The Medical Malpractice Crisis of 2002
Richard E. Anderson, MD, FACP, Chairman of the Board of Governors, The Doctors Company
We know genuine legal reform works
California has 27 years of experience with the MICRA statutes (Medical Injury Compensation Reform Act of 1975). This is not an experiment. We know, we do not speculate, that genuine legal reform works. Since 1975, The Doctors Company malpractice premium rates in California have decreased by 40 percent in constant dollars. This is true despite the fact that there has not been and is not today any limit on actual damages awarded. Check the charts illustrating the results of almost three decades of effective legal liability reform in California.
How did we get here, and how can legal reform make a difference?
Malpractice premiums are rising at an alarming rate in many parts of the United States. A number of physicians have been forced to stop providing high-risk services (meaning the sickest patients are not receiving necessary care), to relocate entire practices to states with a more reasonable legal climate, or to retire prematurely. The rest must bear the burden of ever increasing malpractice insurance costs at a time when medical reimbursements are more constrained than ever. How did we get here?
The meritless majority of malpractice suits
Despite stunning advances in scientific knowledge, medicine remains more art than science, because human beings are not machines. Medicine's achievements today, and promise tomorrow, as remarkable as they are, can never be guaranteed. It is a sad commentary on our society that approximately one of every six practicing physicians faces a malpractice claim every year. In high-risk specialties such as obstetrics, orthopedics, trauma surgery, and neurosurgery, there is one claim for each doctor every two and a half years. It is critical to understand that seven to eight out of 10 of these claims are found to be without merit, but still the onslaught continues.
Unlimited awards mean unlimited premium hikes
The insurance system was able to accommodate even this inexcusable volume of litigation as long as the size of the few valid claims was predictable. Unfortunately, in the past few years there has been an explosion in the cost of individual claims. Texas has seen a $268 million verdict. A number of states have witnessed verdicts in excess of $100 million. The city of Philadelphia has recorded multiple verdicts in excess of $50 million in just the past two years. Arkansas has recorded four malpractice claims totaling $98 million in the past year alone. Insurance is not magic. If society wishes to pay unlimited awards, it will need to tolerate unlimited premiums. Unlimited premiums mean unlimited increases in the cost of medical care. Since health care today is a zero-sum game, these cost increases mean corresponding decreases in accessto necessary medical services.
Claims settle faster in California
We know, we do not speculate, that claims settle about 33 percent faster in California than the rest of the nation because the lottery aspect of noneconomic damages has been controlled.
Even very large judgments can be accommodated
We know that even very large judgments can be accommodated by the insurance system because they can be paid on an annual basis over the intended period of compensation, not as a single jackpot.
Injured patients take home higher awards in California
We know, we do not speculate, that injured patients take home a significantly higher percentage of awards in California, because there is an upper limit on attorney contingency fees.MICRA does not limit access to attorneys
We know that MICRA has not limited access to attorneys. California is a litigious state and the frequency of suits in California is 50 percent higher than the national average. And we know that nearly eight out of 10 claims remain without merit.
MICRA does not limit total awards
Finally, we know that not only does MICRA not limit total awards, but also that malpractice awards still rise faster than inflation in California.
We have been at the forefront for more than 26 years
Founders of The Doctors Company fought for and helped create California's MICRA statutes in 1975. We have remained at the forefront of legal reform efforts ever since. Not all insurance companies share this commitment. There are at least two reasons. First, some companies are reluctant to incur the wrath of the plaintiff's bar. Second, since insurance companies, like any viable business, must price at cost plus, higher premiums can mean larger profits.
We protect the practice of good medicine
The Doctors Company remains unalterably committed to our mission: to protect the practice of good medicine. We back this commitment with outstanding legal defense, with the financial strength needed to fulfill the promise of indemnification for viable claims, and with an unceasing effort to achieve national legal reform. This plain statement is backed by major investments in time, money, and personnel.
We await the return of justice to jurisprudence
Ultimately, we all look forward to the day when justice is returned to medical-legal jurisprudence. Every day, The Doctors Company works to earn the trust of our member-owners.
