Doctors vs. Lawyers
Competing Initiatives Take Different Approaches to Medical Liability Reform
2005-10
On election day Washington voters will consider two ballot measures, Initiative 330 and Initiative 336. Each takes a very different approach to reforming the state’s medical liability laws. This Policy Note summarizes the findings of a longer study on medical liability reform available free from Washington Policy Center.
Initiative 330 is sponsored by the State Medical Association. The doctors group says their proposal is needed because costly lawsuits are fueling higher insurance costs and causing doctors to reduce or close their practices. The result, they say, is shortages in important specialties like obstetrics, neurosurgery and trauma care.
Initiative 330 would cap the non-economic damages, payments for pain, suffering and emotional distress, awarded in a malpractice lawsuit to $350,000 and limit how much of a jury award lawyers could collect as contingency fees. Full payments for medical bills, long-term care and lost wages would remain unchanged.
A competing measure, Initiative 336, is supported by attorneys with the State Trial Lawyers Association. They say the problem lies not with large jury awards and high legal bills, but with bad doctors who injure their patients. They say full access to the courts is needed to redress harm done by doctors, and that the Insurance Commissioner should limit rate increases to keep premium costs in line.
Initiative 336 would increase regulation of malpractice insurance, create a state-subsidized liability insurance program, and revoke the license of doctors convicted three times for medical malpractice.
Expensive malpractice lawsuits have become increasingly controversial in recent years. The resulting higher cost of liability coverage is a major cost-driver for all health care providers. Nationally, doctors, clinics and hospitals spend more than $21 billion a year on malpractice premiums. In Washington, the number of $1 million-plus jury awards has nearly quadrupled in ten years. Under current law there is no limit on how much juries can award in non-economic damages.
Health care providers have no choice but to pass these costs on to patients and employers who pay for employee health benefits. Lawsuits also reduce health care quality. The time doctors spend preparing for trial, dealing with lawyers and giving depositions is time they do not have for medical training or treating patients.
Washington said to be “in crisis”
Washington is one of 21 states identified by the American Medical Association as a state in medical liability crisis, especially in certain specialties. For example, 25% of family practitioners statewide have quit obstetrics since 2000, and between 1998 and 2002 the number of doctors moving out of the state increased 31%. Here are some examples reported in local newspapers:
California adopted non-economic caps in 1975 to stop soaring liability rates. Research by Congress shows the law greatly slowed insurance increases. From 1976 to 2000, malpractice premiums in California increased 167%, while in the rest of the nation they rose 505%. National studies also show non-economic caps are associated with an increase in the number of doctors per resident.
In 2003, Texas adopted a $250,000 cap on non-economic damages. Within a year, 15 new insurance companies had entered the market and the largest insurer, Texas Medical Liability Trust, lowered its rates by 12%.
At the same time, the overall number of doctors in Texas increased 5%, with the largest rise occurring among obstetricians (up 62%) and gynecologists (up 38%).
Washington Policy Center research indicates a pressing need for policymakers to address rising medical liability costs. The Center’s Agenda 2005 policy guide proposes three recommendations:
The Health Professions Quality Assurance office is the state agency responsible for protecting public health by regulating the health care professions. State law says the agency’s is to “assure the public of the adequacy of professional competence and conduct in the healing arts.”
Having accepted the responsibility of assuring the qualifications of practicing physicians, the state policymakers should make sure this vital mission is carried out effectively.
The state should revoke the licenses of incompetent doctors before they do serious harm to patients. Fewer patients would be injured, and fewer lawsuits filed, if state medical officials were more effective in preventing bad doctors from practicing in the first place.
Whatever fate voters choose for Initiatives 330 and 336, Washington policymakers will still have to consider important changes in health care policy that will move the system toward lower costs, better quality and improved services for patients.