philadelphia Business Journal, Sept. 25, 2002.
After 25 years of practice, OB/GYN Michael Horn, MD, stopped
delivering babies in 2002 because of the fear of getting sued. ``It's
just the potential, the not knowing if someone will seek an outlandish
reward. I don't want to expose myself or my family.'' Burlington County
Times, Oct. 2, 2002.
Medical students are less likely to seek residencies in
Philadelphia, and residents are less likely to stay and practice in the
area because of ``prohibitively high'' medical liability insurance
rates, according to Jefferson Medical College professor Stephen L.
Schwartz, MD. Associated Press, Oct. 4, 2002.
OB/GYN Lawrence Glad, MD, used to deliver about 500 babies a
year--40 percent of all the babies born in Fayette County annually.
After his premiums skyrocketed from $57,000 to $135,000, however, he
closed his practice in the fall of 2002. Pittsburgh Business Times,
Nov. 18, 2002.
Mercy Hospital chief of surgery Charles Bannon, MD, has
watched numerous physicians leave Scranton and Lackawanna County--
creating a shortage of surgeons, fewer medical school applications and
residencies. ``It will take generations to get back the quality of
medicine in Philadelphia.'' Scranton Times, Nov. 20, 2002.
Physicians across the ``Keystone State'' have left, retired,
and stopped performing high-risk procedures. Those who have stayed face
skyrocketing premiums, extremely nasty legal climate. Methodist
Hospital in South Philadelphia closed its maternity ward and prenatal
program last year because of unaffordable medical liability insurance
rates. Mercy Hospital of (South) Philadelphia announced June 19, 2002
it would closed its ob ward August 23rd.
Pennsylvania has the second highest payouts in the country
for medical liability lawsuits. Pennsylvania's total in 2000 was
$352,309,905--nearly 10 percent of the national total despite having
less than five percent of the national population.
Orthopedic surgeons in Pennsylvania face insurance premiums
of nearly $100,000. In California, which has strong tort reforms,
orthopedic surgeons pay an average of $36,310 for yearly liability
insurance coverage.
A recent poll, conducted by Susquehanna Polling Research,
shows that 31 percent of doctors participating in the study had their
existing liability insurance cancelled or non-renewed for 2002.
72% of Pennsylvania doctors have deferred the purchase of new
equipment or hiring of new staff because of out-of-control liability
costs.
270 employees at the Jefferson Health System in Philadelphia
have recently lost their jobs to skyrocketing liability insurance
costs. The Einstein Network laid-off 127 workers and eliminated 52
vacant positions in April 2002, citing rising liability costs as the
prime factor.
Philadelphia County, which has one of the worst liability
climates in the nation, has seen its surgical specialist population
decrease 13.4% from 1995 to 1999. The average jury award in
Philadelphia County is $970,000 while the rest of state's average is
$420,000.
A shortage of radiologists willing to read mammograms has
increased the wait time for screening mammograms at most major
hospitals to two to three months, according to the Pennsylvania patient
advocacy group Concerned Citizens for Care.
The Level-II trauma center at Brandywine Hospital in
Coatesville closed June 10th, because of rising malpractice insurance
rates. Area trauma patients are now being transported more than 30
miles away to hospitals in Philadelphia and Lancaster. The Washington
Times, July 17, 2002.
``As I look around and see my friends retiring early or
leaving Pennsylvania, I wonder who will be next,'' Meadville physician
Tom Arno, MD, wrote in USA Today.
414 medical liability lawsuits were filed in Philadelphia
County in February 2002--five times the average number filed during the
month over the previous decade, reported the Philadelphia Inquirer.
One-quarter of respondents to an informal poll conducted by
the American College of Obstetricians and Gynecologists say they have
stopped or are planning to stop practicing obstetrics.
Statistics compiled for the Pennsylvania Medical Association
by Caso Consulting indicate it costs $96,199 to cover an orthopedic
surgeon in Pennsylvania, compared with $37,783 in Delaware, and $36,291
in New Jersey. Best's Insurance News, January 7, 2002.
Howard A. Richter, a neurosurgeon and president of the
Pennsylvania Medical Society, said a 2001 survey by the medical society
showed that 72% of doctors have either deferred the purchase of new
medical equipment or have not hired needed staff because of ``sudden
and sharp increases'' in insurance rates. Best's Insurance News,
January 21, 2002.
``To lower their risk and insurance premiums, doctors who
normally would take on high-risk medical procedures are opting not to
do so. For example, we've seen obstetrician/gynecologists give up
delivering babies. Virtually every medical liability insurance carrier
increased their rates in recent years. From the beginning of 1997
through September 2001, major liability insurance carriers writing in
Pennsylvania increased their overall rates between 80.7 percent and
147.8 percent.'' York Daily Record, January 20, 2002.
Driving premiums through the roof are excessive sums awarded
in malpractice suits. Medical liability payments for physicians in 2000
totaled $3,908,113,303. York Daily Record, January 20, 2002.
Texas
In the ``Lone Star State'' medical liability insurance
premiums for physicians have skyrocketed as much as 300 percent in some
regions and for some specialties, acccording to the Texas Medical
Association. As a result, there is only one neurosurgeon serving
600,000 people in the McAllen area.
In the past two years, four South Texas patients with head
injuries died before they could be flown out of the area for medical
attention. As reported in a July 10, 2002, article in The Courier, a
community family practice clinic in Conroe (just north of Houston) was
recently forced to turn away half of its normal patient load because
its liability insurance provider would not provide coverage while
``highly lawsuit-risky obstetrics training was conducted.''
Even though the Texas legislature has passed medical
liability reforms, the Texas Supreme Court has regularly overturned
them.
Medical liability premiums were expected to increase by at
least 20 percent and perhaps as much as 75 percent in 2002, according
to the Texas Department of Insurance. San Antonio Express-News, April
8, 2002.
In 1999, 17 companies offered malpractice coverage to doctors
in Texas. Today, the field has dwindled to only four, and Texas is
considered the least profitable state for liability carriers. The
Dallas Morning News, September 1, 2002.
Moreover, premiums this year have climbed at triple-digit
rates for many of Texas' 36,000 physicians. That's on top of double-
digit increases in prior years. Now it's not uncommon for doctors in
high-risk specialties such as trauma surgery, emergency medicine, and
orthopedic surgeries and obstetrics to pay more than $ 100,000 annually
for coverage. This means that some 6,100 Texas physicians are
scrambling to find liability insurance.
The Doctor's Company, a national insurer, told the Dallas
Morning News the company is selective about which types of physicians
it will cover. ``Texas is a very dangerous venue, and we don't really
encourage . . . [growth] from there--not without tort reform,'' said
senior vice president Jack Myer.
In South Texas, one jury awarded $43 million to a woman who
claimed a diabetes drug damaged her liver, while another gave $15
million to three women who received faulty hip implants. The Wall
Street Journal, May 1, 2002.
6 of every 7 medical liability claims in Texas are closed
with no fault found on the doctor's part. Nonetheless, tens of millions
of dollars are spent fighting these cases.
Family physician Marissa Iniga, MD, has been sued 12 times in
the past 13 years. All of the lawsuits were dropped but her insurance
premiums still went up 200 percent. Her situation is mirrored by many
physicians throughout Texas.
Several physicians in Corpus Christi have been sued by
patients they have never seen, but it required thousands of dollars to
have the cases dismissed.
Currently obstetrician/gynecologists in Cameron, El Paso and
Hidalgo Counties are paying one carrier a premium of $102,584 annually
compared to their counterparts in Dallas County who pay $59,221.
Another carrier charges thoracic surgeons in Cameron, El Paso and
Hidalgo Counties $79,218 annually compared to $57,395 for those
practicing in Dallas County.
70% of Texas physicians who practice near the U.S.-Mexico
border have had medical liability claims filed against them, and 60%
have been sued, according to the Texas Medical Association. 55% of
physicians there are inclined to leave the border and practice
elsewhere or retire during the next 12 months; 71% to 76% of border
doctors say they cannot recruit new doctors to the border due to
lawsuit crisis, and 1 out of 3 border physicians have had insurance
carriers decide to stop writing coverage.
The high cost of malpractice insurance for local doctors is
driving them away from Laredo. The three main issues for this exodus
are the high price of malpractice insurance for border area physicians,
tort reform and the fact that Medicaid and Medicare do not reimburse
border area physicians proportionate to what they do farther north,
director of Community education/Physician Relations Mindy Casso said.
Laredo [Texas] Morning Times.
The second-highest premiums for obstetricians/gynecologists
are paid in Houston, Dallas and Galveston, Texas, where the bills
amounts to some $160,746 a year. Orlando Sentinel, January 20, 2002.
``Dr. William F. Tucker, an orthopedic surgeon, figured he'd
try to curb the cost of his malpractice insurance premium by abandoning
spinal surgeries and reducing his emergency room calls. Both decisions
cut down on his income but provided him with a greater sense of
security as malpractice lawsuits against doctors become more common in
Texas and the nation. Then came the shocking news that his premium
would rise by 63 percent to $38,000.'' The Dallas Morning News, January
20, 2002.
The problem is particularly acute in Texas, where 51.7
percent of all physicians in 2000 had claims filed against them,
according to the Texas Medical Examiners Board. Although no concrete
numbers are available as a comparison, several industry experts say the
frequency is twice the national average. The Dallas Morning News,
January 20, 2002.
In Texas, about 85 percent of cases are closed without
payment to plaintiff, yet they still cost money to resolve, said Texas
Medical Liability Trust president W. Thomas Cotton. The Dallas Morning
News, January 20, 2002.
Insurance carriers in Texas paid more than $381 million in
claims in 2000, according to the Texas Department of Insurance--costs
passed on to policyholders. That's an 87 percent increase since 1995.
Nationally, the median malpractice award more than doubled from 1994 to
1999, to $800,000. The Dallas Morning News, January 20, 2002.
Texans filed 4,501 claims in 2000, up 51 percent from 1990,
according to the Texas Medical Examiners Board. More troublesome is the
rise in expenses involved in resolving a case. Each claim cost an
average of $68,681 to litigate in 2000, compared with $46,079 in 1995.
The figure does not include the amount of settlement or award. The
Dallas Morning News, January 20, 2002.
Meanwhile, physicians in the Rio Grande Valley are in crisis,
said Texas Medical Liability Trust president W. Thomas Cotton. An Ob-
Gyn in North Texas pays $47,500 annually for $500,000 in coverage,
while his Rio Grande Valley counterparts pay $82,300. Neurosurgeons pay
even higher premiums. The Dallas Morning News, January 20, 2002.
Seven in 10 Rio Grande Valley doctors have had medical
liability claims filed against them. A February 2001 survey by the
Texas Medical Association found that 1 in 3 Valley doctors say their
insurance providers have stopped writing liability insurance. The
Dallas Morning News, January 20, 2002.
In Rio Grande Valley, half of the physicians admitted to
being inclined to leave the area or to retire, according to a survey
conducted in February 2001 by the Texas Medical Association. Many
doctors in the Valley said they profile patients and refuse to treat
some, because they fear the patients are prone to sue. They said they
deny care for people who pay with cash, because the patients are most
likely poor and may look at a lawsuit like a lottery opportunity. Some
physicians are even hesitant to respond to a ``code blue,'' which
indicates a medical crisis, in a hospital. Dr. Carlos Cardinez, a
gastroenterologist in McAllen, said he doesn't want to respond anymore
because of the legal uncertainty. The Dallas Morning News, January 20,
2002.
Increases in medical practice costs have outstripped revenue
increases over the last 10 years, according to the Medical Group
Management Association's 2000 cost survey. Operating costs for
multispecialty groups went up an average of 35 percent over the past 10
years, while revenue increased 21 percent over that same period. The
Dallas Morning News, January 20, 2002.
Washington
``There is a growing crisis in medical malpractice in
Washington state and nationally,'' state insurance commissioner Mike
Kriedler said in an April 2002 news release.
`Patients in many communities are finding that their
physicians have either started limiting their services or have closed
their doors completely due to rising malpractice premiums,'' said Dr.
Maureen Callaghan, president of the Washington State Medical
Association. PR Newswire, Feb. 3, 2003.
``I went through my mourning and my grieving, and now I have
to find a place for my [380] patients,'' said a South Send internist
who has not been sued but can no longer afford liability insurance
coverage.
The cost of medical malpractice insurance has soared so high
that Mount Vernon obstetrician Robert Pringle, MD, has stopped
delivering babies, according to the Puget Sound Business Journal.
So have his two colleagues at the North Cascade Women's
Clinic, and so have others. ``Of the nine obstetricians in our
community, six have stopped delivering babies or left the area,''
Pringle said.
When he began his practice 20 years ago, Pringle paid a
premium of $1,000 for medical malpractice insurance, which covers
physicians against claims of injury resulting from negligent medical
care. ``Now it's in the neighborhood of $60,000,'' he said. ``From an
economic standpoint, you would have to be a lunatic to continue private
practice of obstetrics.'' Puget Sound Business Journal.
The severe premium hikes besetting many doctors ``could not
come at a worse time,'' said Dr. Sam Cullison, president of the
Washington State Medical Association. Cullison said the high cost of
malpractice insurance has combined with low reimbursement rates from
Medicaid, Medicare and private insurers to clamp many doctors in a
financial squeeze. As a result more physicians are retiring early, or
leaving the State, he said. Also, it's increasingly difficult to
recruit doctors from other states.'' Puget Sound Business Journal.
``Everyone is in the same situation in terms of increasing
premiums, increasing overhead and decreasing reimbursement,'' said
Olympia neurologist Maureen Callaghan, MD. ``The final end point,'' she
added, ``is that people are not to be able to get in to see a doctor.''
Puget Sound Business Journal.
During the past five years, medical liability premiums paid
by orthopedic surgeons increased 30 percent, to nearly $40,000, and
premiums paid by family physicians who neither deliver babies nor do
surgery rose 29 percent, to almost $10,000. Washington State Medical
Association.
In Washington, from 1999 to 2000, the median jury award rose
43 percent. Last year, seven medical malpractice verdicts or
settlements exceeded $1 million. They totaled $44.7 million, and ranged
from $1.2 million to $16.2 million.
Washington's Supreme Court overturned the state's tort reform
law in 1989. As a result skyrocketing medical liability insurance
premiums are forcing physicians to limit patient loads and services.
Some physicians are choosing to move out of State and retire early as
well.
In the past five years, the average medical liability premium
for a family physician has increased a staggering 74 percent, according
to the Washington State Medical Association. For obstetricians, the
increase has been more alarming--79 percent since 1997.
The departure of liability insurers St. Paul and Washington
Casualty Company from Washington have left thousands of physicians
scrambling to find coverage.
The Steck Medical Group, which serves 60,000 patients in
mostly rural Washington, was forced to close its doors for a few days
this year because it could not find liability insurance coverage. It
re-opened only after the state insurance commissioner intervened, but
the new policy was at a 160% increase.
Clinics in Lewis County and Waterville also have been forced
to close temporarily according to The Olympian.
Recent large jury awards in Washington State include $13
million and $16 million verdicts.
West Virginia
The ``Mountaineer State'' was one of the first states to
experience wide-spread medical liability insurance problems.
According to the West Virginia State Medical Association,
some 100 doctors have already retired early or moved out of the state
within the previous two years.
That has helped drive 1 out of every 20 doctors out of West
Virginia or into early retirement in the past two years. CNN, Jan. 2,
2003.
General surgeon Gregory Saracco, MD, only 49 years old, was
forced to borrow money twice in 2002 to pay $73,000 for his liability
insurance. His premiums for 2003 are expected to rise to $100,000. He
is considering leaving West Virginia and while he has taken time away
from his practice this year to decide what his options are, he said
``my job is to help people--I couldn't drive past an accident on the
road and not stop. I don't know any doctor that could.'' Associated
Press, Jan. 2, 2003.
Although orthopedic surgeon George Zakaib, MD, was raised and
went to school in Charleston, WV, he and his family left because of the
state's medical liability crisis. Dr. Zakaib's premiums had increased
to $80,000 plus $94,000 in ``tail'' coverage. Charleston Daily Mail,
July 27, 2002.
Fourth-year medical school student Jennifer Knight isn't sure
she'll stay in West Virginia. The Charleston Area Medical Center says
fewer medical students are applying to its residency programs, and
fewer students are applying to Marshall University's medical school.
``I think the problem is, we have too many frivolous lawsuits,'' said
Ms. Knight. Sunday Gazette-Mail, Nov. 24, 2002.
The state legislature has been trying for more than a year to
come up with a solution that will prevent more physicians from
curtailing services or leaving the state. A state medical association
poll found that 40% of the State's doctors are considering similar
action to stop practicing or leave the State.
``It's a 'code blue' emergency'' threatening the state's
trauma centers and other health care services in the state, WVSMA
President Ahmed D. Faheen, MD, told The New York Times.
Wheeling, West Virginia, has no remaining neurosurgeons,
forcing closure of its only trauma center. Trauma patients must be
flown by helicopter for care elsewhere.
Across the State, the pattern is the same, trauma centers are
closing or headed in that direction, and there is incredible difficulty
in recruiting high-risk specialty residents.
Earlier this year, in the State Capital, the Charleston Area
Medical Center (CAMC) was able to keep its level-I trauma center open
only after agreeing to help surgeons pay their liability premiums. The
one part-time and three full-time surgeons are paying $800,000 in
liability premiums this year, according to a report in the April 25,
2002 Charleston Gazette.
Now, after the loss of several orthopedic surgeons, CAMC can
no longer offer 24-hour coverage seven days a week. That means patients
with serious multiple injuries, usually car wreck victims, must be
transported to other cities. Precious time that could mean the
difference between life and death will be lost. The Charleston Daily
Mail, August 29, 2002.
The Medical Liability Monitor reported that West Virginia
surgeons paid premiums of $36,094 to $56,371 a year in 2001--the
seventh highest in the nation. This year these premiums have continued
climbing dramatically. The Charleston Daily Mail, August 29, 2002.
As the The New York Times has reported, the Bluefield
Regional Center--a rural hospital--has lost 12 physicians in the
previous two years but only has been able to find two physicians to
replace them.
A survey of state Ob-Gyn residents by the American College of
Obstetricians and Gynecologists found more than half plan to leave when
they finish training.
Without action, the future is not bright. The Charleston
hospital faces an 11%-41% drop in residency applications this year.
``We are concerned that students will not think the residency
opportunities in West Virginia favorable in light of the recent
problems with malpractice insurance,'' Dean James Griffith, MD, told
the Charleston Gazette.
__________
APPENDIX C
Medical Liability Crisis Affects Access to Care
Selected States Showing Problem Signs
the medical liability crisis--a nationwide problem
Alabama
The severe liability crisis in the neighboring States of
Mississippi, Georgia and Florida has not left Alabama untouched.
Atmore Community Hospital has had to close its maternity ward
because of soaring medical liability premiums, forcing pregnant mothers
to travel 15 miles to the nearest hospital with an obstetrics
department.
Arizona
Arizona has not been immune to the medical liability crisis.
Serious access problems are already developing.
The Copper Queen Community Hospital, was forced to stop
delivering babies in January after a group of family physicians said
they could no longer afford medical liability insurance.
Pregnant mothers in this part of Arizona must now travel over
35 miles to the nearest hospital--the only hospital left in that County
that is still delivering babies.
Connecticut
The crisis may be spreading to Connecticut as evidenced by
the recent decisions of 28 OB/GYNs to stop delivering babies.
Some OB/GYNs in Connecticut are now paying between $120,000-
160,000 per year in insurance premiums, according to state medical
society executive Tim Norbeck.
Connecticut already is on a ``watch'' list issued by the
American College of Obstetricians and Gynecologists. Hartford Courant,
Jan. 3, 2003.
The average payment made by one of Connecticut's major
insurers to resolve a claim rose from $271,000 in 1995 to $536,000 in
2001.
OB/GYN Jose Pacheco, MD's, insurer stopped offering medical
liability insurance, and he had to seek another carrier. However,
because of the high cost of new insurance--estimated around $60,000--
combined with ``tail'' coverage of $80,000, Dr. Pacheco retired after a
27-year career. Hartford Courant, Nov. 17, 2002.
Kentucky
Health care access problems will worsen in the ``Blue Grass
State,'' as medical liability premiums continue moving rapidly upward.
Based on a survey by the Kentucky Medical Association,
physicians in Kentucky have faced a recent average increase in medical
liability premiums of 78 percent.
Kentucky emergency department physicians have reported an
average increase of 204 percent, with orthopedists facing a 122 percent
increase; general surgeons facing an 87-percent average increase, and
Ob-Gyns seeing an average increase of 64 percent.
Deep in Appalachia, the only provider of obstetrical services
in Barbourville soon may have to close its practice due to the
liability crisis. Previously, this physician group had liability
insurance coverage through St. Paul Company, the nations second largest
malpractice insurer that pulled out of the market last year.
This same 9-physician practice also has an office in Corbin,
where two resident physicians from the University of Kentucky College
of Medicine train in conjunction with Baptist Regional Medical Center.
If the physicians are forced to close the practice, the residents will
have to be placed out of State for the remainder of their training.
leaving a tremendous access problem for the Kentucky women they treat.
Massachusetts
In the Bay State, eight of 55 OB/GYNs in Springfield,
Massachusetts, a state which has broad exceptions to the state limits
on non-economic damages, will no longer be offering Obstetrics care to
their patients because of sharply escalating liability insurance costs.
``I got into obstetrics because it's a very happy specialty. But there
comes a point where you can't make ends meet,'' said James Wong, MD,
one of two OB/GYNs at a western Massachusetts clinic giving up
delivering babies. Boston Globe, Jan. 8, 2003.
``The real issue is runaway juries,'' according to Barry
Manual, MD, who serves as insurer ProMutual's chairman, and said the
number of $1 million-plus claims paid out doubled between 1990 and
2001. Boston Globe, Jan. 8, 2003.
Missouri
The State of Missouri is starting the slide into a full-blown
medical liability crisis.
Missouri Ob-Gyns are routinely seeing premium increases of
200-300 percent and even upwards of 1,000 percent in some cases,
forcing some physicians to close part or all of their practice.
A recent survey completed by the Missouri State Medical
Association found that 31.4 percent of the responding physicians were
considering leaving their practice, and 28.6 percent said they would
consider limiting their practice because of rising liability insurance
premiums.
This same survey showed an average premium increase for
medical liability insurance of 61.2 percent for 2002, on top of a 22.4
percent average increase last year.
Neurosurgeons in Kansas City are facing an increase in
premiums of $12,000 to $42,000 this year, with further increases
expected next year.
The 2002 premiums for Ob-Gyns have increased by as much as
$50,000 from 2001. Again, further increases are expected next year.
According to a separate survey by the Metropolitan Medical
Society of Greater Kansas City, 40% of practices are looking for new
coverage because their insurer has stopped writing medical liability
coverage.
Predictably, an access crisis to needed health care is
developing. The St. Joseph Health Center in Kansas City recently lost
another trauma doctor. It is now down to three. The situation is even
worse because a local nearby trauma center has been virtually shut
down, meaning St.Joseph's must treat double the number of patients, and
it is having trouble finding other surgeons willing to cover trauma.