MALPRACTICE IS THE PROBLEM,
NOT JUST THE COST OF MALPRACTICE INSURANCE
By Maryann Napoli
(February 2003)

We are in the grip of a malpractice insurance crisis because doctors have threatened to strike, relocate, stop performing risky procedures, or increase their patient load. If you believe the media reports, the cause is "skyrocketing insurance premiums." Pregnant women are unable to find an obstetrician, and some areas of the country will be left without any surgeons. The cost of insurance premiums is rising, we are told, as a result of astronomical malpractice awards, many of them frivolous. The only solution is to put a cap on these awards. The double-digit health insurance inflation will be controlled once state legislators and Congress pass laws putting limits on awards for pain and suffering.

That's pretty much the scenario conveyed by the media whenever a malpractice insurance crisis resurfaces every five to ten years. Somehow the crucial issue of malpractice itself and ways to reduce injuries to patients rarely seem to enter the story. The crisis is always going to be solved by limiting the amount of money the injured person can receive. This is what passes for tort reform. Yet the last time a major study looked at malpractice, it found that the majority of people who were victims of malpractice did not sue, and of those who did go to trial, most lost their cases.

Interestingly, the dramatic increases in insurance premiums have nothing to do with the number of lawsuits or the relatively rare multi-million dollar malpractice awards. Like most of the country, the insurance industry lost money investing in the stock market, and the increased cost of premiums is intended to make up for it. Some insurance companies lost money because they did a poor job predicting future claims and made mistakes in setting prices for their policies. Moreover, federal government statistics show that the number of malpractice judgments has not risen nearly as fast as the premiums doctors are expected to pay.

Surgeons and obstetricians are in for the largest increases because they tend to get sued most often. In some areas of the country, they have fought back by withholding services, and now a physician financial crisis becomes a public health crisis once people are denied elective surgery or sent out of state for critical care.

The malpractice insurance debate centers not on compensatory damages but on the money awarded to people for pain and suffering. This has traditionally been a way to equalize the inherent unfairness in a legal system that bases the amount of compensatory damages on lost earnings, as well as medical costs. A malpractice-related death of an 80-year-old, a low-wage worker, or an infant are examples of cases that would automatically result in low compensatory damages. The pain and suffering award is used to level the playing field.

Last month, President George W. Bush proposed, "frivolous lawsuits be curbed with a $250,000 limit on pain and suffering awards by juries in cases that go to trial." Though the President contends that he is concerned about pregnant women and poor people without access to physicians, his position clearly mirrors that of the insurance industry and physicians.

The repeated use of the word frivolous in conjunction with malpractice lawsuits misrepresents the situation. In a recent letter to the editor of The New York Times, law professor Stephen Gillers wrote, "The president would put a $250,000 cap on a patient's damages for pain and suffering. But if a patient is entitled to any compensation for pain and suffering, her claim is by definition not frivolous. Frivolous claims are thrown out of court." Furthermore, many states have had a requirement to pay for an independent review of the case to determine whether there is good reason to even initiate a malpractice lawsuit.

Early last year, the American Medical Association identified New York as one of several states where the medical malpractice situation was considered to be a crisis. The Medical Society of New York State organized public protests against what it called an out-of-control medical liability system and warned that New Yorkers, especially pregnant women, would lose access to physicians. The culprit: "skyrocketing premiums."

With several other advocacy organizations, the Center for Medical Consumers looked into the allegations and found that organized medicine had launched a campaign of deception. Despite all the hype, there was no significant increase in medical malpractice premiums last year or in the number of medical malpractice lawsuits. Even the scare tactic of high premiums leading to a loss of physicians didn't pan out. New York State physicians have been paying the highest malpractice insurance premiums for years, yet it has the second highest number of physicians per capita of any other state.

We also found that-during the 1990s-a large percentage of malpractice payments were made on behalf of a small number of physicians and nearly 90 percent of New York physicians had never made a malpractice payment. Here is where organized medicine has completely dropped the ball, despite protestations that it is acting on behalf of patients.

The American Medical Association and other medical trade associations have effectively killed the Institute of Medicine's 1999 recommendation for a mandated reporting system for serious medical errors, which would be made available to the public. Furthermore, the IOM recommended that a system be created for periodic re-certification of physicians to assure that they keep their skills and information up-to-date. This is also opposed by organized medicine.
Once it was determined that a few physicians account for most of the malpractice claims in New York State, we supported legislation that would require the State Health Department to review these claims as an obvious way to identify problem physicians. Health care providers should tell the patient or the family members when they make a mistake that causes serious harm. This is a requirement of the physicians' own code of ethics.

But organized medicine continues to oppose the most basic reforms that might prevent injury. Isn't it time to ask why Congress and state legislatures are stampeding to adopt "tort-reforms" rather than embarking on a national effort to improve patient safety?

For More Information

-The New York State Malpractice Report is available at our web site (www.medicalconsumers.org).

-Each year between 44,000 and 98,000 Americans die as a result of medical errors, according to the Institute of Medicine. Read the IOM recommendations in its 1999 report entitled To Err is Human: Building a Safer Health System (www.nap.edu/books/0309068371/html). The report can be purchased in paperback from the National Academy Press, Washington, DC.