Texas Malpractice Liability Reforms: 4 Years Later

NY Times: October 5, 2007

More Doctors in Texas After Malpractice Caps

By RALPH BLUMENTHAL

HOUSTON, Oct. 4 — In Texas, it can be a long wait for a doctor: up to six months.

That is not for an appointment. That is the time it can take the Texas Medical Board to process applications to practice.

Four years after Texas voters approved a constitutional amendment limiting awards in medical malpractice lawsuits, doctors are responding as supporters predicted, arriving from all parts of the country to swell the ranks of specialists at Texas hospitals and bring professional health care to some long-underserved rural areas.

The influx, raising the state’s abysmally low ranking in physicians per capita, has flooded the medical board’s offices in Austin with applications for licenses, close to 2,500 at last count.

“It was hard to believe at first; we thought it was a spike,” said Dr. Donald W. Patrick, executive director of the medical board and a neurosurgeon and lawyer. But Dr. Patrick said the trend — licenses up 18 percent since 2003, when the damage caps were enacted — has held, with an even sharper jump of 30 percent in the last fiscal year, compared with the year before.

“Doctors are coming to Texas because they sense a friendlier malpractice climate,” he said.

Some experts say the picture may be more complicated and less positive. They question how big a role the cap on malpractice awards has played, arguing that awards in malpractice lawsuits showed little increase in the 12 years before the law changed.

And some critics, including liability lawyers, question whether the changes have left patients more vulnerable. With doctors facing reduced malpractice exposure, they say, many have cut back on their insurance, making it harder for plaintiffs to collect damages. Moreover, the critics say that some rural areas have fewer doctors than before.

The measure changing Texas’ malpractice landscape, Proposition 12, was narrowly approved in a constitutional referendum on Sept. 12, 2003. It barred the courts from interfering in limits set by the Legislature on medical malpractice recoveries.

For pain and suffering, so-called noneconomic damage, patients can sue a doctor and, in unusual cases, up to two health care institutions for no more than $250,000 each, under limits adopted by the Legislature. Plaintiffs can still recover economic losses, like the cost of continuing medical care or lost income, but the amount they can win was capped at $1.6 million in death cases.

All but 15 states have adopted some limits on medical damage awards, according to the National Conference of State Legislatures. But the restrictions in Texas go further than in many states, where the limits are often twice as high as they are here.

“Other states have passed tort reform, but Texas implemented big changes all at once,” said Lisa Robin, a vice president for government relations at the Federation of State Medical Boards, a national umbrella group based in Dallas.

Some experts say that the lack of a state income tax, combined with what William M. Sage, a law professor at the University of Texas in Austin, called a “relatively rapid transition in its tort reputation as a plaintiff-friendly state,” has contributed to the state’s appeal to doctors.

Dr. Timothy George, 47, a pediatric neurosurgeon, credits the measure in part with attracting him and his sought-after specialty last year to Austin from North Carolina. “Texas made it easier to practice and easier to take care of complex patients,” he said.

The increase in doctors — double the rate of the population increase — has raised the state’s ranking in physicians per capita to 42nd in 2005 from 48th in 2001, according to the American Medical Association. It is most likely considerably higher now, according to the medical association, which takes two years to compile the standings. Still, the latest figures show Texas with 194 patient-care physicians per 100,000 population, far below the District of Columbia, which led the nation with 659.

The Texas Medical Board reports licensing 10,878 new physicians since 2003, up from 8,391 in the prior four years. It issued a record 980 medical licenses at its last meeting in August, raising the number of doctors in Texas to 44,752, with a backlog of nearly 2,500 applications.

Of those awaiting processing, the largest number, after Texas, come from New York (145), followed by California (118) and Florida (100).

In some medical specialties, the gains have been especially striking, said Jon Opelt, executive director of the Texas Alliance for Patient Access, a medical advocacy group: 186 obstetricians, 156 orthopedic surgeons and 26 neurosurgeons.

Adding to the state’s allure for doctors, Mr. Opelt said, was an average 21.3 percent drop in malpractice insurance premiums, not counting rebates for renewal.

To help state officials monitor the influx of doctors, the medical board recently got money to hire six more employees, said Dr. Patrick, the director since 2001. It now has 17 lawyers, compared with no more than four when he arrived, he said.

Since 2003, investigations of doctors have gone up 40 percent, patient complaints have gone up 25 percent, and disciplinary actions about 8 percent, said Jill Wiggins, a board spokeswoman. But the figures may reflect greater regulatory diligence rather than more misconduct, Ms. Wiggins said.

Of the 10,878 physicians licensed since 2003, she said, 14 have been the subject of disciplinary actions, on charges as diverse as addiction problems and record-keeping infractions, with none accused of harming patients.

But there are those who are skeptical about the caps on malpractice.

“We’ve lost our system of legal accountability, said N. Alex Winslow, executive director of Texas Watch, a consumer advocacy group. “Just having more doctors doesn’t make patients safer. It remains to be seen who is coming to our state.”

Demian McElhinny, 33, a former hospice pharmacy technician in El Paso, recently settled claims against a neurological surgeon for spinal surgery that left him disabled and his family impoverished; he said he emerged with “pennies on the dollar.” His wife, Kelly, found work as a school bus driver, he said, while “I’m at home being a housewife to my two boys.”

Mr. McElhinny’s surgeon, Dr. Paul Henry Cho, later admitted to the medical board that he was addicted to a narcotic cough syrup and had written fraudulent prescriptions. Dr. Cho’s license to prescribe drugs was suspended, although it was soon restored, and he moved from El Paso to a hospital in Fort Worth. He did not return a call to his office, and his lawyer declined to comment.

Paula Sweeney, a leading Dallas liability lawyer and a past president of the Texas Trial Lawyers Association, said, “A lot of legislators are aware they went too far in ’03.”

Texas Watch, in a report last February, questioned the decline in malpractice insurance rates, saying they must be seen in light of increases of as much as 147 percent before the 2003 referendum. And Bernard S. Black, a law professor at the University of Texas, has published studies showing little increase in Texas insurance awards from 1990 to 2002, casting doubt, he said, on the “malpractice insurance crisis.”

Professor Black also said that data was too scant to attribute the rise in the number of doctors to the damage caps. “I don’t doubt there’s an effect,” he said, “but I think it’s a small one.”

Texas Watch also contends that many poor rural areas of Texas remain underserved, and rural West Texas has actually lost several physicians since 2003. But Dr. James Baumgartner, a pediatric neurosurgeon at Memorial Hermann Hospital in Houston, is among many doctors who believe the new malpractice caps have helped.

Dr. Baumgartner said it was now far easier to recruit doctors to a state where close to 30 percent of children lack health insurance and Medicaid reimbursements are low.

Dr. Keith Hill, a recently discharged Army doctor with a specialty in foot and ankle reconstruction, said the change in state law was the reason he moved from Georgia to open a practice in Beaumont, a poor city in East Texas long seen as plaintiff-friendly.

Had it not happened, said Dr. Hill, 40, “I can say I would not have considered Texas.”

Continuing Benefits of Comprehensive Medical Liability Reform In Texas

Influx of doctors overwhelms Texas board

Monday Jul 9, 2007: 5:18 PM ET

An influx of doctors lured to Texas by new limits on malpractice lawsuits has overwhelmed the state board that screens candidates for medical licenses, creating a backlog that forces many applicants to wait months before they can start seeing patients.

Officials said many of the relocating physicians are filling shortages in areas such as Beaumont, where trauma patients previously had to be flown other cities because there weren't enough surgeons to treat them. But Austin psychiatrist Dr. James E. Kreisle Jr. said he fears the Texas Medical Board's backlog could prompt some physicians to rethink their decision to move.

Kreisle and his colleagues have been waiting since the fall for two psychiatrists from South Carolina and Georgia to get licensed in Texas so they can join their practice. In the meantime, patients are being forced to wait three weeks for appointments.

The board received 4,000 applications for medical licenses in 2006, up from 2,992 the previous year. Spokeswoman Jill Wiggins said the board expects to approve 2,750 new licenses this year, 235 more than last year. There is a backlog of more than 2,398 applications.

Lawmakers approved $1.2 million to hire six more employees to process applications more quickly. The board has also hired temporary workers and is paying staffers overtime, but they still can't keep up, Wiggins said. "The pipeline is just clogged," she said.

Approving an application for a medical license involves verifying the doctor's medical education, doing a criminal background check and other steps. In 2003, it took 45 days to approve the most complex applications and 20 days to approve the simplest, Wiggins said.

Data provided by the board shows it is now taking the agency more than six months to process the most complicated applications, including those that come from out-of-state doctors or veteran doctors who have long histories to be checked. The simplest applications are taking about 41 days to approve. Wiggins estimated it will take "a little over a year" before the agency's new staffers can bring the applications backlog under control. "You're turning a battleship around," she said.

Several doctors who moved to Texas from other states said they were drawn by lower malpractice insurance rates.

The average malpractice insurance premiums in Texas have fallen by 21.3 percent since 2003, when lawmakers and voters implemented a $250,000 cap on non-economic damages such as pain and suffering in malpractice cases, according to Jon Opelt, who leads a group of doctors, hospitals and other health care providers that fought for the changes.

The changes are "a big factor why Texas has become a popular state to practice in," said Dr. Punit Chadha, an oncologist who moved from Chicago to Austin last year. He said his malpractice insurance premium is one-fourth of what it would have been in Chicago.

Dr. Kevin H. Brown, an obstetrician who opened a Round Rock practice with his wife in May, said they paid $130,000 a year for their malpractice insurance in Georgia. Now, they pay a combined annual premium of $82,000 a year.

"It was a $24,000 raise for each of us before we even got started," Brown said.

___

Information from: Austin American-Statesman, http://www.statesman.com

David Hendricks: Insurance companies, doctors flock to Texas

Web Posted: 06/01/2007 09:01 PM CDT

San Antonio Express-News

When Texas voters in 2003 approved a state proposition capping lawsuit awards for medical malpractice cases, only four insurance companies even offered malpractice policies to Texas doctors.

Now, 30 insurance companies crowd the market, and premiums have fallen like so many San Antonio Spurs playoff opponents. The lower cost of being a doctor in Texas has helped trigger a stampede of applications for physician licenses, with the waiting line now up to 12 months.

Rates have fallen an average of 21.3 percent, and up to 41 percent at one insurance company, says former state Rep. Joe Nixon, a Houston trial lawyer who helped sponsor passage of Proposition 12.

An internal medicine doctor in Houston paid $18,507 for malpractice insurance in 2003 but only $13,272 in 2007, or $10,403 with a 20 percent renewal dividend, according to figures given to Nixon by the state's largest insurer, Texas Medical Liability Trust. An obstetrician paid $56,564 in 2003 but only $41,575 in 2007, or $32,585 at the renewal rate. A neurosurgeon paid $103,558 in 2003 but only $76,117 in 2007, or the renewal rate of $59,659.

Before Proposition 12, the state did not impose a cap on the amount of noneconomic damages in a malpractice lawsuit against doctors. Proposition 12 established a cap of $250,000. Malpractice lawsuits have fallen 50 percent, Nixon said, causing some malpractice lawyers to shift to other fields, such as commercial litigation.

Insurance companies are flocking to Texas because now they can put a numeric value on the risk of doing business in Texas, something that was not possible when the sky was the limit for juries. Assessing risks helps assure profits for insurance companies. As more insurance companies entered Texas, rates have dropped even further because of competition.

Probably no other profession could benefit so much from legislated lawsuit protection. As Nixon explained it, doctors have little control over their incomes. Their fees are determined by government programs such as Medicare and Medicaid and by insurance companies. On the expense side of doctors' balance sheets, however, are rising incomes for staff, higher rents for offices and, before 2003, outlandish malpractice insurance premiums. An unknown number of Texas doctors closed their practices or retired earlier than they would have liked.

Tennessee is considering a lawsuit cap similar to the one in Texas. In the meantime, 350 Tennessee doctors have applied to move their practices to Texas, 50 of those with license applications still pending, Nixon said.

Meanwhile, about 2,250 license applications await processing at the Texas Medical Board in Austin. The wait could be as long as a year for some of the more experienced doctors because it takes longer to review their records.

The fear is that some doctors will give up on Texas and go elsewhere instead of waiting. A $1.22 million emergency funding request was approved during the last days of Texas legislative session for the Texas Medical Board, which licenses physicians. That is on top of the $18.3 million regular biennial appropriation, said Jane McFarland, the board's chief of staff.

The board plans to add nine new employees to its 139-member staff, seven of which will help chop away at the backlog of license applications.

Six months to a year is a long time to make a doctor wait to start a practice in a new location. Texas needs as many doctors as possible because it ranks in the bottom half of states in doctors per capita. Even the new wave of applicants won't change that.

Alluding to popular restaurants with lines of patrons out the front door, Nixon said: "Some of these doctors will find a new place to eat."

---

dhendricks@express-news.net

Posted on Fri, Jun. 15, 2007

Perry signs Medicaid reform bill

By BILL HANNA
Star-Telegram staff writer

FORT WORTH -- Gov. Rick Perry signed the state's Medicaid reform bill Thursday, which is designed to bring increased healthcare coverage to as many as 200,000 of the state's working poor.

That is a small fraction of Texans without health insurance (4%), but Perry, who was speaking at John Peter Smith Hospital, touted the plan as an important first step.

"It will help encourage personal responsibility," Perry said. "It will promote consumer choice and will provide hundreds of millions of dollars to insure working Texans who are just one terrible illness away from an absolute catastrophe in their personal lives."

State Sen. Jane Nelson, R-Lewisville, the sponsor of Senate Bill 10, warned that Medicaid costs are spiraling out of control in Texas. Ten years ago, 14 percent of the state budget was spent on Medicaid. It is now close to 26 percent and was expected to reach 40 percent by 2017.

Medicaid is the federal program administered by states that pays for indigent healthcare. The costs are shared by state and federal governments. Texas is seeking a federal waiver that could bring in $1 billion to create a trust fund that would help the working poor obtain health insurance. Nearly 25 percent of Texans do not have health insurance.

Mike Leavitt, U.S. Health and Human Services secretary, traveled with Perry to endorse the legislation, leaving officials confident that the waiver will be approved.

"My hat is off to Texas today and Governor Perry. I do get it, and I get that it was an important day for Texas and an important day for America," Leavitt said.

Medicaid By the Numbers:

$17.9 billion: Amount Medicaid costs Texas annually.

5 million: Number of uninsured Texans.

200,000: Uninsured Texans who could get insurance under this plan.

Highlights of legislation

Creates a fund to cover some healthcare costs and provides money for premiums.

Provides assistance for private insurance enrollment and employer-sponsored plans.

Creates benefit packages for children with special healthcare needs.

Promotes consumer choice through health savings accounts.

Rewards healthy lifestyles with healthcare incentives.

SOURCE: Gov. Rick Perry's office and state Sen. Jane Nelson' office

Tort reform still splits doctors, lawyers

Houston Business Journal - September 29, 2006: by Mary Ann Azevedo

Houston orthopedic surgeon Dr. Terry Clyburn says passage of Proposition 12 gave him incentive to continue performing high-risk procedures. "Several years ago, I was very seriously considering stopping the higher-risk part of my practice and simply doing straightforward surgical procedures because I was very disheartened," says Clyburn, who specializes in joint replacement and adult reconstructive surgery at The University of Texas Health Science Center.

Houston attorney John Eddie Williams, who actively campaigned against the passage of Proposition 12, says consumers are getting the short end of the tort reform stick.
"We passed Proposition 12 in order to help Texas families," says Williams. "We were promised there would be savings all around, and when I look at the health care costs that I pay for my employees, they've gone up. Doctors were promised savings. I don't think they've seen much savings. Consumers haven't seen any savings."

Three years after passage of medical tort reform by the Texas Legislature, proponents and opponents continue to make many of the same arguments for and against the landmark bill.

Houston physicians generally give a thumbs up to the impact of tort reform. Some statistics support their case.

Placing a cap on jury awards for judgments in malpractice suits has attracted new outside carriers as well as doctors from other states.

The Texas Medical Board is anticipating a record 4,500 applications for new physician licenses this year. The number is 40 percent greater than in 2005, the board's busiest year on record.

Dr. Donald Patrick, executive director of the state board, calls medical tort reform the "only one viable hypothesis" to explain the jump in applications.
Plaintiff attorneys take a more negative view. They note Texas continues to carry the country's highest number of uninsured people. They also claim Proposition 12 has made it more difficult for malpractice victims with legitimate cases to find attorneys.

Jim M. Perdue Jr. says the vast majority of his practice was medical malpractice cases before tort reform. "Now they're still the majority, but don't represent nearly as much of our business." says Perdue who practices with his father, Jim Perdue Sr., at The Perdue Law Firm. He says those most affected by Proposition 12 are the elderly, children and stay-at-home moms who can't recover lost wages. Says Perdue: "They have had their rights truly cut because of the way these caps operate. Unfortunately, this law has affected those who are the most seriously injured and their ability to recover."

Changing litigation climate:
The centerpiece of Proposition 12 was a $250,000 cap on judgments for non-economic damages such as pain and suffering in health care liability cases, (combined with malpractice insurance market reforms and increasing the disciplinary authority of the Texas Board of Medical Review and Licensure.)

Dr. Steven Gartzman, an emergency room physician at Christus St. Catherine Hospital in Katy, believes tort reform literally kept specialty medical practices alive. "It's saved medicine in Texas," says Gartzman. "We'd be in deep, deep trouble without tort reform. People would literally die without it. There would not be enough specialists to treat the life-threatening emergencies we have every day."

Orthopedic surgeon Clyburn says Proposition 12 made a big difference in the way he approaches his work. Clyburn says he spent a lot of time counseling high-risk patients who slammed him with lawsuits in several cases. He has not been named in any litigation since Proposition 12 passed, and he feels more confident in prescribing treatments. "I'm also comfortable that the patients who really need this level of care are able to get it," Clyburn says.

Tort reform has allowed Dr. James Key to rein in the expense of liability insurance. "It's been nothing but a boon," says the chief of ophthalmology at St. Luke's Episcopal Hospital. "Proposition 12 enabled a small group practice at St. Luke's to get costs under control and seriously think about adding another new partner to the practice."
Before tort reform a new doctor in his practice paid around $20,000 in the first year for liability insurance, a figure Key acknowledges is "little" compared to more high-risk specialties. First-year coverage for a starting physician now costs about $8,000 a year. Key, who has testified as an expert witness in a number of lawsuits, doesn't think that Proposition 12 has eroded a patient's ability to recover from the cost of illness and the economic damages of any malpractice. "It's cut down on huge awards for pain and suffering," says Key. "But nobody is out any true disability because of Proposition 12."

Questioning caps:
Attorney Williams doesn't agree. He contends malpractice patients have a more difficult time finding lawyers to take their cases. The cap at times leaves little compensation for attorneys, he says, and insurance companies have less incentive to settle. Williams also questions who has reaped the rewards. "I don't think in any way has it done anything for families in Texas. All it's done is actually help insurance companies," he says. Adds Williams: "It sounds to me like we were sold a bill of goods and got bamboozled a little bit."

Plaintiff attorney Perdue contests claims that Proposition 12 has cut down on frivolous lawsuits. Judgment caps do nothing to fight frivolous cases, Perdue charges, but only make some economically unfeasible. He says he turns down a case "that would have been a viable and legitimate death case under the old law" every other week. "If a case is going to require two or three experts to prosecute and it's going to cost over $100,000 to prosecute, it will be tough for victims or their families to find a lawyer," Perdue explains.

But he is not giving up. "I'd like to say they haven't run me out of the business yet. And I'm not going to let them," Perdue says.

Increasing "Fair But Firm" Disciplinary Decisions Improves Patient Safety

Doctors face Texas Medical Board's watchful eye:

http://www.bizjournals.com/houston/stories/2006/07/10/focus1.html

More doctors are being called before the Texas Medical Board, and there has been a dramatic jump in disciplinary decisions. The number of investigations increased from 1,775 in 2003 to 2,131 in 2005. The number of disciplinary decisions rose from 187 in 2002 to 304 in 2005, according to online statistics provided by the board.
Houston Business Journal - July 12, 2006

North Carolina medical board may toughen up:

http://www.newsobserver.com/722/story/459749.html

The N.C. Medical Board, criticized for failing to aggressively police the state's 21,000 physicians, will have more firepower under a bill adopted this week by the General Assembly. Raleigh News & Observer - July 12, 2006

Tennessee Joins 20 States in Medical Liability Crisis

Guam Showing Problem Signs

For immediate release: February 14, 2006

CHICAGO — The American Medical Association (AMA) today announced that Tennessee is the 21st state designated by the AMA as "in crisis" due to a deteriorating medical liability climate that is jeopardizing patients' access to care.

"Our broken medical liability system is choking out access to care and threatening every American who lives in a crisis state or travels through one," said AMA President J. Edward Hill, MD. "Tennessee lawmakers need to act now to stem this tide before more patients are put at risk. Proven reforms have worked in other states and can make a difference in Tennessee."

"Tennessee is facing a 'perfect storm' - a collision of destructive influences that is greater than the sum of its parts," said Phyllis Miller, MD, president of the Tennessee Medical Association (TMA). "The high cost of our broken legal system is driving up the cost of patient care, medical liability insurance, and the cost of doing business in Tennessee. The constant threat of a lawsuit is forcing physicians to rethink their career choices. Without relief, Tennessee physicians often have no choice but to curtail their practices, move out-of-state or discontinue practicing medicine altogether. Patients will be left without access to the medical care they need."

From 1995 to 2005, Tennessee physicians have seen liability premium increases as high as 127 to 212 percent. While premiums costs have increased, reimbursements from TennCare - the state's health care program - have dwindled, and now average only 25 percent of billed charges.

"No business can continue to operate if expenses consistently outpace revenue. Physician practices are no different. Doctors have to pay their bills and pay their employees, just like everyone else, or they cannot keep their doors open," Dr. Hill said.

The current crisis makes it difficult to attract physicians to Tennessee, and patient access to physicians in high-risk specialties is suffering. A TMA survey found that 70 percent of Tennessee's physicians believe the state has a shortage of high-risk specialists. AMA data from 2004 shows that of Tennessee's 95 counties:

81 counties have no residing neurosurgeon in patient care.
49 counties have no residing orthopedic surgeon in patient care.
47 counties have no residing emergency physician in patient care.
42 counties have no residing obstetrician-gynecologist in patient care.

Tennessee today joins Arkansas, Connecticut, Florida, Georgia, Illinois, Kentucky, Massachusetts, Mississippi, Missouri, New Jersey, Nevada, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Washington, West Virginia and Wyoming as states in crisis.

"We need to fix a jackpot justice system that is bad for our patients, bad for health care, and bad for local economies," Dr. Hill said. "It's time for Tennessee's state and federal representatives to stand up and do what is necessary to ensure that when patients need care, physicians are there to provide it."

Medical liability reforms that include a reasonable limit on non-economic damages have been proven to protect patients and preserve access to medical care. A medical liability crisis in Texas was halted after the state enacted sweeping reforms in 2003, and voters passed a constitutional amendment to head off potential court challenges. Since then, access to care has been increasing, claims are down, physician recruitment and retention are up, and new insurers are entering the increasingly competitive Texas medical liability market, creating more choices for physicians. As a consequence, last year the AMA removed Texas from the list of crisis states.

"Lawmakers and voters acted to bring Texas back from a meltdown of their health system," said Dr. Hill. "We urge Tennessee's state and federal lawmakers to consider the example of other states and look to proven remedies when considering medical liability reform."

The AMA also announced today that it is adding Guam to the medical liability crisis map as a territory "showing problem signs." Access to care is already a problem in Guam with a limited number of physicians practicing some specialties, no physicians available in others, and the closest alternative approximately eight hours away in Hawaii. Guam has only one civilian hospital serving a largely rural population of 160,000. A number of physicians have left the territory, and local doctors cite the medical liability environment as the key challenge in attracting and retaining physicians to meet existing needs.

Further details on the situations in Tennessee and Texas can found on the AMA Web site. Please visit the Web site and click on "Tennessee" and "Texas."

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For more information, please contact:
Robert J. Mills AMA Media RelationsOffice:
(312) 464-5970Mobile: (312) 543-7268

A Smoking Gun?: A Dramatic Mismatch Between Malpractice Insurance Premiums Collected and Net Claims Paid

According to the Center for Justice and Democracy, a consumer advocacy group, between 2000 and 2004:

• while net malpractice claims paid did not increase, the increase in malpractice insurer premiums collected by 15 large insurers nationwide was 21 times the the increase in paid claims, and, over the same period,
• the incurred-loss ratio--the ratio of claims to premiums collected--for the 15 insurers decreased almost 25% to 51.4%.

http://www.californiahealthonline.org/index.cfm?Action=dspItem&ItemID=112563&classCD=CL351

Medical Malpractice Paid Claims in 2003: United States vs Rhode Island

According to the Kaiser Family Foundation (http://www.statehealthfacts.org), in 2003:

• In the United States, the total number of paid medical malpractice claims was 15,287 and the number of paid claims per 1,000 physicians was 18.8 (15,287/814,909).
• In Rhode Island, the total number of paid medical malpractice claims was 71 and the number of paid claims per 1,000 physicians was 18.3 (71/3,879).

Rhode Island Replaces Texas on Crisis List

AMA eVoice: May 26, 2005:

FROM THE PRESIDENT

Two states are seeing changes in their medical liability climates.

First, the good news. We've created a new category for states where effective reforms are halting the crisis. Texas is the first state to enter this category.

In September 2003, voters passed a constitutional amendment that allowed the state legislature to pass good reforms that can't be challenged in the courts.

Since then, Texas has seen all five of its largest insurers cut physicians' medical liability insurance rates. Physicians - especially high-risk specialists like neurosurgeons and obstetricians - are back in practice. And that means access to care for our patients is headed in the right direction.

Unfortunately, the opposite is true in Rhode Island - which joins 19 other crisis states. Soaring jury verdicts are driving medical liability insurance premiums beyond the reach of Rhode Island physicians.

Fully 49 percent of Rhode Island physicians say these costs have caused them to stop or consider stopping certain services. And 48 percent say they're thinking about leaving the state or giving up their practice.

Rhode Island and the other crisis states need to follow Texas' lead - and enact proven reforms. And once we've got good reforms in place - whether it's state by state or through federal legislation - it's not game over. It's game begun. From there, we need to look at stronger expert witness standards, stronger arbitration requirements and even medical court systems. Nothing should be off the table.

The AMA remains committed to medical liability reform. Together we can work with each state to make it a reality for patients across America. Because together we are stronger.

John Nelson, MD

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Another negative trend for all physicians trying to cope with uncontrolled escalations in medical liability premiums is significant income reductions produced by the continuing reductions in payment for their services from private and public third party payers, especially the federal Medicare program.

How will Medicare cuts affect your state?

Projected reductions in Medicare physician payment rates of 26 percent over a six-year period starting next year will affect all 50 states.

Visit http://enews.ama-assn.org/UM/T.asp?A40.442.2339.34.271796 and select your state in the drop-down menu to see how your state will be affected.

Visit http://enews.ama-assn.org/UM/T.asp?A40.442.2339.35.271796 to contact your members of Congress to support legislation to stop the cuts.

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A PERSONAL INJURY COMPENSATION SYSTEM BROKEN BEYOND REPAIR?:

Over the last 50 years, tort costs in the U.S. have grown more than 100-fold from less than $2 billion in 1950 to $246 billion in 2003. This translates to a cost of $845 per person in 2003, compared to $12 in 1950. At this growth rate, tort costs could approach $1,000 per person by 2006. Gross Domestic Product, by contrast, has grown by a factor of 37; population by a factor of less than two.

The cost of the entire U.S. tort system increased 5.4 percent to $246 billion in 2003. About 9 percent of this total (over $21 billion) represented total medical liability costs.

Paradoxically, the majority of dollars moving through the U.S. tort system never reach the plaintiffs who suffered damages. Overall, just 22 cents of the tort dollar compensates victims for economic loss; 24 percent pays non-economic losses. More than half of every tort dollar—at least 54 percent—never reaches the victims.

A recent essay in the op-ed section of the May 30, 2005 Providence Journal reviewed the national statistics that help explain the intransigence of the problem.

According to Edward A. Kent, MD, President of the Rhode Island Society of Anestheseologists, entitled "Trial Lawyers Waste Taxes, Eject Doctors", 80 percent of cases alleging malpractice are dropped after they have burdened the tort system. Of the remaining 20 percent, 80 percent are settled with costs to the plaintiff's insurance company and 20 percent proceed to trial by jury. The physician is found not guilty by the jury 80 percent of the time.

It would be useful if all of the stakeholders in the medical tort system, especially members of the tax-paying public, were aware of the implications of these national statistics.

For example, based on these figures, for every 100,000 alleged malpractice claims filed by trial attorneys, 80,000 are dropped after they have burdened the tort system with significant expenses and adjudication delays, without any payments to the plaintiff or their lawyer.

Of the 20,000 not dropped, 16,000 are ultimately settled by the insurance company and defendant's lawyer with costs in the form of out-of-court settlements paid to the plaintiff and his or her lawyer (generally, the trial lawyer receives 20 percent of the total payment minus his or her itemized expenses).

The remaining 4,000 proceed to trial by jury. Of these cases (4 percent of every 100,000 claims), 3,200 receive an innocent verdict and 800 (0.8 percent) are found guilty resulting in awards to both the plaintiff and his or her lawyer (generally, the trial lawyer receives 30 percent of the jury award minus his or her itemized expenses).

Based on these statistics, the end result is that only about 17 percent (16,800) out of every 100,000 claims are being settled with cash awards paid to both the plaintiff and their lawyer.

The key number, however, is that a super majority of 83% of all alleged medical malpractice claims in the United States are settled without remuneration or financial costs to the party alleging a physician negligence-related personal injury.

Any unbiased, non-partisan view of these facts would suggest that, in its current configuration, the U.S. healthcare's personal injury adjudication system is analogous to a rapidly expanding $21 billion national lottery with two main features:

• a 17 percent chance of winning, and
• no need for either of the two parties seeking remuneration to buy a ticket.

May 31, 2005:

Reducing the Complicated to the Simple

AMA eVoice: May 19, 2005

Medical liability crisis declared in Rhode Island:

Meanwhile, in Texas, a unique turnaround is under way, thanks to sweeping reforms that took effect in 2003.

To learn more visit:
http://enews.ama-assn.org/UM/T.asp?A40.442.2323.34.271796 .

THE TIPPING POINT IN U.S. MEDICAL LIABILITY REFORM

"We need to fix a broken medical liability system. Doctors should be focused on fighting illnesses, not fighting lawsuits." (President George W. Bush, January, 2005)

"Medical liability policy should seek three goals:

• restraining overall costs,
• compensating the victims of medical mistakes, and
• providing incentives for doctors and hospitals to reduce avoidable medical errors." (William M. Sage, MD, a law professor at Columbia University)

February 27, 2005 NY Times ("Bush’s Next Target: Malpractice Lawyers"

By Steve Lohr
http://www.nytimes.com/2005/02/27/business/yourmoney/27mal.html )

AMA to L.A. Times: MICRA works

January 15, 2005
Los Angeles Times Letter to the Editor
Los Angeles, CA

Contrary to the Jan. 10 editorial (in the L.A. Times), experience and research demonstrate that California's medical liability law, known as MICRA, is fair — to patients and physicians. Under the law, patients, not lawyers, receive a greater share of a jury award than they would in states without reforms.

Patients in California have full access to the courtroom and can recover millions in economic damages, plus an additional quarter-million dollars for pain and suffering.If patients are harmed by negligence, they should be fully and fairly compensated. In California, they are.

California's law also ensures that physicians' insurance premiums rise at moderate levels. A Los Angeles OB-GYN pays about $63,000 per year, but in such non-MICRA states as Pennsylvania and Illinois, an OB-GYN pays $147,000 to $161,000. In crisis states, high-risk specialists are restricting services, retiring early or relocating to other states.

The AMA strongly supports California's law as a model for federal reform for one simple reason: It works. It protects patients' access to care and injects some common sense into our nation's legal system. All Americans should be so lucky as to live under California-style reforms.

John C. Nelson MD, MPH President, American Medical Association


Visit http://enews.ama-assn.org/UM/T.asp?A40.442.2008.29.271796 to read the letter.

"No Doctors, No Malpractice"

AMERICAN ASSOCIATION OF PHYSICIANS & SURGEONS
1601 N. Tucson Blvd. Suite 9Tucson, AZ 85716-3450Phone: (800) 635-1196Hotline: (800) 419-4777
http://www.aapsonline.org

NO DOCTORS, NO MALPRACTICE
(AAPS NEWSLETTER: Volume 61, No. 2 February 2005)

The trial lawyers and their political servants say they have the answer to spiraling premiums for professional liability premiums: get rid of malpractice, by "disciplining" the doctors who "commit" it so that they can't practice.

Even President Bush, while campaigning for federal caps on awards, commissioned a study by the University of Iowa and the left-leaning Urban Institute to "help state boards of medical examiners in disciplining doctors" (NY Times 1/5/05).

"If you had more aggressive policing of incompetent physicians and more aggressive disciplining of doctors who engage in substandard practice, that could decrease the type of negligence that leads to malpractice suits," stated Josephine Gittler, a law professor at Iowa.

"If you take the worst performers out of practice, that will have an impact.... Most doctors have few or no claims filed against them," said Randall Bovbjerg of the Urban Institute. The same article notes that, according to the Federation of State Medical Boards, the 5,230 disciplinary actions against doctors in 2003 was up 7% from 2002 and 41% from 1993.

Meanwhile, New York hospitals have experienced an average increase of 27% per year in their liability premiums over each of the past 5 years, for a 150% increase since 1999. Since 2000, the number of insurers has decreased from six to four (NY Times 1/6/05). In 2004, some Pennsylvania surgeons were hit with a 300% increase, so that premiums equalled their take-home pay for an entire year (AP). In Maryland, about 70% of the obstetricians have been sued at least once, with the average settlement exceeding $1 million (Wash Times 12/12/04).

So, more disciplinary actions have been accompanied by higher liability costs not supportive of the plaintiff's bar theory. Has disciplinary activity been misdirected?

In New York, the percentage of actions for "poor quality care" dropped from 40% in 1999 to 28% in 2002 (AP) despite doubling physicians' licensing fees to fund more investigations.

In Texas, failure to furnish the board with requested information within 24 hours has led to harsher penalties than removing the wrong part of the lung (Star-Telegram 11/16/04). "It is extraordinarily difficult to discipline a doctor based on incompetence. Everybody knows that some doctors are in- competent, but identifying them is a very difficult task," said Timothy Jost, law professor at Washington and Lee Univ. and former member of the Ohio medical board (NY Times 1/5/05).

Massachusetts plans to have the tort system serve as a screen. Three or more payouts, either in settlements or judgments, will trigger a clinical review by the board (ibid.).

Maryland trial lawyers, while pretending to enact tort reform, forced through a bill that would foist part of tort costs onto taxpayers, while limiting further the due process rights of physicians facing board action. H.B. 2, passed in special session, changes the standard of proof for disciplinary action from "clear and convincing" to "a preponderance of the evidence." Governor Ehrlich vetoed the bill, as promised, but the legislature acted quickly to override the veto.

Tackling the "difficult task" of identifying "substandard" care are government agencies and insurers undeterred by inability to define terms such as "quality." While moving ahead with implementing a 2004 Minnesota law (M.S. 62J.43) requiring the state health department to begin standardizing the practice of medicine, Cabinet members were reluctant to give Twila Brase, President of Citizens' Council on Health Care, the definition she sought. Quality is "a little bit in the eye of the beholder," said Health Commissioner Diane Mandernach (CCHC Insider Report, winter 2004).

In the name of quality, UnitedHealth Group will monitor how well physicians follow guidelines for ordering imaging studies, claiming that "30 to 40% are ordered inappropriately" (Business J of the Greater Triad Area 12/27/04).

Horizon Blue Cross Blue Shield of New Jersey will be using claims data to compare doctors on clinical quality. It will send the first performance reports to 600 gastroenterologists and OB/Gyn specialists (Wall St J 12/15/04).

While such efforts may be styled as "pay for performance," with bonuses for compliance, "outliers" may find themselves targeted for licensure actions or alleged fraud or violations of antikickback laws, as insurance companies often have relationships with prosecutors (MSSNY 11/04) or boards. Malpractice suits frequently are filed against physicians who experience an audit, indictment, or board action.

Physicians are dropping out, one by one. In Illinois, 23 of 102 counties have no hospital, and an additional 26 have no hospital obstetric services (Wall St J 1/4/05). It's not just the money. After enduring the "intellectual rape" of a malpractice action, neurologist Michael S. Smith, M.D., decided to take an enormous pay cut and become a statistician (Sombrero 12/04).

Medical students had such an emotional reaction to the prospect of a doctor being sued that David Rothman stopped teaching Columbia students about it (NY Times 12/14/04). But bright prospective physicians have already figured out the high risk of investing in a medical education. "Kids are getting in today who would have been laughed out of the admissions office a few years ago," writes Herb Rubin, M.D., of UCLA. If medicine by protocol is really better than care by a skilled professional, who needs physicians? A technician following a "guideline" isn't really a physician.

Are trial lawyers really so short-sighted as to endanger their livelihood by destroying medicine as a relatively affluent profession? Or are they helping to guarantee far worse outcomes, with ever rising damages to be paid by insurers backed up by governmental taxing authority?

High Double Digit Malpractice Premium Increases in Rhode Island for 2005:

The first three paragraphs in the story in the September 20, 2004 issue of the Providence Business News by Staff Writer Marion Davis entitled "Malpractice insurers eye steep hikes" accurately highlight the worsening malpractice insurance cost crisis in the state.

http://www.pbn.com

"In the wake of a 42.8-percent rate hike this year, the state’s largest medical malpractice insurer wants to raise premiums by another 19 percent, adding an average of $7,000 to the cost of each of its 1,500-plus policies.

If approved by the state Department of Business Regulation, the proposed hike would make NORCAL Mutual Insurance Co.’s premiums 2.4 times higher than what they were, overall, in 2000. The actual cost of each policy varies by medical specialty and other factors, and some doctors have seen bigger hikes in that time period.

NORCAL’s rates have a particularly big impact on Rhode Island because since its entry into the market in 1994, it has seized a sizable market share: 64 percent of direct premiums written in 2003. But the California-based insurer is not alone in its skyrocketing premiums."

http://www.pbn.com/stories/printdetails.php?id=108669

The responses of the approximately 3,835 Rhode Island physicians* to this further uncontrollable increase in medical practice overhead are consistent with physician responses in more than half of the other states in the nation also in crisis:

"A recent survey by the Rhode Island Medical Society found that 12.3 percent were closing their practices, 26.5 percent were retiring early; 16.9 percent planned on leaving the state; 24.4 percent planned to reduce their patient load, and 32 percent were reducing the services they offered."

*detailed statistics on the medical markets in all 50 states are available at the Kaiser Family Foundation site at: http://www.statehealthfacts.org .

In this type of deteriorating business environment, many, if not most physicians are inclined to agree with the perspective of Rich Lowry, author of Legacy: Paying the Price for the Clinton Years, as expressed in his recent essay entitled "Suing the OB-GYNs: Our legal system doesn’t exactly welcome life into the world":

"Many of the lawsuits are over children with neurological damage such as cerebral palsy. The theory often is that a doctor's negligence during childbirth kept the baby from getting enough oxygen. Edwards successfully sold this theory to juries. It is problematic at best.

A recent ACOG study concluded that less than 10 percent of cases of neurological impairment were caused by events during labor, and even in most of those cases the problems were not preventable. Deliveries by Caesarian section have increased from 6 percent in 1970 to 26 percent today — to make it harder for a trial lawyer to argue that a C-section would have prevented a baby's disability. But a study last year found that cases of cerebral palsy had remained steady despite the increase in C-sections.

Of course, there are instances of real medical malpractice, which should be compensated. But it cannot be the case, as the pattern of lawsuits now suggests, that nearly every obstetrician in America is incompetent and negligent. Krauss points out that medical insurance rates for OB-GYNs don't differ according to experience or prior suits the way, say, auto insurance rates do. That's because there is no predicting who will be hit by the pervasive and random suits.

The lawyers who game this system are simply scoundrels. Not just in how they coax millions out of the American health-care system, but in how they play on the understandable emotions of heartbroken and scared parents, telling them an alluring lie: that no tragedy in this life is unpreventable, that nothing goes wrong without it being someone's fault, a fault that can be precisely calibrated and paid out in a settlement or jury award.

America should make itself safe again for doctors who deliver babies."

THE RECENT EXPERIENCE WITH MEANINGFUL REFORMS IN TEXAS:

Recent developments in Texas with its 47,201 physicians, 411 hospitals and population of over 21 million (versus 3,835 physicians, 11 hospitals and 1 million citizens in Rhode Island in 2002) do offer some hope that the right kind of state-based reforms can help both all non-negligent physicians and all truly injured patients.

As described in detail in the previous eleven postings on this site, the multiple structural defects in the medical liability insurance market in Rhode Island and other states demand a multifaceted and coordinated legislative reform effort.

Just such a "three-pronged" reform effort was conceived, organized and implemented in the Texas State legislature in September, 2003.

Its dramatic one-year impact is summarized in the following fact sheet from the Home page of the current Republican Governor of Texas, Rick Perry who says that "medical liability reforms are healing healthcare in Texas":

http://www.governor.state.tx.us/divisions/press/tortreform/factsheet.htm

Medical Liability Reform Fact Sheet:

"In the one year since we passed major medical liability reforms, patients are experiencing better access to healthcare, communities are recruiting new physicians, insurance costs are down significantly for many hospitals and some doctors, and lawsuits filed against healthcare providers have declined dramatically." - Governor Rick Perry

Medical Liability Reforms are improving patient access to the healthcare delivery system all across Texas. Statewide and local data show a stunning reverse in recent trends with hospitals and communities experiencing much greater success in recruiting physicians, lower insurance costs for hospitals leading to an expansion of indigent and charity care in some instances, a tremendous decrease in lawsuits against healthcare providers, and lower rates for some doctors compared to skyrocketing increases in previous years.

Here are the facts:

Lower Insurance Costs:
Texas Hospitals are reporting a 17 percent decrease in professional liability premiums for 2004-2005 (Texas Hospital Association Survey with responses from 172 acute-care hospitals, 8/23/04.) In 2003 premiums rose more than 50 percent.

Ten new carriers are seeking entry into the Texas market (Texas Department of Insurance report 8/5/04), and the largest carrier, the Texas Medical Liability Trust, has reduced physician rates 12 percent. In the years prior to medical liability reform, 13 carriers left the state and 6,000 physicians had to scramble for coverage.

The largest hospital writer in Texas, Healthcare Indemnity, Inc. has reduced rates by 20 percent (TDI report 8/5/04.)

Lawsuits Down Dramatically:
Medical liability lawsuits in several counties considered high-risk for physicians have decreased dramatically since the new law took effect on 9/01/03:

• Harris County: 105 lawsuits were filed from 9/01/03 to 7/31/04, compared to 746 lawsuits filed in the three months prior.
• Bexar County: 81 lawsuits were filed from 9/01/03 to 4/30/04, compared to 304 lawsuits filed in the three months prior.
• Nueces County: 32 lawsuits were filed from 9/01/03 to 4/30/03, compared to 108 lawsuits filed in the three months prior.
• Cameron County: 17 lawsuits were filed from 9/01/03 to 4/30/04, compared to 28 lawsuits filed the three months prior.
• Hidalgo County: 17 lawsuits were filed from 9/01/03 to 4/30/04, compared to 96 lawsuits filed the three months prior.
  

Lawsuits filed against hospitals declined 70 percent in the first ten months since House Bill 4 took effect (9/1/03-6/30/04.) In the month prior to the new law some hospitals reported a 300 percent increase in lawsuits filed.


Patient Access to Care is Improving:
Since medical liability reforms took effect, the number of physicians maintaining or enhancing services has increased dramatically, with nine percent providing new services in addition to maintaining existing ones, and 73 percent making no changes to services they offer (Texas Medical Association Survey, 8/23/04.) Since 9/1/03, 13 percent of doctors have reduced their services, compared to 51 percent who reduced services in the previous two years.

The number of physicians who have found it easier to recruit new physicians to their practice, hospital or community is now higher than the number of physicians who have indicated it is more difficult (TMA survey, 8/23/04.) Of those who indicated it is easier, 97 percent indicated the professional liability climate was either very important or somewhat important in their ability to recruit.

Reports from several communities show patients have access to additional physicians and specialists:

• Corpus Christi: Driscoll Children's Hospital has experienced a one-year savings of $204,000 on its liability premiums, plus an additional $250,000 that would have otherwise been allocated to its self-insurance trust fund. The hospital has hired close to a dozen pediatric specialists since September2003 (including two cardiologists, three neonatologists, a hematologist, a plastic surgeon, an anesthesiologist, and a general surgeon.
• Corpus Christi: Christus Hospitals, which are saving nearly $21 million statewide in liability costs, are saving millions of dollars at Christus Spohn in Corpus Christi. The hospital has experienced a net gain of 22 physicians. After losing four neurosurgeons in the three years prior, Corpus Christi recently recruited a new neurosurgeon.
• Rio Grande Valley: Driscoll Children's Hospital has built new pediatric specialty clinics in McAllen and Brownsville in partnership with Valley Baptist Medical Center. Rio Grande Regional estimates $750,000 in liability savings and has recruited two neonatologists.
• San Antonio: Christus Santa Rosa has saved $935,000 in liability costs and expanded specialized care services.
• Beaumont: Christus St. Elizabeth has yielded $1.372 million in savings. Beaumont has also recruited four new anesthesiologists. It was just two years ago that Christus St. Mary's in
• Port Arthur canceled a dozen surgeries over an eight hour period because their anesthesiologists lost their insurance.
• Austin: Austin has gained 16 new obstetricians in a year after losing the same amount over the preceding 2 ½ years.
• Dallas: Baylor Hospital reports that seven reinsurance companies are bidding for their insurance renewal, compared to just one company a year ago. They estimate liability savings in "the seven figures," and doctors insured by the Baylor Health Care System "Health Texas" group can expect a premium decrease of more than ten percent (Dallas Morning News, "Hospitals find healthy savings," 8/23/04).
• Fredericksburg: Two obstetricians placed an ad in the paper thanking voters for passing Proposition 12 and announced they would resume their obstetrics practice."
  

September 20, 2004:

Relative Importance of California's MICRA vs Proposition 103

I think MICRA-type tort system reform is much more important than Proposition 103-type reform because of Stigler's Law. George Stigler won the Nobel Prize in Economics in part by proving that instead of protecting the public, some regulations protect firms, organizations and professional and occupational groups from competition. This is because state regulated insurance companies are often able to "capture" and control the state regulatory agencies and insurance commissioner to serve their own commercial interests.

As usual, with billions of dollars* in annual medical malpractice tort system settlements and awards at stake, those who benefit from financially successful medical negligence claims (consumer plaintiffs , trial attorneys and consumer advocacy groups) will invariably:

• view the same statistics very differently than healthcare providers and their allies,
• often create "mis or disinformation", and
• do anything else necessary to block any change in the status quo that might adversely impact their growing earning power.
  

*A total of $24.5 billion in 2002 according to Tillinghast-Towers Perrin. This amount representing 10.5 % of the $233 billion, or $809 for every person in the country, that the entire U.S. tort system cost consumers in that year. Since 1975, national costs for medical malpractice liability lawsuits have steadily grown at a faster pace than for all other torts. We are all living in an increasingly litigious society.

This is why determining the true comparative impact in California of MICRA (passed in 1975) and Proposition 103 (passed in 1988) is a critical part of creating any legislative solution in Rhode Island or in any other state.

MALPRACTICE REFORM OPPONENTS:
The perspective of the trial attorneys and consumer advocacy groups is accurately reflected in recent published quotes from David S. Casey, Jr., President of the Association of Trial Lawyers of America in his June 27, 2004 letter to the Providence Journal Editor entitled "Insurance Caps Hurt Victims of Malpractice":

"Caps on jury awards have not solved the problem in states that have adopted them and caps perversely hurt those most seriously injured by medical errors. California is not a triumph for cap-driven "reform." In fact, it was insurance reform that actually netted lower premiums for doctors in my home state, not "one-size-fits-all" limits on jury verdicts. Check out the facts please, and don’t believe the insurance industry’s propaganda."

Similarly, a February 16, 2004 Media Release from Public Citizen and Georgia Watch ("Protecting Georgia Families") claimed:

"California’s lower malpractice insurance premiums are due to insurance reforms, not damage caps. In the first 12 years of MICRA (1976-1988), that capped non-economic damages at $250,000, total medical-malpractice insurance premiums paid by health providers increased 190 percent (almost 16 percent annually). But under Proposition 103, a major insurance reform passed by voters, malpractice premiums paid declined 2 percent from 1988-2001."

The full report, Increasing Doctor Accountability & Patient Safety: Solving Georgia’s Medical Malpractice "Crisis", is available at:

http://www.citizen.org/congress/civjus/medmal/articles.cfm?ID=11077.

A summary of Proposition 103 is available at:

http://www.pifc.org/Media/pdffiles/refprop103.pdf

MALPRACTICE REFORM ADVOCATES:
A number of medical liability reform advocates claim that California’s stable medical liability market is due to passage of MICRA in 1975, not Proposition 103 in 1988.

These include the AMA, state Medical Societies, the Physician Insurers Association of America (PIAA), commercial malpractice insurers, and advocacy groups that support pro-physician sponsored legislative medical malpractice reform like the Health Coalition on Liability and Access (HCLA: http://www.hcla.org) and Californians Allied for Patient Protection (CAPP: http://calphys.org/html/bb220.asp).

The CAPP link above provides convincing data that refutes 4 "myths" about Proposition 103 and claims that:

"The argument that Proposition 103, the insurance reforms passed by voters in 1988 targeted primarily at auto insurers, is directly or indirectly responsible for keeping malpractice liability premiums in California lower than in other states is based on convenience and coincidence rather than evidence.

There is plenty of evidence, however, that California’s Medical Injury Compensation Reform Act of 1975 has been the driving force that has kept premiums one-half to one-third below those in states without caps on non-economic damages and similar reforms. Here are some commonly held misconceptions about Prop. 103 and the facts to refute them from Californians Allied for Patient Protection. http://www.micra.org.

The HCLA claims that " Proposition 103 has had no impact on California medical liability premiums." and includes the following data on MICRA:

"How successful has MICRA been? At the height of California’s medical liability crisis, insurance premiums for anesthesiologists reached $22,702 per year. Current rates are $10,337 per year---50% below the rates charged in 1975. (Norcal Mutual Insurance Company, January 31, 2003).

Since MICRA was enacted 27 years ago, medical liability premiums in California have risen just 167 percent compared to 505 percent for the rest of the nation (a 33 percent advantage). (Physician Insurers Association of America).

The stridency of the malpractice reform opponents about caps may be partly due to a recent analysis published in the journal Health Affairs (January 21, 2004) indicating that tort system reform involving award caps has worked nationally in the 24 (48 %) of U.S. states that have implemented them:

"Jury award caps exist in 24 states and are the only malpractice reform that has reduced physicians’ premiums, reducing them 17 percent."

http://www.healthaffairs.org/press/janfeb0403.htm .

The AMA Health Policy Group produces a "Health Care Financial Trends Report." The most recent edition (June 2004) reveals our nation's massive investments in health care -- nearly $1.6 trillion in 2002, increasing to an estimated $2 trillion in 2004-- and is filled with a number of educational charts and statistics.

AMA members can visit the following link for a free copy:

http://enews.ama-assn.org/UM/T.asp?A40.442.1654.20.271796

The current AMA President, John C. Nelson, MD, MPH noted in the July 22, 2004 edition of the AMA eVoice a section of this report entitled: "Professional Liability Insurance Update: Growth in Medical Liability Premiums in California vs. the Rest of the U.S."

"As you know, California's $250,000 cap on non-economic damages, mandated by the passage of the Medical Injury Compensation Reform Act (MICRA) in 1975, has served as a model for what we at the AMA hope to accomplish nationwide because medical liability premiums are stable and competitive in California and exactly the opposite in many other states.

In the report, we learn that premiums have grown exponentially faster outside of California since MICRA was enacted. In fact, while California premiums have risen 245 percent, the rest of the country has experienced a 750 percent increase! (also a 33 percent advantage). That's further proof that MICRA-style reforms work -- and work well.

Speaking of which, congratulations to Wyoming's House and Senate for passing a constitutional amendment to allow the legislature to enact caps on non-economic damages in medical liability cases. This crisis state's constitution currently prohibits limiting damages in any case involving injury or death. Wyoming patients will vote on approving the amendment this November."

According to the AMA, MICRA protects patients and health care providers by:

• Providing full compensation for all economic damages, including medical bills, lost wages, future earnings, custodial care and rehabilitation.
• Placing a fair and reasonable limit of $250,000 on non-economic damages.
• Establishing a statute of limitations on claims.
• Ensuring that the bulk of any award goes to the plaintiffs, not attorneys.
  

BARRIERS TO MEANINGFUL REFORM:
If the numbers provided by the reform/award cap advocates are correct, I must conclude that Public Citizen and other opponents of award cap-based tort reform are either distorting the statistics or lying. In any case, what still must be overcome is the substantial money and political power behind the liberal mass media, the trial lawyers (including John Edwards, 2004 Democrat candidate for Vice President ) and certain Democratic members of Congress and the Rhode Island General assembly.

The liberal mass media attitude on tort reform is well characterized by NY Times Op-Ed columnist Bob Herbert in his June 25, 2004 NY Times essay entitled: "Cooking Up a Crisis."

http://www.nytimes.com/2004/06/25/opinion/25HERB.html

"The disinformation campaign of the tort reform zealots and their sustained attacks on the rights of patients who have been harmed by doctors, have been disgraceful. The proper prescription for this apparently chronic disorder is a strong dose of the truth."

According to AMA Immediate Past President Dr. Donald J. Palmisano, while Bob Herbert, writer of the columns, focuses on tidbits that Dr. Palmisano thinks dilute the overwhelming body of evidence that a medical liability crisis exists, the rest of the nation is actively seeking a solution.

Mr. Herbert cited an August 2003 General Accounting Office (GAO) report that found mixed evidence on access to care caused by the medical liability crisis. However, as Dr. Palmisano points out, he didn't mention a key finding of the report that states, "growth in malpractice premiums and claims payments has been slower in states that enacted tort reform laws that include certain caps on non-economic damage." Also not mentioned in the column was the June 2003 GAO report that verifies what the AMA has said about the crisis: medical liability premiums have "increased dramatically" in some states and specialties - and that increasing awards "appear to be the primary driver."

"One key statistic can't be denied: Americans want medical liability reform," Dr. Palmisano wrote. "An overwhelming 78 percent say they are concerned about the impact that rising liability costs have on access to care, and 72 percent support a law that caps non-economic damages."

http://www.ama-assn.org/ama/pub/article/print/9255-8684.html .

Rhode Island trial lawyer Max Wistow, Esq. accurately summarized the perspective of all his colleagues, Public Citizen, Ocean State Action and other consumer advocacy groups in this recent Providence Journal quote:

"Doctors have chosen to protect each other in ways that are scandalous. In Rhode Island, 4.8% of doctors were responsible for 52.7 % of all the dollars paid in settlements and jury awards. No one ever goes after those doctors."

This perspective, based on over 14 years of National Practitioner Databank (NPDB) statistics, is exactly why any genuine and meaningful reform effort must address all three interrelated areas: the state-based medical discipline system, the civil justice (tort) system for medical liability and the medical liability insurance system. The importance of a combined approach is very well illustrated by the impact all three types of reform have had since they were legislated in Texas just one year ago.

THE 2003 TEXAS LEGISLATIVE SOLUTIONS:
Texas doctors and Rep. Joe Nixon (R-Houston) have already emulated California's MICRA in September, 2003, combining passage of H.B 4 and "Proposition 12" to amend the state constitution and immediately validate the legislature's work in passing H.B. 4 and Governor Perry signing it into law with passage of SB104 and SB14 (see below).

The $250,000 cap on jury awards for pain and suffering was the first part of a three-step process that included reforming the state's medical discipline system, tort system reform and insurance reform which forces the three medical liability insurance carriers to file and justify their rate changes with the Department of Insurance.

http://www.consumerwatchdog.org/healthcare/nw/nw003647.php3 .

A THREE-LEGGED APPROACH TO MED-MAL REFORM IN TEXAS:
(Texas Legislature 78th Regular session--2003)
I. Medical Discipline System Reform: SB104
II. Tort System Reform: HB4 and Proposition 12
III. Insurance System Reform: SB14

The content of the combination of medical liability market reform bills that were passed by wide margins in the 78th Texas Legislature (2003/2004) are available online at the following URL:

http://www.capitol.state.tx.us/tlo/legislation/bill_status.htm .

You can search on all three bills (SB104, HB4 and SB14) by highlighting "78th Regular Session-2003", and then inserting the number of each bill in the "Bill Number" field and submitting a search for the "History" or "Text" of each bill.

A summary of the successful 2003 Texas "Proposition 12" voter constitutional amendment is at:

http://www.scotthochberg.com/amends/amend12.html .

It is still too early to predict the full impact of these Texas reforms passed only last fall. However, since January 2004, the Texas Medical Liability Trust, a physician-owned insurer, has decreased its premium rates by 12% (e-Internal Medicine News 8/1/04 issue: "Physicians Push for Caps in Liability Reform Efforts, by Mary Ellen Schneider).

TEXAS Medical Liability Reform Fact Sheet: (from Governor Perry's Web site)
"In the one year since we passed major medical liability reforms, patients are experiencing better access to healthcare, communities are recruiting new physicians, insurance costs are down significantly for many hospitals and some doctors, and lawsuits filed against healthcare providers have declined dramatically." - Governor Rick Perry

http://www.governor.state.tx.us/divisions/press/tortreform/factsheet.htm

Medical Liability Reforms are improving patient access to the healthcare delivery system all across Texas. Statewide and local data show a stunning reverse in recent trends with hospitals and communities experiencing much greater success in recruiting physicians, lower insurance costs for hospitals leading to an expansion of indigent and charity care in some instances, a tremendous decrease in lawsuits against healthcare providers, and lower rates for some doctors compared to skyrocketing increases in previous years.

HERE ARE THE FACTS FROM TEXAS:

• Lower Insurance Costs: Texas Hospitals are reporting a 17 percent decrease in professional liability premiums for 2004-2005 (Texas Hospital Association Survey with responses from 172 acute-care hospitals, 8/23/04.) In 2003 premiums rose more than 50 percent.
  Ten new carriers are seeking entry into the Texas market (Texas Department of Insurance report 8/5/04), and the largest carrier, the Texas Medical Liability Trust, has reduced physician rates 12 percent. In the years prior to medical liability reform, 13 carriers left the state and 6,000 physicians had to scramble for coverage.
  The largest hospital writer in Texas, Healthcare Indemnity, Inc. has reduced rates by 20 percent (TDI report 8/5/04.)
• Lawsuits Down Dramatically: Medical liability lawsuits in several counties considered high-risk for physicians have decreased dramatically since the new law took effect on 9/01/03:
  Harris County: 105 lawsuits were filed from 9/01/03 to 7/31/04, compared to 746 lawsuits filed in the three months prior.
  Bexar County: 81 lawsuits were filed from 9/01/03 to 4/30/04, compared to 304 lawsuits filed in the three months prior.
  Nueces County: 32 lawsuits were filed from 9/01/03 to 4/30/03, compared to 108 lawsuits filed in the three months prior.
  Cameron County: 17 lawsuits were filed from 9/01/03 to 4/30/04, compared to 28 lawsuits filed the three months prior.
  Hidalgo County: 17 lawsuits were filed from 9/01/03 to 4/30/04, compared to 96 lawsuits filed the three months prior.
  Lawsuits filed against hospitals declined 70 percent in the first ten months since House Bill 4 took effect (9/1/03-6/30/04.) In the month prior to the new law some hospitals reported a 300 percent increase in lawsuits filed.

• Patient Access to Care is Improving:
  Since medical liability reforms took effect, the number of physicians maintaining or enhancing services has increased dramatically, with nine percent providing new services in addition to maintaining existing ones, and 73 percent making no changes to services they offer (Texas Medical Association Survey, 8/23/04.) Since 9/1/03, 13 percent of doctors have reduced their services, compared to 51 percent who reduced services in the previous two years.
• The number of physicians who have found it easier to recruit new physicians to their practice, hospital or community is now higher than the number of physicians who have indicated it is more difficult (TMA survey, 8/23/04.) Of those who indicated it is easier, 97 percent indicated the professional liability climate was either very important or somewhat important in their ability to recruit.
• Reports from several communities show patients have access to additional physicians and specialists:
  Corpus Christi: Driscoll Children's Hospital has experienced a one-year savings of $204,000 on its liability premiums, plus an additional $250,000 that would have otherwise been allocated to its self-insurance trust fund. The hospital has hired close to a dozen pediatric specialists since September2003 (including two cardiologists, three neonatologists, a hematologist, a plastic surgeon, an anesthesiologist, and a general surgeon.
  Corpus Christi: Christus Hospitals, which are saving nearly $21 million statewide in liability costs, are saving millions of dollars at Christus Spohn in Corpus Christi. The hospital has experienced a net gain of 22 physicians. After losing four neurosurgeons in the three years prior, Corpus Christi recently recruited a new neurosurgeon.
  Rio Grande Valley: Driscoll Children's Hospital has built new pediatric specialty clinics in McAllen and Brownsville in partnership with Valley Baptist Medical Center. Rio Grande Regional estimates $750,000 in liability savings and has recruited two neonatologists.
  San Antonio: Christus Santa Rosa has saved $935,000 in liability costs and expanded specialized care services.
  Beaumont: Christus St. Elizabeth has yielded $1.372 million in savings. Beaumont has also recruited four new anesthesiologists. It was just two years ago that Christus St. Mary's in Port Arthur canceled a dozen surgeries over an eight hour period because their anesthesiologists lost their insurance.
  Austin: Austin has gained 16 new obstetricians in a year after losing the same amount over the preceding 2 ½ years.
  Dallas: Baylor Hospital reports that seven reinsurance companies are bidding for their insurance renewal, compared to just one company a year ago. They estimate liability savings in "the seven figures," and doctors insured by the Baylor Health Care System "Health Texas" group can expect a premium decrease of more than ten percent (Dallas Morning News, "Hospitals find healthy savings," 8/23/04).
  Fredericksburg: Two obstetricians placed an ad in the paper thanking voters for passing Proposition 12 and announced they would resume their obstetrics practice.
  

VOTE NO ON FRIVOLOUS LAWSUITS:

According to a recent survey of 800 registered voters in 17 "swing" states, America's patients are more likely to vote for a candidate who supports medical malpractice reform—regardless of their political affiliation.

More than two-thirds of the voters polled said the current medical liability rules should be changed to reduce frivolous lawsuits. Democrats, however, are more likely than Republicans to say they have heard enough about the issue of reforming the medical liability system. On other health care issues, a majority of the respondents were more likely to vote for a candidate who supported competition between different private health plans to give seniors the best benefits at the most affordable cost. The survey was commissioned by America's Health Insurance Plans and conducted by Public Opinion Strategies.

MY PERSONAL CONCLUSIONS TO DATE:
In face of the attitude of at least some registered voters on frivolous medical liability lawsuits, the inflexible stance of the local and national opponents of malpractice reform can be converted from a significant barrier into a big opportunity for disruptive beneficial change in the status quo. By simultaneously focusing the public debate on increasing patient safety, along with Texas-style tort and insurance reforms, I believe that it could prove feasible to build a public consensus for legislating all three measures in Rhode Island in 2005.

SUMMARY RHODE ISLAND ACTION PLAN: (from the Med-mal liability reform Weblog:

http://www.med-malliabilityreform.blogspot.com

First, reform the medical discipline market: Increase patient safety immediately and for the long term by creating and implementing fair but firm economic sanctions for the small group of most egregious repeat offenders whose performance records combine excess number of payouts* with serious disciplinary actions.

Second, reform the lottery-like aspects of the tort** (civil-justice) system: Reform the medical liability market by enacting measures equivalent to California's Medical Injury Compensation Reform Act (MICRA) of 1975 (only six of the 24 states with a non-economic damage cap currently have set it at a $250,000).

Third, reform the insurance industry: Reform medical malpractice and all other major insurance lines by enacting measures equivalent to California's Proposition 103 of 1988 (i.e. convert Rhode Island from an "open competition system" to a "prior approval" state).

If the Public Citizen/Georgia Watch statistics on the impact of MICRA vs Proposition 103 in California prove incorrect, it would suggest to me that if # I and #II can be accomplished in Rhode Island, #III may prove to be either optional or even unnecessary.

*The Percentage of Physicians with Number of Malpractice Reports in the National Practitioners Data Bank (NPDB) between September, 1990 and December, 2002: One Report = 63.4% Two Reports = 20.2% 3-5 Reports = 13.4% 6-10 Reports = 2.5% >10 Reports = 0.5%

** a tort (from Old French, injury) is a "a wrongful act done willfully and negligently that injures another for which a civil suit can be brought."

AN ACTION PLAN FOR THE DETERIORATING MEDICAL LIABILITY INSURANCE MARKET IN RHODE ISLAND:

In June, 2002 the Rhode Island Medical Society published a Report and Update on medical professional liability in the state describing how it mirrored the rest of the nation and listing the seven carriers lost to Rhode Island in the previous 12 months (St. Paul; AIG; CAN; HUM; Legion; Phico; Zurich).

At that time, there were only six surviving medical malpractice carriers in Rhode Island insuring a total of 3,300 physicians. These included:
(1)one physician-owned mutual (Norcal with 1,700),
(2)two for-profit stock companies (ProSelect with 300 and General Electric MedPro with 200),
(3)one quasi-public state agency (Rhode Island MM-JUA with 200), and
(4)two hospital-owned, off-shore self-insurance companies (RISE with 700 and Women & Infants Indemnity with 200).

These numbers were rough estimates. Also, because many physicians practice in multiple settings and therefore have multiple insurance policies, the total of 3,300 exceeds the number of physicians who are actually present and practicing in Rhode Island.

The structure of the Rhode Island JUA (Medical Malpractice Joint Underwriting Association of Rhode Island)is such that the JUA could virtually never become insolvent. (This positive assessment of the JUA's strength is supported by the Judge Torres decision of February, 1991).

Hospital-owned off-shore "captives" are not domestically regulated carriers. Information on their capitalization, reserves and loss experience is not publicly available.

See: http://www.rimed.org/news02jun.html

In June 2004, General Electric MedPro announced it will be leaving the Rhode Island market and its remaining 130 covered physicians.

This year in the Rhode Island General Assembly, the Rhode Island Medical Society submitted the 2004 Medical Liability Reform Act to the Judiciary Committees in the House (H7850. Representative Robert E. Flaherty, Chairman) and Senate (S2473. Senator Michael J. McCaffrey, Chairman).

This Medical Society bill was intended to accomplish the following:
(1) Reduce the time injured Rhode Islanders would have to wait for a settlement or award (currently 6.4 years, the longest delay in the nation).
(2) Reduce the 12 percent prejudgement interest rate on successful lawsuit payouts.
(3) Require an expert to certify that a case has merit before it can be filed.
(4) Require a statute of limitations (a suit involving a child must be filed within three years of age 8, not by age 18 as now required).

A bill submitted on behalf of Governor Carcieri this year contained similar provisions, plus a cap on malpractice awards for pain and suffering.

Some of the key reasons professional liability rates are rising so fast in Rhode Island are described in a PDF file on the online May/June 2004 issue of the Newsletter of the RI Medical Society at:

http://www.rimed.org/omeganews5_10.pdf.

In my personal opinion, the H7850 and S2473 bills represent important and long overdue incremental reforms which would benefit both truly injured patients with valid medical negligence claims and the majority of Rhode Island's non-negligent physicians.

However, real medical liability market reform demands not only these common sense measures but also a combination of broader initiatives. Both a clear vision for future reform and substantive, not just incremental, changes are necessary. Policy makers must recognize that patchwork policies will not achieve the fundamental restructuring that is so badly needed. These major "beneficially disruptive" innovations in the system must not be based on the status quo. They must be initiated and catalyzed by an unprecedented, physician-led and insurer-supported effort to shift the focus of reform to increasing patient safety. This will require simultaneously overcoming the tyranny of the minority of physicians with the worst performance records and fundamentally changing the state's existing destructive medical malpractice system.

Even more so than with the two prior medical malpractice insurance crises since 1964, time is rapidly running out for both Rhode Island doctors and their patients.

Before it becomes too late to help, creative structural reforms that truly serve the private and public interests of all of the medical liability stakeholders must be proposed, communicated, enacted and implemented.

Although enactment of the needed legislation and regulations cannot occur until the Rhode Island General Assembly reconvenes in January 2005, it may not prove to be too late if Rhode Island seizes the opportunity to lead the nation in meaningful and durable patient-centered reform by carefully considering, discussing and implementing all three of the following measures.

SUMMARY ACTION PLAN FOR RHODE ISLAND:

I. Medical Discipline:
Increase patient safety immediately and for the long term by creating and implementing fair but firm economic sanctions for the small group of most egregious repeat offenders whose performance records combine excess payouts* with serious disciplinary actions.(mirroring the Texas legislature's SB104 in 2003.)

II. Tort System:
Enact measures equivalent to California's Medical Injury Compensation Reform Act (MICRA) of 1975 and the Texas legislature's HB4 and Proposition 12 in 2003.

III.Insurance System:
Enact measures equivalent to California's Proposition 103 of 1988 and the Texas legislature's SB14 in 2003.



*The Percentage of Physicians with Number of Malpractice Reports in the National Practitioners Data Bank (NPDB)between September, 1990 and December, 2002:
One Report = 63.4%
Two Reports = 20.2%
3-5 Reports = 13.4%
6-10 Reports = 2.5%
>10 Reports = 0.5%

The NPDB Public Use Data File does not include any information that identifies individual practitioners or reporting entities. The file is designed to provide data for statistical analysis only. (http://www.npdb-hipdb.com)