March 21, 2011
9:14 am
The state of New York is taking center stage in the effort to determine whether this country can bring much-needed improvements to our flawed medical liability system.
The state’s governor, Andrew Cuomo, is proposing a $250,000 cap on non-economic damages in medical liability cases. The idea emerged from the governor’s Medicaid reform task force, which also proposed an indemnity fund for brain-damaged infants.
Some may be surprised that a state with strong Democratic leanings would be proposing a serious tort reform measure, but New York has strong motivation to do so. The state’s Medicaid program is in a state of crisis, with projections showing that it will account for over half of New York’s budget by 2020. The governor’s medical liability recommendations would bring $700 million in Medicaid savings.
Plus, malpractice insurance rates in New York are unacceptably high. New York hospitals are paying more than $1.5 billion in combined litigation-related expenses and soaring premiums threaten to make specialists like obstetricians and neurologists hard to find for New York patients.
This will be a gloves-off political brawl. The American Medical Association has backed the governor’s measure. The state’s trial bar association vigorously opposes it. Republicans control the state Senate and have backed the liability reform proposal. The Democratically-controlled state assembly has already dismissed the non-economic damages cap.
Let’s hope Governor Cuomo stands firm for his proposal. New York and the nation need this important and essential progress.
February 18, 2011
12:00 pm
Some more interesting information has come to light on the issue of medical liability reform.
At the annual meeting this week of the American Academy of Orthopedic Surgeons, a new study was released that helps us better understand the extent to which medical professionals order unnecessary tests and procedures as protection against possible litigation.
There have, of course, been studies in the past based upon physician surveys. In this case, though, over 70 orthopedic surgeons in Pennsylvania were asked to track, over an extended period of time, whether an action was taken because it was for essential clinical care or if was a case of practicing defensive medicine.
As the Associated Press reported, the study showed that one in every five tests is ordered for defensive reasons and 35 percent of all costs can be attributed to defensive medicine.
Given mounting data like this, it’s no wonder that the House Judiciary Committee is moving rapidly to mark up liability reform legislation and the President’s proposed budget calls for “a more aggressive effort to reform our medical malpractice system.”
February 11, 2011
10:24 am
As the House Judiciary Committee works toward the passage of medical liability reform legislation, the nation’s trial lawyers – who, of course, have the most to lose if tort reform becomes law – are stressing the counterintuitive argument that states which have enacted liability reform actually have higher healthcare costs.
The trial attorneys’ association, the American Association for Justice, has issued a primer on the issue in which it uses Texas as its prime example of health costs increasing even when strict limits on non-economic damages in medical liability cases have been put into effect. The AAJ wrote:
“If doctors feel they need to practice “defensively” and order extra tests to avoid the liability, and if all this defensive medicine results in excess health care costs, then states that have already limited liability for doctors through tort reform should experience significantly lower health care costs than states that do not limit liability. Texas has some of the strictest caps in the country, which should eliminate any need to practice “defensively,” thereby lowering health care costs in the state. Yet Texas has some of the highest health care costs in the country. Health care costs in McAllen, Texas, have been growing at a faster rate than any other area in the country, and the cost of health care per patient is currently second highest in the nation.”
I suspect the good men and women of the trial bar are aware that they are freely mingling apples and oranges here. Texas’ healthcare costs are driven by the fact that the state has one of the nation’s highest uninsured populations, meaning that a comparatively higher percentage of patients are receiving their healthcare through emergency rooms.
And as for the McAllen, Texas reference, the American Association for Justice should read the Atul Gawande article in the New Yorker that documented the McAllen situation, which involves Medicare billing practices and has no linkage to the state’s liability laws.
The medical liability reform is an important one and deserves a serious discussion. Turning logic on its head to make a point doesn’t contribute to the dialogue.
January 28, 2011
10:23 am
Medical liability reform is one of those causes that, up to now, has seemed a political impossibility at the federal level. Even in years when Republicans controlled both the U.S. Senate and House, tort reform advocates couldn’t muster sufficient votes to get legislation passed. A number of states have enacted reform measures, but Congress – encouraged by strong lobbying from the nation’s trial attorneys – has stubbornly refused to rein in even the most meritless lawsuits.
Now, though, we’re seeing a number of actions taking place that indicate there may be an opening to get something done on liability reform. Among them:
• President Obama made it a point to mention medical liability reform in his State of the Union speech.
• The President’s deficit reduction commission has cited comprehensive liability reform as a recommended action to contain healthcare costs.
• Medical liability reform legislation has just been introduced in the House of Representatives, and it has bipartisan sponsorship.
• There is increasing interest in innovative measures such as tying liability protections to usage of health information technology and evidence-based medicine.
There are compelling reasons for Congress to move on this issue. We have to be concerned about having a sufficient supply of physicians to serve an insured patient population that will increase as a result of health reform. In many states, the liability climate forces physicians into early retirement. We’re concerned about making our healthcare system more cost efficient, and yet the current liability system forces the expenditure of dollars in ways that don’t benefit patients. President Obama’s right. It’s time to make progress on this issue.
November 16, 2010
2:21 pm
An interesting and disturbing article appeared in the New York Times yesterday. The Times and the Center for Public Integrity collaborated on an investigative piece explaining how large banks, hedge funds and private financiers are investing in lawsuits, funneling dollars into litigation – including medical liability suits – they find promising in exchange for a piece of whatever lucrative payout emerges.
There’s something very unseemly about this, gambling on whether human misery may generate a generous financial reward. But, beyond the distastefulness of it, this practice leads to a public policy question. Is the public interest served by encouragement, through private third-party financing, of litigation?
This is a thorny question. On one hand, would it be right to deprive a plaintiff and his or her legal team of the resources they need to hire investigators and expert witnesses in order to gain a fair judgment? But, on the other, as the Times and the Center for Public Integrity report, “borrowed money is also fueling abuses, including cases initiated and controlled by investors.”
As imperfect as it may be, current practices in litigation act as something of a check within the system. Because personal injury attorneys work on a contingency fee basis and front the trial expenses themselves, they’re more reluctant to take a case that is completely without merit. (Again, this is an imperfect system, given that 65 percent of claims are dropped or dismissed.) Having available investor financing increases the likelihood that an attorney will press a case as far as possible, thus further clogging already-overstuffed court dockets.
The Times article also points out that there are no legal requirements for attorneys to tell their clients about investor involvement in their cases, thus a client would have no awareness that a financial institution or a well-heeled investor may have a voice in the strategies and ultimate settlement of their claim.
As the Institute for Legal Reform, an arm of the U.S. Chamber of Commerce, pointed out, “the root problem with third-party funding is that it introduces a stranger to the attorney-client relationship whose sole interest is a financial one.”
Many state courts and legislatures have refused to enact any kind of barriers or prohibitions against investments in lawsuits but, given this new visibility, I would expect more attention to be given to this issue.
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