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Press Release

    Medical Malpractice Legislation And Consumer Impact: Is there a doctor in the county?

    02/19/2003

    Goal: To make high quality, affordable healthcare more widely available.

    Our goal is for Texans to have access to quality, affordable health care.

    We all recognize the need for those truly injured to be compensated and for bad players to not just be punished but to be weeded out. We also share in our desire that the injured patients get quicker compensation for their "economic losses."

    In this litigious society, how can we provide quality, affordable health care that is available to all citizens? Today, we are pricing consumers out of the marketplace and sending doctors out of the state. The result is consumers don’t have access to doctors and hospitals in a growing number of counties and localities.

    Availability:

    With liability insurance premiums for Texas physicians increasing by 200% or more in the past three years, professionals are either leaving the profession or are limiting their practices. This has left some areas of Texas underserved or totally without healthcare providers.

    As our medically underserved areas of the state are often rural residents – particularly pregnant women and Medicaid patients – are the most vulnerable.

    Since Texas doctors are two times as likely to be sued as their counterparts across the country, and the TMA survey shows that more than half the physicians who responded are considering early retirement because of the state’s medical liability problems, it is clear that this problem is impacting not only rural and South Texas, but is impacting healthcare delivery across the state.

    According to a recent Harris poll, 87% of all physicians say that their concern about the risks of malpractice liability has increased since they began their careers. It also found that 54% of physicians are so afraid of being sued that they would hesitate or are reluctant to help an injured person when they are off-duty. In parts of Texas, there may well be no doctor in the house.

    Personal Injury Trial lawyers:

    We can all remember a time when we didn’t see lawyers advertising for business every time we turn on our televisions, and didn’t see their ads on billboards “have you been injured?”

    Trial lawyers argue that the threat of lawsuits promotes better care and assures accountability. But those incentives are aligned only when the legal system reliably distinguishes between good care and bad care.

    Justice today, studies show, is worse than random. Most errors go uncompensated; but 80% of lawsuits do not involve any negligence at all. Juries often let off the hook a doctor who made a mistake; but one in four cases results in payments where experts believe the doctor did nothing wrong. Lawsuits go on for years, with the truth obscured by technical jargon and experts-for-hire, a nightmare both for those injured by malpractice and for physicians unfairly charged.

    In the final analysis, we need to make sure that the liability system serves patients and not just trial lawyers.

    What’s happening in Texas? Medical malpractice lawsuits are increasing dramatically. According to the Texas Insurance Commission, the number of health care liability claims being filed in Texas is doubling every five (5) years.

    Do these lawsuits make health care safer? The answer is “no”.

    Quality:

    According to the July 2002 the US Health & Human Services issued a report “Confronting the New Health Care Crisis: Improving Health Care Quality & Lowering Costs by Fixing Our Medical Liability System” lawsuits don’t make medicine safer or better. “The malpractice system does not accurately identify negligence, deter bad conduct, or provide justice. The results it obtains are unpredictable, even random…”The evidence is growing that there is a poor correlation between injuries caused by negligent medical treatment and malpractice litigation.”

    Pervasive distrust and concern that they will be sued has health care providers running for cover and impairs the quality of all our care. Candid give-and-take among professionals, vital to good health care, is chilled by fears that anything said might be used later in court. Innovation is stifled because of fear of the legal consequences of anything new and uncertain. Perhaps worst, legal fear places barriers between caregiver and patient in situations when what's needed most is human empathy.

    To improve quality, health care providers want to be able to develop patient information, tracking how care is delivered and the outcomes, and sharing what they learn. However, according to the HHS, doctors are reluctant to collect quality-related information and work together to act on it for fear it will be used against them in a lawsuit. Though many of us have concern over medical records being shared, health care providers report perhaps as many as 95% of adverse events are believed to go unreported due to fear of lawsuits.

    Even the Institute of Medicine (IOM) has reported that fear the information which is needed to improve patient safety is not gathered for fear it will be used to prepare a lawsuit against them, even if they are not negligent. This fear, understandable in the current litigation climate, impedes quality improvement efforts – and many experts say it is the #1 barrier to more effective quality improvement.

    The IMO reports the focus must shift from blaming individuals for past errors to a focus on preventing future errors by designing safety into the system.

    Affordability:

    The 2002 the US HHS report cited earlier said curbing excessive litigation as a critical element for making coverage more affordable, expanding Medicaid and CHIP coverage for lower-income persons, and health insurance credits for persons who do not have access to employer or public health insurance.

    Indirect costs are also part of the cost as defensive medicine both increases patients’ risks and adds costs.

    Litigation costs are borne by every American. Malpractice insurance premiums raise health care costs. (Doctors in the US spent $6.3 billion last year alone – hospitals and nursing homes spent billions more).

    We all pay through higher premiums, higher out of pocket payments and higher taxes.

    According to HHS, if reasonable limits were placed on non-economic damages to reduce just defensive medicine, it would reduce the amount of taxpayers’ money the Fed Gov’t spends by $25.3-44.3 billion per year. This could fund prescription drug programs and help uninsured Americans obtain coverage through a refundable health credit.

    How are victims compensated? Are these awards helping victims?

    Most victims of medical error do not file a claim, according to the HHS study – only 1.54% who were injured by medical negligence even filed a claim. Most claims – 70-75% – result in no payment to the patient. One study found that only 8-14% of the cases filed went to trial, and only 1.2 to 1.9% resulted in a decision for the plaintiff. However, it costs an average of $24,669 to defend each claim.

    It is the few cases that result in huge jury awards that encourage lawyers and plaintiffs in the hope they can win this litigation lottery, and they influence every settlement that is entered into. And much of these judgments are not awards for economic damages, but for non-economic damages.

    This isn’t a democratic process.

    The system gives s a blank check to juries to award potentially huge damages based on sympathy, attractiveness of the plaintiff, and the plaintiff’s socio-economic status (educated, attractive patients recover more than others.)

    These decisions are subjective and without any standards. Yet we all pay – we pay in higher heath care costs, higher health insurance premiums, higher taxes, and reduced access to quality care.

    And the trends are not going our way. The average award rose 76% from 1996 to 1999; and between 1999 and 2000, medial malpractice awards increased nearly 43%.

    The medical malpractice crisis is real, and it is beginning to hurt American healthcare consumers. It has been a long time coming and will need a long-term, not a short-term solution. Insurance is not magic: As long as there are unlimited jury awards, insurance premiums will need to increase to pay for them.

    But the debate rages on, as the trial lawyers try to protect the current “lawsuit lottery” system that we have, where 70% of all medical malpractice claims filed are resolved without a single cent paid to the plaintiff. In those cases that do go to trial, judges and juries find 80% of them to be meritless, and there is no payment made.

    What does common sense tell us? The personal injury trial lawyers don’t have to win very often, because when they do win, they win big.

    Budget Impacts:

    Enhancing the availability, affordability and quality of healthcare in Texas are reason enough to act now. However, another compelling reason is the impact on the Texas budget, economy and family pocketbooks.

    A 1998 California study showed that increasing the cap set there would increase the cost of health care and health care liability premiums significantly. The study showed that higher malpractice premiums and health care costs would diminish the viability of community hospitals by requiring larger portions of their budgets to be devoted to liability claims, placing a greater burden on local governments and taxpayers.

    One compelling document is from the Congressional Budget Office (CBO,) which provides the cost estimate of federal legislation, H.R. 4600. H.R. 4600 was written to impose limits on medical malpractice litigation in state and federal courts by capping awards and attorney fees, reduce the statute of limitations, eliminate joint and several liability, and change the way collateral-source benefits are treated.

    The CBO reports that those changes would lower the cost of malpractice insurance for physicians, hospitals, and other health care providers and organizations. That reduction in insurance costs would, in turn, lead to lower charges for services and in health insurance premiums.

    But the additional benefit the CBO outlined was that medical malpractice reform would increase federal revenues by $40 million in 2003 and by $2.4 billion over the 2003-2012 period. It would also reduce federal direct spending for Medicare, Medicaid and the government’s share of premiums for the federal employees health program.

    CBO estimates that spending would decline (savings would be realized by) $11.3 billion over 2004-2012. Additionally, discretionary spending would be reduced by $400 million over that period (since the FEHB program comes out of federal agencies budgets.)

    Bottom line: The CBO estimates that under the federal bill, premiums for medical malpractice insurance ultimately would be an average of 25-30% below what they would be under current law, and it also would lower the price employers, state and local governments and individuals pay for health insurance.

    It is clear those savings outlined by the CBO would tell us that passage of HB 3 would also have positive fiscal impact on the Texas budget and economy.

    Summary:

    In the final analysis, medical malpractice insurance rates are driving doctors out of the practice of medicine, particularly some specialties; thereby limiting availability of health care and escalating the cost without enhancing its quality or safety.

    The medical malpractice crisis is real, and it is beginning to hurt American healthcare consumers. It has been a long time coming, and will need a long-term – not a short-term – solution.

    Insurance is not magic: As long as there are unlimited jury awards, insurance premiums will need to increase to pay for them.

    It is time to protect consumers from these abuses.

    The reference to “pain and suffering” doesn’t apply only to the plaintiff – all consumers are suffering from abuses of medical malpractice liability.