Sunday, June 1, 2003
EYE ON WASHINGTON: Wayne M. O'Leary
Malpractice reform: A bitter pill for victims
The scene at the American Medical Association's National Advocacy Conference, held in Washington
in early March, was enough to gladden the hearts of AMA members, insurance-company executives and
GOP fund-raisers alike. The president, featured speaker at the event, was welcomed by the gathered
physicians as a genuine soul mate. Calling for federal action, Bush honed in immediately on the
much-publicized national malpractice-insurance crisis. To the delight of his audience, he
pandered directly to its foremost fears, angers and prejudices.
Recent premium increases in the malpractice coverage doctors purchase could, the president
intoned, be entirely blamed on the legal system; it was all the fault of personal-injury lawyers
"fishing around for a lawsuit." There were too many "frivolous" actions brought against good
doctors, he said, adding that "for the sake of the system," noneconomic damages - i.e. pain and
suffering - should be capped at $250,000. A bill to do just that is presently working its way
through the Republican-controlled Congress.
By Bush's inference, none of our contemporary malpractice litigation has arisen from substandard
hospitals or incompetent doctors, whose existence was barely acknowledged by the AMA assemblage.
That would come as news to the Mexican parents of Jesica Santillan, the victim of fatal transplant
errors at the Duke Medical Center in North Carolina, whose tragic death made national news
last winter. It would also surprise the litigants represented over the years by Democratic
presidential candidate Sen. John Edwards, one of those ambulance-chasing malpractice solicitors,
whose mostly working-class clients have testified to a panoply of horrific outcomes at the
hands of the American medical establishment.
The political bottom line
President Bush and his enthusiastic audience brushed aside such concerns. For the president,
the calculation was simple: Most trial lawyers are Democrats, and most doctors are Republicans.
Doctors, in fact, gave $17.5 million two-thirds of their total campaign contributions to the GOP
in 2001-02, according to the Center for Responsive Politics. The AMA itself, which according to the
Washington Post has warned Democrats against opposing the Bush settlement cap, contributed $1.6
million to GOP congressional candidates in 2002. The White House wants to ensure that those funds
continue to flow into Republican coffers.
There is more than just campaign money and a confluence of interests at play here, however.
George W. Bush, his medical-policy point man Bill Frist, and the members of the AMA are similar
kinds of people: country-club Republicans. They share certain perceptions and biases: Making money
is sacred, medicine should be a business, and legal or regulatory interference with those who
know best, medically or otherwise, is bad for society.
The president did his part for class solidarity when he was governor of Texas. He made "tort
reform" - restrictions on the right to sue - a centerpiece of his pro-corporate state policy,
forcing enactment of caps on legal damages and higher standards of proof for plaintiffs in
medical-malpractice and other injury cases. He also presided happily over a state that
consistently ranks first in the number of for-profit hospitals and first or second in the
percentage of its citizens lacking health insurance. Those dubious distinctions apparently
cost him no lack of sleep.
America's medical elite, for their part, have shown little appetite for any implied humanitarian
mission. News reports indicate that a fifth of all U.S. physicians have stopped taking Medicare cases
because of insufficient reimbursement, and that another fifth have acquired business degrees, the
better to pad their bottom lines. This is unbecoming behavior for a class of individuals
who, according to wealth analyst Andrew Hacker of New York's Queen's College, have constituted
America's highest-paid occupation for most of the past century, with six-figure incomes a standard
feature of their profession. On the other hand, it renders the AMA membership's enthusiasm
for taking its legal costs out of the hides of its victimized patients unsurprising.
To be fair, America's 297,000 AMA doctors - about a third of all doctors nationwide - are
exceptional in their abysmal lack of social consciousness. They belong, after all, to a
quasi-fraternal lobbying organization that has steadfastly opposed any national health insurance
system for almost 70 years and even fought Medicare in its inception, an organization whose
inner councils were dominated by the rightist John Birch Society as late as the1960s. There are
medical practitioners who reject the AMA - the 20,000 members of Physicians for Social
Responsibility, for example - but most of their contemporaries have been content to follow the
AMA's lead in health policy. The malpractice-insurance furor is just the latest instance of that blind acquiescense.
The root of the problem
Few, if any, of the doctors who walked off the job earlier this year in several states to protest
premium increases focused on the obvious source of their unhappiness: the insurance companies,
including those run by their fellow physicians, which now issue more than half of all malpractice
policies. While liability premiums are certainly rising in about a dozen states, in-depth studies
by USA Today and Americans for Insurance Reform (AIR) indicate conclusively that average jury
awards, statistically flat since 1990, are not a significant contributing factor. Rather,
the problem lies in the foolish financial strategies of the medical-malpractice insurance firms, which
routinely invest collected premiums in what has become a casino stock market, in order to add to
their profits.
Throughout the booming 1990s, insurers made 10 percent or more on their investments; last year,
they lost money or earned less than 2 percent. Their answer: Raise rates. Or, as major insurer
The St. Paul Companies has done, drop malpractice coverage, lobby for tort reform, contribute to the
GOP, and wait for a government cap on lawsuit damages before re-entering the market. The problem
for the insured: Those rising malpractice rates are not adequately regulated by the states, which
are theoretically responsible for insurance oversight. AIR, a coalition of nearly 100 consumer
groups, offers a sensible three-part solution:
More meaningful insurance disclosure laws;
Stronger control over insurance rates by state commissions;
Prevention of monopoly pricing by repeal of the insurance industry's federal antitrust exemption
under the 1945 McCarran-Ferguson Act.
In the meantime, a key finding by AIR researchers may serve to illuminate the unhealthy symbiotic
relationship that has developed between conservative politicians, heedless or self-interested doctors, and greedy insurers. The
current liability-insurance "crisis" is the third of the past 30 years, following others that arose
in the mid-1970s and mid-1980s. Each time, a stock-market downturn ate into malpractice-insurer
profits, leading them to raise premiums, cut coverage, proclaim a crisis and blame the nation's
legal system. Their champion in the latest contrived emergency, George W. Bush, is less a
knight-errant than the boy who cried wolf - one too many times.
Wayne M. O'Leary is an Orono writer specializing in labor and economics.