Dueling prescriptions for MD
insurance ills
Legislators debate subsidies vs. award caps
Friday, May 30, 2003
BY ROBERT SCHWANEBERG
Star-Ledger Staff
Wading into the contentious debate over medical malpractice insurance, the McGreevey administration yesterday
endorsed a plan that would set up a state fund to help physicians pay sharply increasing premiums and
continue to practice.
The subsidy fund proposal is an alternative to a bill passed by the state Senate that would limit payments for pain
and suffering to malpractice victims. Doctors groups back the Senate bill, saying big jury awards are
driving up the cost of insurance. Trial lawyer groups oppose limits on what victims can receive.
Administration officials said they were trying to remain above the legislative battle, but the plan they endorsed
mirrors one championed by Assembly Majority Leader Joseph Roberts (D-Camden).
It would set up a state fund that could pay $150 million over the next five years to cover up to half the premium
increases faced by physicians in high-risk specialties such as obstetrics and neurosurgery. They would not
have to repay that money.
The Medical Society of New Jersey and key senators from both parties favor the bill to "cap" jury awards, which
passed the Senate 32-5 in March. Under that bill, doctors and their insurers would pay a malpractice
victim's full economic damages -- such as lost wages and medical bills -- and a maximum of $300,000 for pain and suffering.
Victims could collect an additional $700,000 from a state fund, but only if it had the money on
hand.
Each bill would raise the money for its fund through $50-a-year
assessments on lawyers and health care providers and a yearly tax on employers of $3 per employee.
At a Trenton news conference sponsored by Consumers for Civil Justice, Insurance Commissioner Holly Bakke
and Health Commissioner Clifton Lacy both endorsed the subsidy approach. They said that is the only way
to stop physicians faced with spiraling malpractice premiums from retiring early, leaving the state or dropping high-risk specialties.
"We can't have a situation where women can't find an obstetrician to deliver their child," Bakke said. "The idea of a
subsidy seems to me to be the most immediate solution to an immediate problem."
Reading a statement on Lacy's behalf, his spokeswoman, Donna Leusner, said: "Immediate steps such as premium subsidies for physicians must
be taken quickly to alleviate this problem while other longer-term remedial measures are implemented."
Gov. James E. McGreevey's press secretary, Micah Rasmussen, said: "Certainly the approach of immediate rate
relief is one we think needs to be pursued." But because the details of Roberts' plan are still being
drafted, Rasmussen said the administration was not endorsing that bill over the Senate version.
"We're trying very hard not to get sucked into one side of a battle that's been drawn," Rasmussen said.
Nonetheless, Roberts said he was "gratified and pleased" by the administration's support, adding that it "lays the
groundwork for reconciling the differences between the Senate and Assembly."
Key senators doubted that. Both Senate Co-President John Bennett (R-Monmouth) and Sen. Raymond Lesniak
(D-Union), the architect of the Senate version, said the upper house had already rejected subsidies for
physicians.
Bennett said that if the Assembly approves a subsidy bill, "then we'll amend it back and send it back to them and
tell them to do the right thing."
His Democratic counterpart in the evenly divided Senate, Co-President Richard Codey (D-Essex), said of the
administration's stance: "Hopefully it will make us somehow come to a meeting of the minds and meet in the
middle."
Mark Olesnicky, president of the Medical Society of New Jersey, said the group remains opposed to Roberts'
subsidy approach.
"It's basically a Band-Aid and it will do nothing. It's a short-term fix,"
Olesnicky said. "The true fix would happen with a reasonable cap on noneconomic damages."
Bakke said the merits of such caps should continue to be debated, but "they do not provide an immediate solution
to an immediate problem."
Robert Schwaneberg covers legal issues. He can be reached at rschwaneberg@starledger.com or (609) 989-0324.