Medical malpractice back on the table?

WASHINGTON — As lawmakers prepare for Thursday’s bipartisan health care summit and look for ways to control costs, medical malpractice could be back in the spotlight.

Studies have found that capping malpractice damage awards and making other changes would help reduce overall health care spending nationally. But it’s no magic bullet: Estimates on the size of that reduction vary from a minimal one to, in a perfect world, maybe 10 percent of overall health spending.

Still, the lack of discussion about the issue as part of the health care debate has rankled Republicans. How it’s handled Thursday could be a test of whether the summit’s bipartisan billing is serious or just for show.

The Senate Democrats’ version of the health insurance overhaul provides funding for grants that states could use to explore alternatives to the current litigation system. President Barack Obama included such state-based grants in the proposal he unveiled Monday.

Sen. Ben Nelson, D-Neb., wrote in a column made available to Nebraska newspapers that one voter he spoke with insisted that tort reform be included in any health care legislation.

“When I quickly responded, ‘It is,’ it took him by surprise,” Nelson wrote. “There’s a study that looks at Nebraska’s tough tort law that helps hold down medical malpractice lawsuits to see how it could apply nationally.”

Nelson spokesman Jake Thompson said the senator was referring to the state demonstration grants in the Senate bill that all states would be able to seek.

Alternatives that states might explore could include ways to get health care providers to admit mistakes earlier and address them without all the drawn-out legal wrangling. They also could include the creation of special health care courts that would rely on standard compensation for certain types of injuries, with verdicts determined by judges with expertise in medical malpractice cases.

Right now medical malpractice laws vary from state to state, although most have some cap on noneconomic damages such as pain and suffering.

Iowa has no cap on damages, while Nebraska limits malpractice damage awards to $1.75 million.

Nebraska doctors are required to carry a certain level of malpractice insurance — $500,000 per incident. They also pay a surcharge that goes into an excess liability fund. Excess damages come from that fund.

Nebraska’s cap is particularly tough because it limits all damages, including actual damages suffered by a plaintiff. That system has helped keep the state’s medical malpractice insurance rates among the lowest in the country. But it also has drawn complaints that such a cap is unfair to patients who have suffered catastrophic injuries with costs that exceed the cap.

Mike Abrams of the Iowa Medical Society said caps on certain damages represent viable public policy. But he said there are other ways of dealing with the current culture of litigation, which he said leads to “voracious consumption of health care.”

He said enough studies have been conducted on the topic already and questioned whether the state demonstration projects in the health care legislation would lead to any real changes.

“It’s possible that that’s very real, and it’s also possible that it’s a political punt,” Abrams said.

Omaha surgeon Alan Thorson, chairman of the professional liability committee of the Nebraska Medical Association, said the projects could explore promising alternatives such as special health care courts. But he noted that the Senate bill’s initial funding for those projects is only $25 million.

“That’s not much for an issue that has the potential for a huge impact,” Thorson said.

How much impact it actually would have is part of the debate on how much to focus on curbing medical malpractice costs.

The Congressional Budget Office looked at typical proposals such as caps on noneconomic damage awards, as well as changes to rules of evidence and statutes of limitations. The budget office found that those proposals would reduce health care spending directly by lowering medical malpractice insurance premiums and indirectly by curbing “defensive medicine.”

Defensive medicine refers to the excessive scans, tests and other procedures that doctors order because they fear litigation.

But the budget office found that those proposals would lower health care spending nationally by only about half a percent, or $11 billion in 2009. The proposals would reduce federal budget deficits by about $54 billion over 10 years, according to the CBO.

A spokesman for the American Tort Reform Association, Darren McKinney, suggested that those estimates are too low and pointed to other studies that have found more significant potential for savings. Lawrence McQuillan of the Pacific Research Institute, for example, has suggested that defensive medicine costs $191 billion a year, which is just under 10 percent of overall health care spending in the country.

But McKinney and other advocates say every bit helps in the effort to tame such a massive problem.

“If we save five bucks, it’s worth pursuing because these lawsuits shouldn’t be occurring in the first place,” McKinney said. “I don’t really see any merit in those arguments suggesting, ‘Well, it wouldn’t save us a trillion dollars, so why bother?’”

Nebraska’s malpractice law also has its critics, however. Trial attorneys say that the cap has proved inadequate in some major cases and that the law throws up obstacles to plaintiffs, such as requirements or restrictions that often lead to separate trials when state-run health care facilities are involved.

Trial attorneys also say that complaints about runaway litigation are overblown.

Because it costs $50,000 to $100,000 to pursue a medical malpractice case, “there aren’t any of these frivolous cases — that’s just a lot of nonsense,” said Lincoln attorney Herb Friedman. “Lawyers aren’t taking these cases willy-nilly.”

State Sen. Gwen Howard of Omaha has introduced a bill that would allow for unlimited economic damages in such lawsuits in Nebraska, while still capping noneconomic damages. That bill has received a hearing, but it’s unclear whether it will reach the floor this session.

Thorson of the state medical association acknowledged that sometimes people have actual expenses that exceed the cap.

He said if the goal is ensuring that those people collect all of their actual damages, then the system needs to be more efficient. He said damages awarded in court get eaten up with administrative costs and attorney fees.

Nebraska’s cap has worked well to keep medical malpractice insurance rates low, the surgeon said, which helps to curb health care costs and ensure that doctors want to practice in the state.

But Thorson also said the state cap has a “minimal impact” on defensive medicine, because Nebraska doctors still have the same fears about ending up in court as those in any other state.

A doctor can follow every standard of care with a patient and end up with a bad outcome, particularly in certain high-risk cases, Thorson said. Swayed by emotion over the patient’s tragedy, a jury might decide to award damages even if the doctor is not at fault, he said.

“You have to do absolutely everything on everybody, or you risk being sued for it later,” Thorson said.

Contact the writer:

202-662-7270, joe.morton@owh.com

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