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The Doctor is Out?
In the latest battle of the malpractice insurance war, physcians seek to overturn pain and sufferring awards.
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Business New Haven
5/12/2003
By: Michael C. Bingham
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There's nothing subtle about the advertising and public relations campaign: Jury awards in medical malpractice lawsuits are out of control in Connecticut. If we don't do something, your doctor will have to quit practicing medicine. Maybe all doctors will have to quit practicing medicine.
That's the message physicians are communicating these days in Connecticut as they undertake a full-scale lobbying and PR offensive designed to persuade lawmakers to place a $250,000 cap on awards for "pain and suffering" - that is, non-financial losses - as a result of medical malpractice.
There are two components of malpractice: medical and economic damages, for which history and precedent help to guide courts in defining awards; and so-called pain and suffering, the definition of which can be much more subjective.
With pain and suffering awards by juries continuing to escalate, the American Medical Association has designated Connecticut one of 18 states "in crisis," according to physician Charles Littlejohn, vice president of the Fairfield County Medical Association (FCMA).
Indeed, one important group riding shotgun on the doctors' behalf is the FCMA, which hosted an April 28 media breakfast at the Norwalk Inn to argue their case. The title of the conclave: "The Medical Liability Crisis in Connecticut: Why Is Reform Urgently Needed?"
To make their case, the FCMA enlisted the influence of several non-medical professionals, including Paul Timpanelli, president and CEO of the Bridgeport Regional Business Council, and U.S. Rep. Christopher Shays (R-4).
"By and large, the people who get pain-and-suffering awards are [plaintiffs'] lawyers - they get one-third," said Shays. "On average, only 40 percent of [award] dollars go to the injured party."
What's at stake? Skyrocketing awards by juries to plaintiffs in successful malpractice actions. According to David Burke of the Connecticut Medical Insurance Co. (CMIC), one of just three malpractice underwriters still doing business in the state (down from eight only two years ago), in 1997 his company paid an average indemnity of $250,000 in malpractice cases. Five years later, he said, that figure was approaching $500,000.
Similarly, CMIC saw its "loss payments" swell from $19.5 million in 1995 to $50.3 million in 2001.
Naturally, plaintiffs' lawyers vigorously oppose any attempt to place an arbitrary or artificial cap on something as fundamentally unquantifiable as "pain and suffering."
"First of all, [capping pain and suffering awards] guarantees that all but the most horrendous cases will be tried, further clogging the courts," asserts New Haven attorney Ivan M. Katz.
"Second, it discriminates against the very young and the very old," he says. That's because lost earnings and lost earning capacity are non-factors for those at the opposite ands of the age spectrum. Therefore "pain and suffering" are sometimes the only grounds on which they can be awarded compensation.
"The elderly are retired and have no earning capacity," Katz says. "The very young have no earnings track record by definition."
The financial hit insurance companies feel, naturally, is passed down from the carrier to the physicians in the form of higher premiums. How much higher? According to an FCMA survey of member physicians, Connecticut M.D.s spent $6.3 million on malpractice insurance in 2001 (the most recent year for which figures are available).
For some, the financial burden approaches the hypothetical "tipping point" beyond which the financial and psychic rewards of practicing medicine fail to keep pace with the risks.
Stamford's Richard Viscarello is a perinatologist specializing in high-risk pregnancies.
Last summer, Viscarello says, his insurance carrier announced that it was leaving the Connecticut market and would therefore terminate his coverage. Of the three remaining carriers, two wanted nothing to do with his relatively high-risk specialty. The third offered to cover him for malpractice - for $343,000 a year.
"In this environment," says Viscarello, "it's a battle just to survive."
Reform opponents point out that capping pain and suffering itself does nothing to guarantee that insurance rates will be lowered. The CMIC's Burke acknowledges that a $250,000 limit would likely not impact malpractice insurance rates in the near term, although "you would certainly see a stabilizing effect on the market over time."
To the FCMA and other physicians groups, effecting fundamental change in the rules of the insurance game may depend on their ability to portray it as a crisis for needy patients, not fat-cat doctors.
"The ability to receive medical attention is deteriorating in Fairfield County because of the medical liability (malpractice) insurance crisis," says the FCMA's most recent report on the issue.
Specifically, according to the survey, 26 percent of responding physicians have limited the scope of their practice in some fashion - curtailing higher-risk procedures for example.
"That means over one-quarter of the physician population in Fairfield County no longer performs high-risk procedures or surgery," says FCMA President Frank Scifo. "This is a terrible situation for patients because it means many of them will have to travel outside of their community to receive medical care."
But excessive physician caution or risk-aversion can paradoxically drive per-patient costs up. In the 2003 FCMA survey, 56 percent of responding M.D.s said they had increased the number and/or frequency of tests ordered to avoid being sued - an expensive example of defensive medicine.
According to Eleanor Seiler, senior medical director of Anthem Blue Cross & Blue Shield of Connecticut, more than 80 percent of Connecticut doctors say they have ordered more tests, and 74 percent have referred patients to specialists, more often than they would have otherwise based on their professional judgment alone.
Still other physicians have elected to avoid procedures with complications or high risk. Some even question whether they want to practice medicine at all. "I am looking for alternate career options," one doctor told the FCMA. Said another, "I would like to get out of this 'business.'"
And for businesses of all kinds, the malpractice mess is a key issue because of its trickle-down impact on their own health-insurance premiums - and, by extension, their ability to attract top-drawer employees by offering them generous benefits packages.
Explains the Bridgeport Regional Business Council's Timpanelli: "We have come to the conclusion that this issue is primary on the minds of business people." To prove it, he noted that the BRBC board of directors voted last month to support legislation capping non-economic damages in malpractice cases.
Whether helping to accomplish that will ultimately make health insurance more affordable to companies - and, ultimately, more accessible and available to their workers - is something no one to date has been able to demonstrate the answer to.
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