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Rolling The Dice On Medical Malpractice Legislation
A new bill to cap claims has doctors, lawyers and insurance companies renewing
their age-old game of finger-pointing
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Business New Haven
3/3/2003
By: Melissa Nicefaro
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We hear about it often enough: A doctor operated on the wrong leg or performed a mastectomy on a healthy breast. Those are the extreme cases, but like anything else, there are two ends of the spectrum. In the case of medical malpractice, that spectrum comes full-circle.
Doctors, insurance companies and patients are all caught in the vicious cycle of malpractice and it doesn't appear as though anyone is winning the game.
According to Pennsylvania-based Jury Verdicts Research, jury awards in medical malpractice claims jumped 43 percent in one year from an average of $700,000 in 1999 to $1 million in 2000. In that same year, the settlement median in medical malpractice cases fell 16-percent from $592,074 in 1999 to $500,000 in 2000 and plaintiffs did lose the majority of their cases (62 percent) that went to a jury in 2000.
It is the jump in jury awards that have medical liability insurance companies (three of which do business in Connecticut) raising premiums to cover high plaintiff payouts. And it is the raising premiums that many Connecticut physicians blaming for their abandoned practices.
Denise Funk, CEO for Glastonbury based Connecticut Medical Insurance Co. (CMIC), says everyone is looking for the same end result: a fair system for compensating patients who may have been injured.
"Oftentimes there was no negligence, but something unfortunate happened. You want to be able to take into account that there was no fault, but in some cases, there may be a need to provide financial benefits to that person," Funk says.
CMIC was formed in 1984, during the last "malpractice crisis," when physicians were insured mostly by commercial insurance companies.
Because of the increase in rates at that time, the Connecticut State Medical Society decided to follow the example of other states who had organize their own insurance companies to provide professional liability insurance in order to gain more control.
The Medical Society received a charter from the legislature to form an insurance company, and set out for funding. Physicians who wanted to be insured by the company were required to capitalize the company. In addition to their premiums, they also have to pay the equivalent of one-year premium to raise capital.
"I was involved in the organization of the company and we raised $7 million from the physicians and were granted authorization to do business," Funk recalls.
"The principal benefit is that it's very efficient to run at a cost standpoint," Funk says. "And if there are any funds left after claims have been paid, dividends are paid. With losses increasing so dramatically in the past few years, there have been no dividends declared. Physicians who have had claims paid do not receive dividends."
"There is a dramatic increase in loss payments, which are requiring us and everyone to raise rates."
Depending on training and length of time paying a liability insurance premium, most OB/GYNs, for example, pay $50,000 a year for $2 million in coverage. This year, many of have dropped to $1 million in coverage to make it affordable at upwards of $80,000 or more.
"Not only has it doubled in price, we get half the protection," says Mark DeFrancesco, chairman of the state's chapter of the American College of Obstetrics and Gynecology. "You don't need a lot of cases at those kinds of numbers to bankrupt those insurance companies. We used to have 11 insurance companies in 1999. Now there are three and they're very selective, looking for squeaky-clean people."
DeFrancesco stopped delivering babies about two years ago. "It was in part because of the pressure and the cost of malpractice insurance." After 18-years and 3,000 babies delivered, his focus turned to lobbying and testifying on the profession.
Judith Faulkner, a Milford OB/GYN, says her malpractice insurance has increased in the past five years from $20,000 to $50,000.
"I've never been sued, so I'm paying huge premiums in the possibility that someone, someday may want to bring a suit. It gets to the point where it's tough to run a business with that huge chunk of overhead," Faulkner says.
"I love obstetrics, but there comes a point where you can't afford to do the business because of the premiums. My salary has gone down substantially in the past three years."
No one doubts that the system has gotten out of whack. "There's no question that there are people who are injured in the health-care system. It's not always negligence that causes it, but there are times they'll question negligence. Not all doctors are perfect and the system isn't perfect," DeFrancesco says.
Speaking for OB/GYNs across the state, he says: "We would like to see something develop that would compensate people with major injuries that would mean large amounts of money needed to help make things whole and right, regardless of negligence. We'd like to find some way of finding the doctors, particularly those doctors who are the root cause of the problem and have more than their share of problems. We need to identify them, rehabilitate, retrain or remove them."
A bill supported by New Haven State Sen. Toni Harp (D-10) would cap non-economic jury awards at $250,000. Non-economic awards include the "emotional" side of malpractice: pain and suffering, duress, etc. Lost wages, medical care, rehabilitation and adjustments made to one's home are considered economic damages, and would not be affected if the bill becomes law.
DeFrancesco says caps are a sensible interim step, but not the long-term answer to the looming crisis.
"It's at that non-economic side where things are out of control," Funk says. "Juries are asked to come up with a number without guidelines, depending on the emotional appeal of an individual."
DeFrancesco agrees. "There's got to be a better way to figure out where we want to go, and figure out how to get there," he says. "Where we should want to go, is to have people compensated, especially for negligently afflicted injuries and at the same time, figure out if there was negligence and how we prevent that from happening again."
"There's a disconnect between the legal system and the physician surveillance system and we'd be in favor of something that would take care of compensation right up front and get it out of the lawyers' pockets and get it out of a seven- or eight-year timeframe," DeFrancesco says.
That's all well and good, according to Cheshire attorney Stephen Jacques, who says: "One of the main reasons cases drag out for that long is because they are so vigorously defended by the insurance companies for these doctors and the lawyers that the insurance companies hire. If you try to get information from them so that you can get to the point and they can get to the point, and they won't admit the sun rises in the east."
"One of the other things insurance companies are not talking about is the extraordinary amounts of money they pay defense attorneys on an hourly basis to defend claims. This is for every single claim. I can have a case where a doctor went in and cut off the wrong leg, the most clear-cut act of negligence with serious injury that you could imagine. The case will go on for five years," Jacques says.
"I think we should consider some type of no-fault system for major expenses and major problems that would compensate people and help them with their problem faster, so you don't wait six- or seven-years for a court case. Then all the help would go to the family and nothing to somebody who is helping them fight their battles in court," DeFrancesco says.
According to Connecticut statutes, an attorney may receive a fee up to 33.33 percent of the first $300,000, 25 percent of the next $300,000, 20 percent of the next $300,000, 15 percent of the next $300,000, and ten percent of any amount which exceeds $1,200,000.
"Whenever there's a bad outcome, there's a long process of reviewing everything and finding every possible thing that could be twisted to look like a mistake so you can blame someone. That's the only way you can get money out of the system," DeFrancesco says.
Jacques counters: "There are relatively few extremely large verdicts. The gripes that the doctors have don't correlate with what the insurance company is putting out there."
He continues: "I sincerely don't think this [bill] is going to solve the problem. I believe there are legitimate arguments on both sides of this equation and there are legitimate problems that both sides, patients and doctors, have that should be remedied, but a medical malpractice cap is not going to solve the problem."
DeFrancesco recommends a committee or a panel of people looking at the physician to conclude, "This was something unavoidable, it could have happened to anybody. You did a good job and despite your judgment, this turned out badly," or "You've had a couple of these and you really made the wrong decision here. A reasonable doctor would not have done what you did, so we're going to have to retrain you or pull you out or something."
No physicians are above inspection and scrutiny, DeFrancesco says. "The system is perverted because now a bad outcome is like a lottery for some people and that's undermining the system. If you do enough deliveries, sooner or later you're going to have a bad outcome."
He adds, "The longer and more experienced you are, the more exposure you've had. Now doctors are saying we've lived with this for 20 years and can't take the pressure any more. They're saying, 'Even if I could afford the insurance, I just don't like living like this any more where every time I sit down, I'm worried about if this is the case that's going to ruin my family, my life and make me out to be the bad guy for the rest of my life.'"
DeFrancesco acknowledges that with 45,000 babies delivered in Connecticut every year, perfection is an unrealistic standard.
There's no possible way that every [delivery] can be perfect," he says. "The question is, how do you minimize mistakes and errors? Clinical judgment is one thing. What the system aims at is trying to find mistakes that people make that are preventable, errors."
Jacques says he recently turned down a "botched delivery" case involving a woman who suffered from incontinence after delivering twins. He questions claims that the majority of cases are frivolous.
"No lawyer in his right mind would take on a lawsuit that is frivolous. Nobody wants to get involved unless the case is a valid one. My firm takes about one in 30 cases that come through the door. The costs go into the tens of thousands of dollars and statistically, most of the cases are lost," Jacques says.
"There's quite a bit of medical malpractice going on that unless someone is catastrophically injured, no one will take the case."
He says insurance companies lost money on their investments and every time there is a downturn in the economy, there's a tort reform crisis, there's an insurance crisis.
"This is becoming a major mistake in which lawyers are being demonized again and victims' rights are going to be curtailed because insurance companies have made inappropriate decisions with their investment portfolios."
The crisis is real, according to DeFrancesco. Of the roughly 500 practicing OB/GYNs in Connecticut, close to 40 have recently stopped practicing obstetrics or say they plan to cease practicing in the near future, directly because of high costs in liability insurance premiums.
"It's not like they're saying, 'I'm sick and tired of this and I'll show you,'" DeFrancesco says. "These are people who either really can't afford this, or can't even get insurance. They're good doctors. Access is becoming an issue more and more.
"The sad thing is if you look at actual negligence, and you compare that to court cases, there is no relationship between negligence and courtroom verdicts or outcomes. The wrong people are getting sued," he says.
"That's the other advantage to a no-fault approach: that if we just say under these defined conditions you get an automatic look-see and maybe get you some compensation that you need to help keep you whole, and we can look at the doctors. If they really are negligent people, we want to get rid of them."
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