Lewiston Sun Journal, Maine
May 3, 2003
There is no patient benefit in tort reform
Insurance companies will not promise to reduce rates even if jury awards are capped.
S607, the "Health Act of 2003," proposes increasing patient access to cost-effective "better" health care by limiting
the amount of non-economic damages patients receive as the result of successful lawsuits; no matter how
egregious the malpractice or how serious the injury. The legislation gained support via the myth that by limiting the amount
damages paid to patients, medical malpractice insurance premiums would decrease for health care providers, and
that savings would then be passed on to the consumer. In the text of the bill, the definition of non-economic
damages is "physical and emotional pain, suffering, inconvenience, physical impairment, mental
anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium, hedonic damages,
injury to reputation, and all other non pecuniary losses of any kind or nature."
In addition to setting the $250,000 cap on damages, the legislation allows the option of entering a judgment ordering future payments (equaling or
exceeding $50,000) be paid by periodic payments in accordance with the Uniform Periodic Payment of Judgments
Act. This gives the insurer the opportunity to invest the due payment over a period of years, opposed to
giving the injured patient that benefit. What will be the effectiveness of restrictive limits on non-economic caps if
S607 passes? Will malpractice insurance premiums decrease? Will the cost of health care services reflect this cost
savings? What are the measures which will be implemented to make our health care "better"?
The current data are inconclusive and contradictory. In January, Americans for Insurance Reform released their analysis stating
that the average medical malpractice insurance payment (closed claim) over the last decade has averaged $28,524. The
Consumer Federation of America's study indicates an average of $42,607 (based on 2000 figures). The Jury
Verdict Research, a firm cited by the insurers, claims that the median jury award in medical malpractice cases rose
to $1 million in 2000. Their spokesman has publicly acknowledged that there are holes in the statistics.
The U.S. Bureau of Justice Statistics survey cites the figure at $285,576 (based on 1996 figures).
Will reducing the cap on non-economic damages reduce malpractice insurance premiums? Perhaps not.
In New Jersey, at a June 3, 2002 meeting of the New Jersey Assembly of Joint Committees of Banking & Insurance and Health & Human Services
on Medical Malpractice, Assemblyman Paul D'Amato asked Patricia Costanata, chairman and
CEO of the MIIX Group of Insurance Companies, whether if the state passes caps on damages, you promise not to raise premiums
and will reduce them. Her response, "No, we're not telling them (insureds) that."
This was echoed in Nevada as well, last summer, when insurance groups fought attempts to add a provision to guarantee lower rates in Nevada's tort reform legislation. Two of Nevada's major insurers stated that they would not reduce malpractice insurance rates.
The trend of states implementing caps with little benefit to patients or health care providers dates back to the '80s.
In 1986, in the state of Washington, Physicians Insurance Association, which had testified that comprehensive tort
reform legislation would reduce premiums, followed up by asking for a 25-30 percent rate hike after the
legislation was enacted.
Likewise, following the 1986 enactment of Florida's tort reforms, Aetna and St. Paul Marine Insurance Company said that it would not reduce rates. In 1986, Connecticut enacted tort reforms. In 1987, one of their lawmakers was quoted as saying, "The insurance industry now says those measures will have no effect on insurance rates. We have been disappointed by the response of the insurance industry. The reforms we passed should have led to rate reductions because we made it more difficult to recover, or set limits on recovery. But this hasn't happened." Industry representatives have shared similar opinions in their published statements.
In 1999, Sherman Joyce, president of the American Tort Reform Association stated, "We wouldn't tell you or anyone that the reason to pass tort reform would be to reduce insurance rates." Victor Schwartz was quoted as saying, "Many tort reform advocates do not contend that restricting litigation will lower insurance rates, and I have never said that in 30 years."
Debra Ballen, American Insurance Association's executive vice president, followed up in 2002 declaring, "Insurers
never promised that tort reform would achieve specific premium savings." The fat cat is getting fatter. Doctors are
facing the increasing burden of higher insurance premiums, and the insurers are getting richer. Patients are
the ones who pay for the fat cat's opulent diet through increased rates for
health care services.
In July 2002, 10 members of the U.S. House of Representatives requested a U.S. General Accounting Office
investigation of the insurance industry's responsibility for creating nationwide medical malpractice insurance
problems for doctors, including how the insurers' declining investment income and "insurance industry practices"
have contributed to skyrocketing rates for doctors. This research needs to be concluded and its findings
released to the public prior to any reasonable consideration of national tort reform.
Of equal concern in S607 is the absence of the defined measures to increase patient safety and reduce patient
harm. The Institute of Medicine's 1999 Report, "To Err is Human: Building a Safer
Health Care System," documents that the epidemic of medical errors claims between 44,000 and 98,000 patient lives annually; with total
national costs approaching $29 billion a year. And yet, according to the 1990 Harvard
Medical Practice Study, the percentage of patients injured by medical negligence who actually file a lawsuit is minimal; averaging only one in
eight persons afflicted.
S607 unjustly penalizes those who have been injured and suffered the most profound losses as a result of
malpractice. It jeopardizes patients' rights to a jury trial and their right to remedy equal protection and/or separation
of powers. It will not solve the decades long problem of the insurance crisis - some say greed.
Congress must defeat this bill and, in its place, propose patient safety legislation to make our health care system
safer. Safer care is a natural remedy for litigation. Safer health care will save citizens millions of
dollars each year.
My dad was 53 when he became a victim. My daughter was 11. My son was 6. She'll have more memories of her
grandfather than he will. My dad will not be present at the birth of his grandchildren yet to come. He
will not witness the high school graduations of any of his grandchildren. He will not get to walk his youngest daughter down
the wedding aisle. He never had the chance to grow old.
His absence is endured by his family and friends each day. We continue to honor him by celebrating his life and the
gift of his love.
Rebecca Martins of Warren is a patient rights advocate.