Fighting Lawsuit Abuse and Exposing Frivolous Lawsuits
Issue 28 - July 15, 2003
In this Edition:
Legal Reform: The Medical Liability Crisis Affects Us All
Tort D'Jour: Stop Me Before I Shoot Up Again
Testimony: Problems with Class Actions
While such strikes are commonplace in countries with nationalized health systems, they have been rare in the U.S.
But unlike their foreign counterparts,
U.S. doctors aren't striking over pay or working conditions.
Rather, physicians in West Virginia, New Jersey and Florida engaged
in work stoppages to pressure their lawmakers to curb runaway
lawsuits that are making medical malpractice insurance unaffordable.
In addition to these five states, the American Medical Association has identified seven others currently facing a medical liability crisis: Georgia, Mississippi, New York, Ohio, Oregon, Texas, and Washington.
The medical liability crisis is turning into a health care access crisis. Without doctors to provide treatment, even those who can pay for care can't get it. Indeed, in Mississippi it is now almost impossible to find a doctor to deliver a baby anywhere outside of the largest cities.
The crisis is being driven by both the increasing number of lawsuits and the growing size of awards for non-economic damages - that is, additional awards on top of those for tangible losses such as the plaintiff's cost of care and lost income. Yet, the system offers no assurance that those who actually are injured will be compensated.
The good news is that some states don't have this problem. The most notable is California, which 25 years ago passed a successful tort reform law that, among other things, caps non-economic damages at $250,000 but doesn't limit awards for tangible losses. In California, malpractice premiums are comparatively affordable, doctors are staying in the state, and patients continue to have access to quality care.
Comparisons with California show the difference that tort reform makes. In Florida, malpractice insurance for an obstetrician costs between $143,000 and $203,000 a year. Given that the average obstetrician delivers about 100 babies a year, that adds about $1,400 to $2,000 to the cost of delivering each newborn. In contrast, malpractice insurance premiums for OB's in California are $23,000 to $72,000 a year, or about $200 to $700 per newborn.
But these aren't the only costs of the metastasizing medical litigation cancer. There are even bigger economic and social costs.
To guard against lawsuits doctors increasingly practice "defensive medicine" - that is, prescribing tests, procedures and drugs that they don't believe are medically necessary but that enable them to say in court that they did everything possible for the patient. One study estimates that this adds $20-$40 billion a year just to the cost of federal health care programs such as Medicare and Medicaid. Furthermore, unnecessary treatments pose additional risks to patients and contribute to problems like the growing antibiotic resistance of infectious bacteria, which affects everyone.
Another effect is that doctors who are retired or not actively practicing are prevented from providing charity care as part-time volunteers in clinics, as many used to do, because neither they nor the sponsoring organizations can afford the necessary malpractice insurance.
Finally, instead of encouraging doctors and other health professionals to identify and correct problems in the health care system, the threat of lawsuits instead encourages them to ignore or hide problems - making medicine less, not more, safe for everyone.
In short, the medical liability crisis
no longer affects just doctors - it affects us all.
Edmund F. Haislmaier is a member of the board of directors of the National Center for Public Policy Research and CEO of Strategic Policy Management, a Washington, D.C. health policy consulting firm. He also is a visiting research fellow at the Center for Health Policy Studies at the Heritage Foundation.
EDITOR'S NOTE: On July 9, the U.S. Senate killed
by filibuster legislation to help alleviate the difficulties
described in the above article. A 49-48 Senate majority had approved
the bill, a version of which had previously been approved by
the House. The legislation proposed limiting pain and suffering
damages to $250,000 and punitive damages to the greater of $250,000
or twice the amount of economic damages. Economic damages were
not limited. Limits also were set on lawyers' fees in contingency
fee cases. Trial lawyers had vigorously opposed the measure.
Amanda C. Hagan, 29, is suing seven defendants because she took illegal drugs.
Hagan injected herself with heroin and cocaine while involuntarily committed at the Norristown State Hospital. After nurse gave Hagan an anti-depressant, she suffered a drug overdose, was taken to an emergency room, and recovered.
Hagan is suing Montgomery County (PA), the private psychiatric agency in that operates Norristown State Hospital, the Montgomery County Mental Health-Mental Retardation Emergency Service, the 18-year-old hospital visitor who gave her the drugs and two unidentified people who allegedly sold the drugs. The lawsuit says the defendants should have prevented the overdose and the hospital should have warned visitors against taking illegal drugs to visitors.
"Class actions have long been a valuable aspect of the legal system, permitting the efficient resolution of suits involving multiple parties allowing for plaintiffs with limited means to pursue small but significant claims. Over the last decade, however, aspects of class action practice have gone terribly wrong. Increasingly, state courts are certifying class actions in cases where class treatment cannot reasonably be justified; class actions are being settled on terms that do not provide the class members with meaningful relief; and the potential for massive but unwarranted liability is forcing defendants to settle class action strike suits. These problems are largely attributable to two developments -- the unprecedented migration of national class actions to the state courts, and the proliferation of class claims initiated by entrepreneurial lawyers on behalf of class members who have not suffered any substantial injury."
- testimony by James M. Wootton, U.S. Chamber Institute for Legal Reform, before the American Bar Association's Task Force on Class Action, available at http://www.litigationfairness.org/pdf/Wootton_testimony_040802.pdf
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