Day on Torts

The Chamber of Commerce does an annual ranking of the "lawsuit climate" in the fifty states.  The winning state - Deleware - has the most pro-business climate.  The losing state - West Virginia - has the most anti-business climate.  How are the rankings determined?  By a "sample of in-house general counsel or other senior corporate litigators to explore how reasonable and balanced the tort liability system is perceived to be by U.S. business."

Tennessee is ranked 22nd, down (or is that up?) from 6th last year. 

That's interesting, when one considers that there have been virtually no changes - and certainly no dramatic changes - in  Tennessee's substantive law in the previous year.  And the judiciary is 95 percent the same.  Perhaps Tennessee moved lower because other states moved higher.

Or perhaps the rankings have nothing to do with reality at all.

Here are the survey results for Tennessee. 

Here is the full report.

Here is a complete copy of the survey.

Here is the Wikipedia site for Kool-Aid.

Tennessee ranks 12th of the 50 states on the U.S. Tort Liability Index.   The list measures the  tort climate from the standpoint of the business and insurance community, so a rank of "1" is a pro-business, pro-insurance company state and a rank of "50" is that dark, dreary place inhabited by jurors who are anti-gun, anti-life, pro-child pornography, tree-hugging communists  (hereinafter referred to as "liberals") and the greedy, scum-sucking trial lawyers who love and manipulate them.

North Dakota ranks first.  Florida ranks fiftieth.    North Carolina, Virginia, and Mississippi each have a higher rank than Tennessee; the other southern states rank lower.

In terms of "litigation risks"  Tennessee has the best pro-industry ranking in the country (doesn't that give you a warm, fuzzy feeling?).

Tennessee was one of five states earning "saint" status.  What is a saint state?  It is a state that has "relatively low monetary tort losses and/or few litigation risks and relatively strong tort rules on the books. These states are well positioned to contain their tort liability costs in the future if the rules are implemented as written."

Want to read the entire report?  Here it is.

Now,  one might expect that the nursing home industry would ask for the withdrawl of  the pending legislation to limit the responsibility of nursing homes after they kill or injure their residents  now that it has learned that  Tennessee is ranked in the top quarter as a pro-defendant state.

Yea, right.      

Governor  Bredesen gave his State of the State address last night .  He did not say that he had any desire to limit the right to trial by jury for any citizen against any defendant in any industry.

This comment scares the nursing homes:  "My job is to open more doors to alternatives here in Tennessee. If you want to stay in your home, if it makes sense to do so, this is the year we’re going to start making it easier."  Tennessee spends about $1B per year of its Medicaid money on nursing home care; even a 10% shift will have an impact on the cash flow on the facilities.

The facilities always argue that they lose money on Medicaid patients.  Not true.  It is true that Medicaid payments may not always cover the average cost of keeping a patient in a nursing home.  The government's goal, however, is for the payments to cover the marginal costs associated with keeping the Medicaid patients in the facilities and the payments usually do so.

This study in PLoS Medicine reports that, based on estimates from publicly available data, drug manufacturers probably spend more money on advertising than they do for research and development.

In the words of the study:   "From this new estimate, it appears that pharmaceutical companies spend almost twice as much on promotion as they do on R&D. These numbers clearly show how promotion predominates over R&D in the pharmaceutical industry, contrary to the industry's claim. While the amount spent on promotion is not in itself a confirmation of Kefauver's depiction of the pharmaceutical industry, it confirms the public image of a marketing-driven industry and provides an important argument to petition in favor of transforming the workings of the industry in the direction of more research and less promotion."

This study makes it clear that it is using estimates to reach its conclusions.  The manufacturers don't report this data, so the authors had to take the limited available information and do what they could.  Obviously, they could be wrong.

So, why bring this to your attention?  We all remember a time when hospital ads did not appear on every seventh billboard and drug companies were absent from the print media and television.  The substance of ads from hospitals can be used in malpractice cases against those hospitals.   So to the drug company ads - and they can also be used to attack the outdated learned intermediary doctrine.  Finally, as the health and drug industries continue their assault the civil justice system on the grounds that financial responsibility is affecting their ability to offer new services and products, it is fair to demand answers to the questions of how they spend their money.   Is the public really being served by drug ads? 

Now, before I get attacked for being a socialist, let me add that I don't care how much money the drug companies spend on ads.  That is between them and their shareholders, and so long as the ads are not unfair or misleading and otherwise comply with the regulations, I don't care whether they advertise or not.  What I do care about it the effort by the industry to say that they can't afford to develop drugs because of product liability suits at the same time they appear to be spending billions of dollars to sell drugs - when they secured more than adequate profits for decades before they started advertising.  If the drug companies want special protection from lawsuits, then they should be required to disclose what they spend to sell drugs and how they spend it.  That way, legislatures can make a choice about whether  it is in the public interest to grant legal protections to the drug industry and preserve its choice to spend its money on Madison Avenue rather than in a laboratory in New Jersey.

Once again, the DC Medical Malpractice Law Blog informed me of the existence of this article.

We are hearing it again this year:  doctors are leaving the state because we don't have caps on damages in medical malpractice cases.  When pressed for evidence on this point,  a doctor will refer to "some guy in Memphis" or "some woman in Knoxville" who quit practicing medicine because of the risk of being sued.

Set aside the fact that the risk of being sued exists whether there are damage caps or not.  Are doctors leaving the state?

Well, consider this.  In 1975, at the time of the first medical malpractice crisis, Tennessee had 11.3 doctors of medicine in patient care for every 10,000 residents.

As of 2005, the number jumped to 24.1 for every 10,000 residents.

That's right, the number of doctors per Tennessean has increase by about 120% in the last thirty years.

And how does that compare with the nation as a whole?  For once, Tennessee is above the national average of 23.8 doctors for every 10,000 residents.

But there are more doctors in states that have caps on damages, right?  I mean, that's where doctors want to live, right? 

The facts in some "caps" states:

Mississippi - 16.5 per 10,000

Texas - 19.4 per 10,000

Missouri - 21.5 per 10,000

North Dakota 22.3 per 10,000

Colorado - 23.6  per 10,000

Louisana - 23.2 per 10,000

California - 23.3 per 10,000

You see, I think doctors think about about factors in selecting a place to live than just the risk of being sued.  They think about climate, location of family, familiarity, income opportunties, quality of life and all the things most other people think about if they are fortunate enough to select where they want to live.

Source:  Health, United States, 2007 as published by the CDC.  Go to PDF page 372.

Here is an interesting article from the LA Times that discusses the cost of caps.

An Illinois trial judge has declared that caps on certain medical malpractice cases imposed by the Illinois Legislature violate the rights of medical malpractice victims.

Read more here.

A new report issued by the Tennessee Department of Commerce and Insurance re-affirms what everyone in the state knows:  further restrictions on patient rights are not necessary in Tennessee.

The doctors (and occasionally the hospitals) have beat the tort reform drum for over thirty years, seeking further restrictions on the rights on patients to bring malpractice claims.  They launched an attack on Justice Holder's re-election effort.  They write op-ed pieces, talk to their patients, spend hundreds of thousands of dollars on political contributions each legislative cycle, and employ more and more lobbyists - all to get the Legislature to give them even more special treatment in the courtroom.

The legislative effort has failed to date, but the jury pool has been contaminated.  Those of us who handle medical malpractice cases know this from our experience, but a new report from the Department confirms that experience.

The numbers:

Total judgments    

2004           6       

2005           5

2006           6               

Total settlements                     

2004         444

2005         461

2006         453

Cases Dismissed   With No Payment

2004        1916

2005        2361

2006        2514           

Total settlement $                

2004   $108,000,000

2005    $119,000,000

2006   $100,000,000

Total judgment $              

2004   $1,950,00

2005    $6,100,00

2006     $4,950,000

(Dollar values rounded) (I originally had a beautiful table to display these numbers but my software will not let me publish in table format.  'Sorry about that.

There were two jury verdicts over $1,000,000 in medical malpractice cases in 2006.  One verdict was $8630.

The average settlement was $221,000 in 2006;  in 2005 it was $258,000.

This report sends one other message:  statistics like these are absolutely essential to having an informed discussion about the need for any sort of litigation reform.  The law that mandates the reporting of this information is due to expire in one year.  The law needs to be extended so that the public can continue to have access to this important information.

Here is a copy of the full report.

I think you will enjoy this article from the on-line version of the Fayetteville, North Carolina newspaper.   A few excerpts:

"Annual statements of Medical Mutual Insurance Co. of North Carolina filed with the N.C. Department of Insurance from 2001 through 2006 were studied and evaluated by former Missouri Insurance Commissioner Jay Angoff and some of his findings are:

Underwriting gain — the amount they earned on their insurance business — was up by 948 percent in only two years, from $2.1 million in 2004 to $22 million in 2006.

The surplus they hold, in addition to the amount which they set aside to pay claims in the future, nearly quadrupled in six years, rising from $35.3 million in 2001 to $127 million in 2006. Despite the surplus, no dividends were paid to their policyholders (physicians) in any year throughout the period 2001-2006.

They increased rates for physicians in 2006 even though their own data indicated that both the size and frequency of claims were decreasing. From 2001 through 2006, they collected $621 million in premiums and paid out only $184 million in claims.

We will not have data about SVMIC until the Spring of 2008, but my guess is that we will see a decrease in both the number of claims and the average claim payment again. 

Thanks to the folks at Tort Deform for letting me know about this article.

The people opposed to the efforts to restrict the right to trial by jury in personal injury and wrongful death cases are fighting back - this time with a video on YouTube.

Watch it here.

Good news for all concerned.  SVMIC, the doctor-owned professional liability insurer, has announced a rate reduction.  You probably won't read about falling medical liability insurance rates in the newspaper, but you can tell your friends and neighbors that rates are dropping even though the Legislature has not placed caps on damages in medical malpractice cases.

Here are the rate changes, by specialty:

Anesthesiology      - 14.1%
Cardiac Surgery    - 14.1%
Gynecological Surgery      - 14/1%
Family Practice – non-procedural     - 9.3%
Orthopedic Surgery       - 9.3%
Pediatrics          - 9.3%
Pulmonary & Critical Care Medicine       - 5.2%
Internal Medicine          + 3.3%
Infectious Disease, Hospitalists        + 3.3%
Gastroenterology       + 5.0%
Interventional Cardiology         + 5.8%
Pathology           +10.0%
Emergency Medicine       +15.0%
Most other specialties        - 4.5%

The overall change for all doctors in the state is a decrease of 4.2%.   The rate change is effective with renewals after May 15, 2007. 

Approximately 74% of doctors will get a rate reduction under the new rate structure.  Conversely, 26% of doctors will get a rate increase.

The 464 OB-GYNs  that are insured by SVMIC will get a rate reduction of 4.5%.  An OB-GYN with five years experience will pay  $59, 792 for $1M / $3M in coverage.  He or she can purchase $5M / $7M in coverage for $80,505.

A FP/GP who does not do OB will pay $15,959 for $1M / 3M in coverage and can double that coverage by paying $18,896.  If the FP / GP does OB work but no major surgery the rate increases to $21, 702 for $1M/3M in coverage and $25,672 for twice that amount.  The rates for these docs decreased by 4.5% effective May 15.

Even these numbers tell only part of the story.  These rates are list prices.  The rate is decreased by 10% if the doctor attends a loss prevention seminar and 5% if the premium is paid up front,  Thus, an OB/GYN who purchases a $5M/7M policy can save over $10,000 by attending a seminar (offered on-line and paying up front).

In addition, the premium includes a provision that if the doctor retires, dies, or becomes disabled during the policy period he or she is provided tail coverage at no charge.  This increases rates by over 4%.

By the way, the rate decrease is projected to still permit SVMIC to increase its surplus by 5% next year.  Surplus increased $33,000,000 to a total of $217,000,000 in 2006. This represented an increase of almost 18% in one year. This follows a $16.4 million dollar increase in 2005.  If the projection is correct, SVMIC's surplus will rise to almost $230,000,000 by the end of 2007.  I suggest that the projection is a conservative one and, unless SVMIC grants a dividend, the surplus will be even higher.

(Surplus in the insurance industry is substantially equivalent to net worth in the traditional business world.  It means that is SVMIC was to stop doing business as of 12/31/06, it could have paid all of its claims, paid all of its loss adjustment expenses, and still had $217,000,000 left.  Because SVMIC is a mutual company, the surplus would become the property of the physician-owners.)

Does this mean that SVMIC is the evil empire?  Of course not.  SVMIC is a business.  It has the right to - and should - price its product so as to protect doctors, provide for injured patients, and increase its surplus to a reasonable level given the total risk it has undertaken. 

My only point is that the Legislature needs to consider these facts in determining the need for reforming the legal system to provide for special privileges for the health care industry.  And it needs to ask: what will we get in return for what we are asking our injured and deceased citizens to give up?

Pardon me, but I have always been a fan of facts.  Opinions are like ... noses, everybody has one. 

The Kaiser Family Foundation has analyzed paid claims data and discovered that in 2005 Tennessee had 10.1 paid med mal claims per 1000 active, non-federal physicians.  Total paid claims were 156.  The national average was 17.1 paid claims per 1000 active, non-federal physicians.

Tennessee ranked 12th lowest in the Nation by this measure.  We are the fourth lowest in the South Census Region.

By the way, Tennessee has 17,888 active physicians not employed by the feds, the 16th highest total in the nation.   And while I cannot vouch for the authenticity of this number (it comes from the AMA) another website that cites the Kaiser data from two years earlier says that at that time Tennessee had 15,447 physicians.  If Kaiser got its data from the AMA for both years, and if the other website accurate quotes the Kaiser website from 2004, then Tennessee has seen an over 10% increase in physicians in the last two years.  And I thought I heard doctors were leaving the state.

The average payment in a Tennessee med mal case is 13 % less than the national average.

Our healthcare employment percentage is higher than the nation as a whole.

And while the number of hospitals in the nation is shrinking, Tennesse has added 6 hospitals in the six-year period ending in 2004. 

But then again, these are just facts. 

The Arkansas Supreme Court struck down that portion of legislation requiring a plaintiff in medical negligence cases to file affidavits of merit in medical malpractice cases within 30 days of filing the complaint or face dismissal of plaintiff's complaint.

The Court ruled that the statute imposed a requirement for commencement of an action that was greater than that imposed by Rule 3 of the Arkansas Rules of Civil Procedure.  The Court went on to say that "[t]he constitutional infirmity in § 16-114-209(b) is the provision for dismissal if the affidavit does not accompany a complaint within thirty days. We do not hold today that the balance of § 16-114-209(b), requiring a reasonable-cause affidavit, is constitutionally infirm. Having said that, it appears that without the time limit of thirty days, the statute largely is duplicative of § 16-114-206 regarding the plaintiff’s burden of proof and medical expert testimony concerning breach of the standard of care in the community."

The case is Summerville v. Thrower, No. 06-501, (Ark. S. C. March 15, 2007).  Read it here.

Larry's recent column on the med mal issue.

Update:   link repaired.

Here is an article that talks about the negotiations concerning the med mal legislation currently pending in the General Assembly.

This excerpt tells it all:  ""Basically [the potential compromise] was done between the legislators themselves representing probably both sides of the interests," Miller [VP of the TMA] said. "One of the things that didn't come through was that doctors _ who are probably the main focus of this legislation _ were not party to these negotiations."

He is right.  The main push for and therefore focus of the legislation is doctors.  Not patients.  Not the common good.  Not justice.

The focus is doctors.  And while I believe have more respect for doctors than the average person (because my work on behalf of patients for the last 25 years has helped me begin to realize the science and art of medicine) I simply do not think that any special interest group should be granted special advantage in our courtrooms.

I participated in these negotiations and can say without hesitation that the people involved worked in good faith to address real issues with real solutions in an effort to advance the cause of justice. 

State Volunteer Mutual Insurance Company , the doctor-owned medical malpractice insurance carrier, continues to enjoy profitability, according to my review of its 2006 Annual Report  that was recently filed with the Tennessee Department of Commerce and Insurance.

A few highlights:

* Surplus, the insurance industry equivalent of net worth, increased $33,000,000 to a total of $217,000,000.  This represents an increase of almost 18% in one year.  This follows a $16.4 million dollar increase in 2005.

* After tax profits were reported at $23,000,000, up over 50% from a year earlier, when profits were $14,730,000.  Total profits for the last 5 years are approximately $49,000,000.

* The company paid out money to plaintiffs in only 158 cases across the state last year.  The total amount paid was $56,660,652.  The average payment per claim was $358,611. 

* Most of the premium income was from Tennessee doctors, but the company also does substantial business in Arkansas ($40M in premium income) and Kentucky ($22M).  Interestingly, neither of those states have damage caps on compensatory damages.

Last year SVMIC had no real increase in insurance rates for its doctors, and this data tells me that there will not be a rate increase in 2007.  Now, let me hasten to add that  I don't pretend to be an actuary or an expert in the insurance business.  I am applying my version of common sense rooted in part in my experience of looking at these financial statements for over 20 years. 

Don't look for a rate decrease either.  My guess is that rates will stay the same and, if SMVIC has another good year, it will return to the practice of paying dividends to its insured doctors.   Dividends have the net result of reducing rates.  Reducing rates is unrealistic in an inflationary economy, especially when the health care inflation rate runs 7 - 8%.  Insurance rates in this market suffer from what economists call "the downward stickiness of prices."  That is, a market conditions change, rates tend to go up more quickly than they go down.  (Think gasoline. Crude goes up $10 a barrel and gas jumps 30%.  Crude goes down $10 a barrel and gas drops 20%.  Or so.)

The good news is that SVMIC now seems to have rates in line after bowing to competitive pressures and a great investment market in the 1990s, which resulted in the company not raising rates when underwriting considerations probably required it.  Let me hasten to add that I am not slamming SVMIC here - they were threatened with some new competition in the 1990s and my information is that they held down rates to save market share.  That's just business.  But those decisions also gave rise to higher rate increases in the new millennium than would have been necessary in the absence of those decisions.  Note to SVMIC:  if I am wrong about this I would be happy to post the company's position on this issue on this blog.  I am always eager to learn more about the insurance industry.

The Tennessean published an op-ed piece I wrote today.  Read it here.

The bill to limit health care provider's responsibility for their errors comes up in Senate Judiciary tomorrow afternoon.  Here is a list of some recent posts on the issue:

"The Great Medical Malpractice Hoax"

Another Aspect of the Big Lie

Top Ten Medical Malpractice Verdicts - 2000-2005

More on the Big Lie

More Evidence of the Big Lie

"It's not personal responsibility I have a problem with.  It is the constant threat of litigation that gets to me.  And that's why we need to cap damages in malpractice lawsuits."

How many times have you heard some member of the health care industry say that? 

I guess that the argument means that the industry doesn't mind valid lawsuits (how can they say anything else?) but they don't like non-meritorious lawsuits.  But how does capping damages stop non-meritorious lawsuits?  Capping damages only limits recoveries for claims already found to be meritorious.

The bottom line is that the industry doesn't trust juries.  It don't think any claim has merit unless they say it has merit.  So, even if a jury demanded by and selected by both parties decides a claim has merit they want to cap damages because they don't trust it to act fairly.  Hold it - that's not correct either.  They will accept a jury acting unfairly by giving too low an award of damages - otherwise they would set a floor on damages.  (Every death case is worth at least x but not more than y.) And they don't trust judges either - trial judges or appellate judges - the men and women who can adjust or reverse jury verdicts not based on the facts or the law.

Now, on the threat of litigation.  Let me tell the industry this.  The rest of us feel it every day, too.  Every single day.  Those of us who have enjoyed the benefits of higher education and made the decision to serve the public go through the same experience.  It is a fact of life - the  thing that makes us think just a little harder, spend a couple extra minutes on that issue, and document just a little better.  And for that extra risk we professionals enjoy a better lifestyle than the men and women who paid the taxes to fund the colleges and universities that got us to where we are and who pay us to use our education and talent to serve them.  I think the threat of litigation is a good thing, not a bad thing.

To be sure, we need to find a better way to ensure that frivolous cases are kept out of the courthouse.  But capping damages on meritorious claims won't do that.

And they know it.

SVMIC, the well-managed, physician-owned liability insurance company that insures an estimated 90% of the doctors in the state, publishes a newsletter called "Riskpoints."  It is available on their website.

The Fall 2006 edition of the newsletter  (article in on Page 2 of the newsletter). listed the top ten jury verdicts against SVMIC insureds in the six year period 2000-2005.  Four of those verdicts were by out-of-state juries (SVMIC writes insurance in multiple states). 

The largest verdict was the verdict in Hunter v. Ura, a Davidson County case, in the amount of $5.8M.  The decedent, a six-figure wage earner, died as the result of an anesthesa error.  He left a wife and two minor children behind.

The other Tennessee verdicts were $5.5M for the death of a child,  $1.7M in a back fusion case for a 36 year old male, $2M for the death of a 46 year old male, $2.94M for what appears to be a brain injury to a child (judgement against doctor and hospital) and $1.8M for death of a 62 year old male in a failure to diagnose cancer case.

The article makes it clear that "[t]he amounts listed are the actual verdicts awarded by the court or jury. Keep in mind that a number of these cases subsequently were settled for significantly lesser
amounts during the course of post-trial negotiations."

Think about it folks.  Six years of cases.  Six adverse jury verdicts.  Less than $20M in total verdicts, some of which were admittedly settled for substantially less that the original judgmnent.

This is why the industry fought for so long not to have to reveal this information.  I have sought for years to find out not just numbers but facts - who is getting these multi-million dollar judgments?

Now we are beginning to learn.

The Legislature should mandate every malpractice insurer to reveal basic facts about every claim they pay over $100,000 so that it can determine whether juries are acting reasonably.

This is a comment from "Chris" to my post on Tuesday

I agree that the main focus is economics. In general, one CV surgeon is needed for approximately every 35-50 thousand people. Now, it is impossible to do this if you are the only one as then there is constraint of constant call, etc. So, specialists tend to concentrate together. The other factor that brings these physicians into larger areas is that is where the hospitals are large enough to have a dedicated OR team, ICU and cardiac cath labs with the attending cardiologists. To further apply economics, it would cost more to place these facilities in a rural area that it would cost for an entire hospital. Also, the re-embursement for bypass surgery has greatly dropped and the risk of litigation is high. As a result, it is economically unwise to practice in a small area, with a small patient volume, inadequeate facilities.

Chris - what is the source for your data?  Are you aware of statistics that tell us what sort of population is required to support a each class of specialist?

Also, I understand why a CV surgeons would not want to practice alone and face 24/7/365 call.  Do you mean then that for two CV surgeons to enjoy an acceptable income (given the investment they have made in their careers) that they would need a population of 75K - 100K of people?

Thanks for taking the time to educate us.

"We have to limit the liability of negligent health care providers because doctors are leaving medicine to work at Krystal (or whatever)."  That's the non-stop babble we hear from lobbyists and pr flacks for the health care industry.

Then, there are the facts.

Consider this:  cardiac surgeons are looking for work.  According to this article from USA Today, "[t]he use of artery-opening stents has helped lead to a sharp drop in the number of patients having cardiac bypass surgery and contributed to a tight job market for cardiac surgeons and falling interest in the specialty by medical school graduates."

USA Today goes on to report that "[a] survey of 88 cardiothoracic residents finishing their training found that 12% received no job offers in 2004, according to a 2006 article in the Annals of Thoracic Surgery. At the same time, the number of applicants choosing to pursue one of the 140 training spots each year has also declined. In 2005, there were only 104 applicants filling 100 of the 139 available spots, according to the article."

Jee whiz, we can use those doctors in Tennessee.  The health care industry keeps telling us that the only reason doctors won't move to rural areas is the threat of being held responsible if they make an error - as if they were truck drivers who ran a red light.  Imagine that!

So, to all you cardiac surgeons who read this I am happy to report my guess that there are dozens of Tennessee cities without cardiac surgeons so we have lots of jobs available.  Lynchburg doesn't have a cardiac surgeon.  Oh, you're concerned that there is no hospital in Lynchburg.  No problem - we'll build one.  Ridgley doesn't have a cardiac surgeon or hospital either, but we must need one and it is a great place to duck hunt. I could go on and on.

But won't.

Folks, principles of economics apply to the health care industry.  Demand almost always drives supply.  (Of course - you can create demand  under some circumstances, e.g. plastic surgery ads and drug ads.  You don't create demand for getting cancer or having a heart attack.)  Economic reality means that you can't put high-paid specialists in every hamlet because there simply is not enough demand for their services.  You can't put a hospital every 17.89 miles because you can't fill the beds.  You can't deliver babies in a hospital unless you have sufficient volume to justify the expense of staffing an OB unit 24/7/365.  So, you are not going to get neurosurgeons and OBs and oncologists to move to rural areas unless they have enough patients to make a decent living and a hospital capable of supporting their practices.

The health care industry knows this.  You don't consume over 13% of our nation's GNP and not understand economics.  But the industry continues to tell the world that they need limited responsibility for their actions because the rural areas are being deprived on convenient health care.

And that is why I call their argument "the Big Lie."

In 2003 Texans passed Proposition 12.  It placed caps on human losses in valid medical negligence claims and put in place other restrictions on the rights of citizens injuryed by medical negligence to seek justice. "Patients were told to expect significant improvements in health care across the state, as well as dramatically lower medical liability insurance premiums for their family doctors."

So now what?  Or as a friend of mine would put it, "how's that workin' for ya?"

Here is a brief summary of a report from Texas Watch:

* "Statistics from the Texas Medical Board (TMB), the state agency responsible for licensing doctors, show that since 1997, Texas has seen a steady increase in the number of doctors licensed to practice medicine. Between 1997 and 2003, Texas had an average annual rate of increase in medical licensees of 3.5%. Not only was there not a decrease in the number of doctors obtaining licenses, but there was a dramatic jump in the rate of new licensees the year before Proposition 12 was debated and passed. In 2002, the rate of increase jumped to 5.11% – well above the average rate of growth. Moreover, there is no evidence that Proposition 12 has improved overall access to care. Indeed, Texas Department of Health statistics show that in 2006, Texas gained only 639 direct care physicians – those that are actually practicing medicine – a paltry increase of just 1.8%, which is slower than it was pre-Proposition 12."  [Footnote omitted.]

* "Every underserved region in our state has seen lower average growth in the rate of new doctors in the three years since Proposition 12 passed (2004-2006), than in the three years before (2001-2003). The trend leaves only one conclusion: Proposition 12 has failed to produce the results that were promised to Texans living in underserved parts of our state."

* "The Medical Protective, the nation’s largest medical liability insurance provider, asked for a 19% rate increase one month after Proposition 12 passed. In its filing to Texas insurance regulators, the company wrote, 'Non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1.0%.'" [Footnote omitted. Emphasis added.]

Read the full report for more information.

Professional and hospital liability insurers have convinced their customers that malpractice premiums will go down if meritorious malpractice claims are capped by the state legislature.

But look what happened in Florida.  According to Tallahassee.com, "the Legislature three years ago capped pain and suffering awards to $500,000 per physician and $1 million per case. Since then, [ Florida Department of Financial Services' Consumer Advocate Steve] Burgess contends, insurance data shows medical malpractice legal costs and payouts have dropped 43.6 percent, from $989 million to $557 million."  And rates?  One insurer wants to cut them 8.6%.

Caps on human losses in malpractice cases will have no material effect on rates, and it the insurance companies believe that it will they should agree to a reduction in premiums as a matter of law.  The amount of the reduction should be determined by an independent actuary, the cost of employing such borne by each company.  The amount of saving should be available to the Legislature before voting on caps so that they can determine whether it is in the best interest of the state to save doctors and hospitals money by capping jury awards in meritorious cases.

Now, I know that the insurance industry will cry out that any caps will be subject to a constitutional challenge and that they cannot discount rates until after the constitutional challenge to the caps works its way through the courts.  I understand that, but then the mandatory reduction in premiums should be paid to the state to hold pending the constitutional challenge.  If the caps are struck down, the companies can get their money back.  If not, the money can be refunded to the payor.

Caps do save insurance companies money  by taking money away from (1) the claimants who have catastrophic losses and (2) eliminating downside-risk in cases involving injured or dead children, stay-at-home mothers, and the elderly, thus further suppressing settlements and judgments in cases for these people.  But the savings will not find their way to the the insureds and, even if they would, represent bad public policy.

There needs to be some reforms in the area of medical malpractice litigation.  There are too many expert witnesses - the number of experts per issue needs to be limited.  The locality rule is ridiculous and needs to be eliminated.  The contingous state rule makes no sense whatsoever, particularly concerning causation experts.  We need to address the issue of lawyers who file cases without consulting experts first - almost always a bad practice.  We need to encourage judges to force the cases to trial or other resolution quicker - lingering cases are not in the best interests of defendants or plaintiffs.   We need to find a way to entice family practice doctors to move to rural counties, while helping the residents of those counties understand that this state cannot afford an OB unit in every hospital or a neurosurgeon in every county. 

The Economic Policy Institute has a different take on the impact of "tort reform" on the economy.

An excerpt:

The legal system for adjudicating tort claims in the United States delivers important bene?ts to the American people. Most notably, these benefits include the compensation of injured persons (including people harmed by giant corporations and other powerful interests), the deterrence of wrongdoing, greater investments in product innovation and safety, and the civilized, non-violent settlement of disputes. These benefits are rarely quantified, and critics generally focus exclusively on the system's costs, whose magnitude and impact they tend to exaggerate, claiming that job growth, productivity, health care, and corporate profits suffer under the current system. Although a full review requires an examination of both the costs and benefits of the system, this briefing paper reviews only the tort system's most commonly alleged economic costs and impacts and shows that most have little or no basis in reality.

Thanks to Bill Childs at TortsProf  for telling me about the article.

In a recent post I set out in their entirety the comments of a doctor who told us of the fear he has testifying on behalf of plaintiffs in medical negligence cases.  He has written back - and here it is:

NOTE:  there are a bunch of unusal characters in the email.  I received the email in this format so I assume that something got scrambled in the transmission over the Web.  It is being published as it was received.

Hello again,

That's the name of a new report issued by Public Citizen. From the press release:

"Public Citizen reviewed publicly available information from 1990 to 2005 from the federal government’s National Practitioner Data Bank (NPDB), which contains data on malpractice payments made on behalf of doctors as well as disciplinary actions taken against them by state medical boards or hospitals. According to the analysis, the total number of malpractice payments paid on behalf of doctors, with judgments and settlements, declined 15.4 percent between 1991 and 2005, and the number of payments per 100,000 people in the country declined more than 10 percent. In addition, the average payment for a medical malpractice verdict, adjusted for inflation, dropped eight percent in the same period. "

And this:

"“Despite assertions by the medical and business lobbies that physicians are leaving practice because of burdensome malpractice lawsuits, the number of doctors is increasing faster than the population,” said Laura MacCleery, director of Public Citizen’s Congress Watch group."

Here is a couple of items from the report itself:

"American Medical Association President Donald Palmisano told the 2004 Annual Meeting of the AMA House of Delegates that “what is driving this crisis are the out-of-sight awards some runaway juries are handing out in certain liability cases.”13 This assertion is incorrect on the facts – when adjusted for inflation, the median judgment grew only from $125,000 in 1991 to $139,100 in 2005, a mere $14,000 over 14 years. Such a modest increase hardly suggests that juries are irrational."

...

"Our analysis of NPDB data shows that only 33 percent of doctors who made 10 or more malpractice payments received any disciplinary action by their state medical board. Even more disturbing, NPDB data show that physicians with up to 31 medical malpractice payments totaling millions of dollars in damages never received any disciplinary action."

...

"The number of payments for easily avoidable errors, such as leaving a foreign object inside a patient, or operating on the wrong body part, fell from 874 in 1991 to 576 in 1997, and then remained relatively constant until 2004, when incidents increased dramatically. The most recent data reflect the highest number of such errors in 11 years."

...

"The vast majority of doctors – 82 percent – have never had a medical malpractice payment since the NPDB was created in 1990."

...

"Only 1.1 percent of doctors, having four or more malpractice payments, were responsible for 20.2 percent of all payments."

...

"Physician Number 33041 had at least 31 malpractice payments between 1993 and 2005, nine for failure to use proper aseptic technique, five for unspecified errors, three for improper management of obstetrics cases, three for improper performance of surgery, three for retained foreign object during surgery, two for failure to treat, one for surgery on the wrong body part, one for failure to obtain consent for surgery, one for delay in treatment of fetal distress, one for failure to treat fetal distress, one for an improperly performed delivery, and once for improper technique. The total damages were $10,150,000."  Note: this physican was not disciplined by the medical board in his or her state.

Click here to read the entire report.

Just one segment of an op-ed piece in today's Tennessean:  "How bad is medical malpractice? According to an article in the Journal of the American Medical Association by Dr. Barbara Starfield of Johns Hopkins School of Public Health, the third-leading cause of death in this country after heart problems and cancer is adverse reaction to medical treatment and medical mistakes."

I wrote two posts in the last year (here and here)about doctors who have been attacked by organized medicine for giving testimony on behalf of plaintiffs in medical malpractice lawsuits.  The goal of these efforts is not only to punish the doctors for having the audacity to testify for a plaintiff in a medical malpractice case but also to discourage other doctors from testifying.

This weekend I received this comment to one post :

I'm a physician but I do not want to reveal my real name because this topic is so controversial. In the past I would infrequently give depositions or testify in malpractice cases. I think I worked on a total of 20 cases in about 15 years. I have worked both with defense and plaintiff's attorneys but plaintiff work is easier to get so I did somewhat more of that. When I began to read about the horrendous ordeals some physicians went through when some board picked apart their testimony, I decided to give it up entirely.

There actually should be a law protecting expert witnesses from this type of abuse. Also, the theory that expert testimony constitutes medical practice is completely preposterous. The AMA and other physician groups should not be allowed to get away with it. I've tried speaking up about this at some medical meetings, but I now have given up. Most doctors are completely convinced that anything that one can do to make life harder for plaintiffs is to their benefit. I think that patients and patient advocates need to speak up and contact their representatives in Congress and the state legislatures or the AMA is going to get it's way.

To the writer:  Thanks for taking the time to express your thoughts on this important subject.  While I agree that patients and patient advocates need to speak out on this issue, I hope that you will do so, too.  As a physician, your observations and opinions will really help motivate legislators to action.

The property and casualty insurance industry has reported after-tax profits of $44.9 billion for the first nine months of 2006, up 50.1% from a year earlier.  If this path continues for the last three months of the year, it "would lead insurers to their best financial performance in nearly 20 years," according to the Insurance Information Institute.

"Strong underwriting results are being reported in virtually every key line of insurance" including comp and auto insurance.

What is most interesting is that the combined ratio is down to 91.5, down from 99.8 for the same nine-month period in 2005.  The "combined ratio" is the cost of paying and adjusting claims compared with premium income.  A combined ration of 91.5 means that the industry paid out 91.5 cents for each dollar it collected in premiums.   If the industry ends the year with a combined ratio at 91.5 it would be the best result in nearly 60 years.

The industry also makes significant money with its investments.  Profits there were almost $40 billion.  Interestingly, the industry has less than 17% of its portfolio in the stock market.

These results will not stop the efforts to restrict the right of consumers to the right of trial by jury.  The successes the industry has had in previous years is working its way to the bottom line, and the industry will continue to press for more "reforms" that will improve predictability in a business that is all about risk assessment.  Over the last 20 years the industry has made extraordinary efforts to shift the focus (and expense) of the pro-tort reform movement to industry, and with record profits like these you can expect that they will continue to do so.

Read more here.

The Oklahoma Supreme Court has struck down a requirement that an affidavit of merit  from an expert be filed with medical negligence lawsuits.

The statute at issue "requires that a plaintiff alleging medical malpractice attach an affidavit to the petition stating that the plaintiff: 1) has consulted with a qualified expert; 2) has obtained a written opinion from a qualified expert that the facts presented constitute professional negligence; and 3) has determined, on the basis of the expert's opinion, that the malpractice claim is meritorious and based on good cause. Plaintiffs may petition the trial court for an extension for filing the affidavit of merit not to exceed ninety days. The request must be accompanied by a showing of good cause. Although the defendant may obtain a copy of the expert's opinion, upon which the affidavit of merit is based, the opinion is inadmissable at trial and may not be utilized in discovery."

The requirement was struck down as a violation of a provision of the Oklahoma Constitution that provides that ""The Legislature shall not except as otherwise provided in this Constitution, pass any local or special law ... Regulating the practice or jurisdiction of, or changing the rules of evidence in judicial proceedings or inquiry before the courts."

In addition, the law was struck down because the cost of obtaining the affidavit - $500 to $5000 - creates an unconstitutional financial barrier to access to the courts guaranteed under the Oklahoma Constitution.  The Court said as follows:

 "Although statutory schemes similar to Oklahoma's Health Care Act do help screen out meritless suits, the additional certification costs have produced a substantial and disproportionate reduction in the number of claims filed by low-income plaintiffs. The affidavit of merit provisions front-load litigation costs and result in the creation of cottage industries of firms offering affidavits from physicians for a price. They also prevent meritorious medical malpractice actions from being filed. The affidavits of merit requirement obligates plaintiffs to engage in extensive pre-trial discovery to obtain the facts necessary for an expert to render an opinion resulting in most medical malpractice causes being settled out of court during discovery. Rather than reducing the problems associated with malpractice litigation, these provisions have resulted in the dismissal of legitimately injured plaintiffs' claims based solely on procedural, rather than substantive, grounds.

 Another unanticipated result of statutes similar to Oklahoma's scheme has been the creation of a windfall for insurance companies who benefit from the decreased number of causes they must defend but which are not required to implement post-tort reform rates decreasing the cost of medical malpractice insurance to physicians. These companies happily pay less out in tort-reform states while continuing to collect higher premiums from doctors and encouraging the public to blame the victim or attorney for bringing frivolous lawsuits."  [Footnotes omitted.]

And it went on to say this:

"This Court does not correct the Legislature, nor do we take upon ourselves the responsibility of legislating by judicial fiat. However, we are compelled to apply Oklahoma's Constitution. It has long been the policy of the Oklahoma Constitution, the statutes and this Court to open the doors of justice to every person without distinction or discrimination for redress of wrongs and reparation for injuries. Although art. 2, §6 does not promise a remedy for every wrong, it requires that a complainant be given access to court when a wrong suffered is recognized in the law.

Treating medical malpractice plaintiffs with rules inapplicable to all other negligence claimants interjects a degree of arbitrariness which sabotages equal access to the courts. Section 1-1708.1E creates the potential for a medical expert to usurp the functions of the judiciary and the trier of fact. The requirement that a medical malpractice claimant obtain a professional's opinion that the cause is meritorious at a cost of between $500.00 and $5,000.00101 creates an unconstitutional monetary barrier to the access to courts guaranteed by art. 2, §6 of the Oklahoma Constitution. "  [Footnotes omitted.]

The case is Zeier v. Zimmer, Inc.,  2006 Ok. 98 (12/19/06).  Read it here.

Here are the latest stats on the state of the property and casualty industry as analyzed by Americans for Insurance Reform, a consumer group.

Some highlights:

* "The U.S. property/casualty industry's underwriting profit for the first half of 2006 was $15.1 billion - 31.8 percent higher than the first six months of 2005 which were already record-breaking."

* "[A]ccording to the third-quarter Council of Insurance Agents and Brokers survey of market conditions, commercial insurance rates are now dropping significantly across the country, irrespective of enactment of “'tort reform.'”

* “'It now appears clear that the industry’s record profits in 2004 and 2005, and the exceptional record profit about to be reported for 2006, are due in large part to the years of huge rate hikes in the earlier part of the decade, which were not caused by any accompanying increase in claims or payouts. In fact, inflation-adjusted payouts and claims never increased at all during this period. Rather, this is all part of a well-documented cyclical phenomenon for the property/casualty insurance industry.'”

Remember Newt Gingrich?  Of course you do.  Former Speaker of the House.  Author of the Contract on America.

And now, the author of a new list of issues for Republicans to focus on during the coming months, which he titles  "11 Ways to Say: "We're Not Nancy Pelosi."

His introduction:  "Republicans should spend the next two months focused on 11 straightforward, morally grounded issues about which the American people have clearly defined beliefs.

A Republican majority in the House that spent the next two months on these eleven issues would go a long way toward clarifying the choice between the San Francisco values of Nancy Pelosi and those of a GOP majority. This refreshing approach would reject the "incumbentitis" of relying on pork-barrel spending for reelection and return to the basic populist conservative values which gave us a majority in the first place."

Here is the list:

1. Make English the Official Language of Government.

2. Control the Borders.

3. Keep God in the Pledge.

4. Require a Voter ID Card.

5. Repeal the Death Tax, for Good.

6. Restore Property Rights.

7. Achieve Sustainable Energy Independence.

8. Control Spending and Balance the Budget.

9. Tie Education Funding to Teacher Accountability.

10. Defend America From the Irreconcilable Wing of Islam.

11. Focus on Iran and North Korea.

Does everybody see what is missing? 

Read more here.

Do you want to see how the tort deform movement has made an impact on the laws of the fifty states (and D.C.)? See this article.

The abstract: "This manuscript contains the most detailed, complete and comprehensive legal dataset of tort reforms in the U.S. The dataset records state laws in all fifty states and the District of Columbia over the last several decades. For each reform we record the effective date, a short description of the reform, whether or not the jury is allowed to know about the reform, whether the reform was upheld or struck down by the states' supreme courts, as well as whether it was amended by the state legislator. Previous and current scholarship which studies the empirical effects of tort reforms uses various different legal datasets, (tort reforms datasets and other legal compilations), some which existed online, some created ad-hoc by the researchers. Besides being different from each other, these datasets frequently do not cover reforms adopted before 1986, miss reforms superseded after 1986, miss court-based reforms, ignore effective dates of legislation, and do not accurately record judicial invalidation of laws. It is possible that at least some of the persisting variation across empirical studies about the effect of tort reforms might be due to variations across legal datasets used. This dataset builds upon and improves existing data sources. It does so by reviewing original sources of legislation and case law to determine the exact text and effective dates. It is hoped that by creating one "canonized" dataset our understanding of the impact of tort reform on our life will increase."

The author is Ronen Avraham, a Professor at Northwestern.

Thanks to the Torts Prof Blog for the info.

Senators Clinton and Obama have written an article about the need for patient safety for the New England Journal of Medicine.

The opening paragraph: "We have visited doctors and hospitals throughout the country and heard firsthand from those who face ever-escalating insurance costs. Indeed, in some specialties, high premiums are forcing physicians to give up performing certain high-risk procedures, leaving patients without access to a full range of medical services. But we have also talked with families who have experienced errors in their care, and it has become clear to us that if we are to find a fair and equitable solution to this complex problem, all parties - physicians, hospitals, insurers, and patients - must work together. Instead of focusing on the few areas of intense disagreement, such as the possibility of mandating caps on the financial damages awarded to patients, we believe that the discussion should center on a more fundamental issue: the need to improve patient safety."

The Senators propose to pass legistation to address this issue. According to the article, "[t]his legislation would create an Office of Patient Safety and Health Care Quality within the Department of Health and Human Services. The director of this office will be responsible for establishing a National Patient Safety Database, conducting data analyses to inform policy and practice recommendations, establishing and administering the National Medical Error Disclosure and Compensation (MEDiC) program, and supporting studies related to MEDiC and the medical liability system."

Read the entire article here.

Last week Tennessee's health care industry tried to hijack the Governor's Cover Tennessee bill in an effort to obtain caps on their liability. The effort failed, thanks to the efforts of the entire Democratic Caucus in the Senate, Chairpman Person (R-Memphis), Senator Williams, and others.

The industry worked to amend the Cover Tennessee bill on the floor to limit their responsibility after a jury determines that medical negligence occurred. Usually, measures of this type are brought up through the committee system and, in fact, a similar piece of legislation was defeated in a House subcommittee this year. But the doctors alone had spent no less than $500,000 this year to get the special treatment they think they deserve so they decided to use the Governor's health care bill to get what they wanted.

What is even more interesting is that they denied doing it. Why would they deny responsibility for trying to limit their responsibility? Because it is considered bad manners on Capitol Hill to try to bypass the committee system. And because you don't mess with the Governor's legislation without risking his ire. So, when the health care industry decided to do so, I guess they decided it was best to lie about what they were doing.

Now the industry will have to live with the consequences of its actions. The Governor will not forget that the industry was willing to derail the Tennessee Choice bill to get damage caps. The fact that the industry was willing to do so says volumes about the lengths to which some industries will go to limit responsibility for their actions.

The property and causalty insurance cycle, understood by everyone except some (but not all) Republican lawmakers, continues to turn.

Insurance company profits are swelling and insurance price increases have come to a virtual halt. Last year premiums rose an average of one-half of one percent and net income increased 12%, despite record catastrophe losses. Surpluses (think "net worth") in the industry now exceed $427 Billion. The average rate of return on surplus was 10.5%.

This article tells us that one expert predicts that premium growth will slow in 2006 and, in fact, may be less than the rate of inflation. Insurers will have cut prices to maintain premium volume, which will cause underwriting losses. Some degree of underwriting losses are ok (last year the companies paid loss and loss adjustment expenses of $100.90 for every $100 in premium) so long as the companies can earn a decent rate of return on their investments. If they don't, however, they have to raise rates to maintain profitability. Of course, the companies then will blame those increases on GREEDY TRIAL LAWYERS.

Here is a report from the Insurance Information Insitute about the performance of the industry in 2005.

The Senate has just had the cloture vote on S.B. 22.

The result was 48 - 42 to continue debate. Sixty votes were required to cut off debate.

The fillibuster stands; debate continues.

They are now voting on S.B. 23.

UPDATE AT 5:21: The result on SB 23 was 49 - 44. Debate continues.

The bills are dead.

UPDATE Tuesday morning at 4:50 a.m. : This is an embarassing defeat for Senator Frist. He pushed this issue to the floor once again and came more than 10 votes short of the number he needed to cut off debate. Either the Majority Leader cannot count, or this matter was brought to the floor for the sole purpose of raising campaign contributions for the health care industry.

2:17 P.M. Monday: Here is the link to the CSPAN site where you can watch the debate:

Debate

Senator Frist and his friends are back with another bill to restrict the rights of medical malpractice victims. Here is the bill, known as S.B. 22.

Expect a vote on cloture today or tomorrow.

The legislation includes caps on noneconomic damages, uniform statutes of limitations (except in states that have more pro-provider limits), expert witness rules, collateral source changes, and caps on attorneys' fees. The bill also enhances Rule 11 sanctions in medical malpractice cases.

A companion bill, S.B. 23, gives special treatment to people who commit malpractice on an expectant mother and her child or children.

Isn't nice that the country is in such good shape that the Senate can waste time on legislation like this? Good thing we are not at war, we have federal spending under control, our ports and airways are secure, we have a solid energy policy in place to secure our economic future, and all but 44 million people have affordable health insurance (and those 44 million people have no health insurance) so that we can spend time on legislation like this.

Joint and several liability has been abolished in the State of Florida. Here is a copy of the bill, courtesy of Matt at Abstract Appeal.

ATLA CEO Jon Haber's Statement in Response to Bush's Attacks Today on the Civil Justice System

(Washington, DC)-ATLA CEO Jon Haber issued the following statement in response to Bush's attacks today on the civil justice system:

"It would take the President less than a minute to discover the number of physicians is on the rise, not declining, and that the reason for inflated malpractice insurance premiums is directly attributable to insurance industry greed. Bush carelessly throws around terms like 'junk lawsuits.' But the civil justice system he is attacking protects families who lose children as the result of medical negligence and patients who suffer devastating injuries -- all of whom deserve accountability. So it appears the 'plethora of lawsuits' the President referred to must be buried out there somewhere with the weapons of mass destruction in Iraq."

The following are the facts:

AMA Data: The Number of Physicians Up Nearly 90 Percent Since 1980. According to data from the American Medical Association, the number of physicians is up nearly 90 percent since 1980 - from 467,679 to 884,974 in 2004.[1] In addition, the number of emergency room doctors has increased from 5,699 in 1980 to 27,864 in 2004 - an increase of 388 percent.[2] The number of OB-GYNs has increased by nearly 60 percent - from 26,305 in 1980 to 42,059 in 2004.[3] The number of neurosurgeons has also increased by nearly 60 percent - from 3,341 in 1980 to 5,288 in 2004.[4] Over the same time period, the total U.S. population increased by only 29 percent - from 227.7 million in 1980 to 293.9 million in 2004.[5]

CBO: Savings from Reducing "Defensive Medicine" Would be "Very Small." According to the Congressional Budget Office (CBO) "... some so-called defensive medicine may be motivated less by liability concerns than by the income it generates for physicians or by the positive (albeit small) benefits to patients. On the basis of existing studies and its own research, CBO believes that savings from reducing defensive medicine would be very small."[6]

GAO: The "Prevalence" and "Costs" Associated with "Defensive Medicine" Have Not Been "Reliably Measured." According to the Government Accountability Office, "[p]ysicians reportedly practice defensive medicine in certain clinical situations, thereby contributing to health care costs; however, the overall prevalence and costs of such practices have not been reliably measured. Studies designed to measure physicians' defensive medicine practices examined physician behavior in specific clinical situations, such as treating elderly Medicare patients with certain heart conditions. Given their limited scope, the study results cannot be generalized to estimate the extent and cost of defensive medicine practices across the health care system. ... Recent surveys of physicians indicate that many practice defensive medicine, but limitations to these surveys suggest caution in interpreting and generalizing the results."[7]

Study Shows that Leading Medical Malpractice Insurers are Price-Gouging Doctors. A study[8] of medical malpractice insurers entitled "Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry" has found that insurance companies have been price-gouging doctors by drastically raising their insurance premiums, even though claims payments have been flat, or in some cases decreasing. The study, conducted by former Missouri Insurance Commissioner Jay Angoff for the Center for Justice and Democracy, a consumer advocacy organization, compiled data from the 2004 annual reports of the 15 largest insurance companies, which are filed under oath with state insurance departments. According to the insurance companies' own numbers:

?� Between 2000 and 2004, the amount malpractice insurers collected from doctors in premiums more than doubled, while their claims payouts have remained essentially flat. The malpractice carriers analyzed in the report collectively increased their net premiums by 120.2 percent during this time period, although their net claims payments rose by only 5.7 percent. Thus, they increased their premiums by 21 times the increase in their claims payments.

?� During this time, even industry projections of claims they plan to pay out in the future - their justification for higher premiums - have decreased.

?� Leading insurers increased their surpluses by a third - to a level far above what is recommended by the National Association of Insurance Commissioners.

The Bush Justice Department: The Number of Federal Tort Trials is Down Nearly 80 Percent Since 1985. The Bush Justice Department reported last year that the number of tort (personal injury) cases resolved in U.S. District Courts fell by 79 percent between 1985 and 2003. In 1985, 3,600 tort trials were decided by a judge or jury in U.S. District Courts. By 2003, that number had dropped to less than 800.[9]

The Bush Justice Department: The Number of State Tort Trials is Decreasing. According to the most recent data from the Justice Department's Bureau of Justice Statistics, the number of tort trials at the state level has decreased. These statistics were compiled as part of the Bureau's survey of state civil justice systems in the nation's largest 75 counties. Among these counties, the number of tort trials decreased 31.8 percent between 1992 and 2001.[10]

[1] "Physician Characteristics and Distribution in the U.S.," American Medical Association, 2006 edition, p.312

[2] Ibid

[3] Ibid

[4] Ibid

[5] U.S. Census Bureau data, http://www.census.gov/prod/ 2005pubs/06statab/pop.pdf

[6] Ibid

[7] "Medical Malpractice: Implications of Rising Premiums on Access to Health Care," GAO, 9/29/03, www.gao.gov/cgi-bin/getrpt?GAO-03-836

[8] "Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry," Jay Angoff, 7/05; http://www.centerjd.org/ANGOFFReport.pdf

[9] "Federal Tort Trials and Verdicts, 2002-03", Bureau of Justice Statistics, 8/17/05

[10] "Civil Trial Cases and Verdicts in Large Counties, 2001", Bureau of Justice Statistics, 4/04

Lynn Swann, Republican candidate for Governor of Pennsylvania, has called for tort reform. Read more here.

Yet another reason for me to dislike the Steelers (except the Bus - I think the Bus is fantastic.)

Thanks to Torts Prof Blog for bringing this article to my attention.

Texas passed damage caps and other legal "reform" measures and now people are starting to understand the harm that we predicted would occur.

This article explains the costs.

An excerpt: "But the reforms have exacted a high price, particularly among the very old and very young, patient advocates say. Because they can't ask juries for large pain and suffering awards anymore, lawyers now look for cases in which a patient or survivors have suffered a large economic loss - generally, lost wages as a result of injury or death. Complex malpractice cases can cost $100,000 to prepare. If injured patients' best earning days are behind them, or the patient is a child whose future income is impossible to predict, the potential rewards may be too small to make the case worth filing."

Yesterday afternoon the Civil Practice Subcommittee of the House Judiciary Committee voted 3-2 to reject a bill offered by Rep. Doug Overbey that would have capped pain and suffering awards to medical malpractice victims and placed other limitations on recoveries. Voting against the legislation were Chairman Briley, Majority Leader McMillian, and Rep. Brooks. Fifteen to twenty doctors and the spouses of several attended the committee meeting and worked the halls before the vote. Several victims of malpractice also attended and spoke with some of the committee members.

The health care industry reportedly spent $500,000+ on this effort and one of their representatives has told me that they will be back next year. They want caps on damages and will accept nothing less.

The legislators opposing this legislation were under tremendous pressure to vote in favor of the health care industry and exercised great courage by standing up in favor of patients. Each of them deserve our thanks and our support.

The TTLA lobbying team did a great job on this legislation. We are fortunate to have a dedicated group of lobbyists, not just because they get paid to lobby but because they believe that we are right. Their tireless efforts were of great assistance in beating back yet another effort at "tort deform."

The Civil Practice Subcommittee of the House Judiciary Committee meets today to hear testimony on the medical malpractice reform bill sponsored by Rep. Doug Overbey. The legislation caps damages non-economic losses at $250,000 against providers and $250,000 against factilities, with no more than $500,000 awarded in any one case. It mandates periodic payments of future damages, changes the rules concerning expert witnesses, limits the bond that must be posted by a defendant on appeal, requires a certificate of merit, and limits attorneys' fees. The Bill is HB 3693; read more about it here. The five-person committee will vote at the conclusion of testimony.

I will be spending the day at the Legislative Plaza.

Here is an editorial from Wausau Daily Hearld Wisconsin, the county seat in my home county in the Northwoods.

A sample:

"Now legislators have pulled another number from thin air and set it as the cap after hearing tales of horror and woe from the state's physicians. You likely heard or saw some of their ads. They said that without a cap, doctors would flee the state for fear of being sued, or that health care costs would skyrocket to compensate doctors for increasing insurance premiums.

Problem is, not much of it is true."

Tort reform swept through Georgia in 2005, and now the harm and the potential for harm is beginning to be felt. This article from Atlanta's leading newspaper explains the consquences of the offer of judgment rule.

I hasten to note that the Tennessean has editorialized against tort reform for years.

Thanks to Ken Shigley from telling us about this article.

The Florida Supreme Court ruled that the limitation of attorneys' fees in medical negligence cases could be the subject of a knowing, voluntary waiver by a plaintiff in a medical negligence suit. It directed the Florida Bar (Florida has a unified bar association) to come up with an appropriate rule to guide Bar and the public on this issue.

Here is the proposed rule. The written waiver is on Page 47 and 48 of the linked PDF file.

Any state that has a fee cap that will make it impossible for a competent lawyer to represent an injured or deceased plaintiff in a medical negligence (or any other tort) action should look to Florida for guidance on the issue.

Once again, thanks to Matt at Abstract Appeal for giving me the link to the proposed rule. Matt has a great blog and I urge you to check it as often as time permits.

Health care industry lobbyists: read this article and then try again to convince me that juries are solely motivated by sympathy.

In fact, given that most med mal cases concern serious injury or death (because of the economics of pursing the claims) what explanation do you have for defense verdicts in any of the cases?

And why is it everytime I do not demand a jury in a medical negligence case the defense demands one? Why would they want to expose themselves a crazy jury?

Why?

This study by "Americans for Insurance Reform" says that the so-called crisis in the medical malpractice insurance market is over.

The introduction to the report:

"The most recent data from the Council of Independent Agents and Brokers now confirms that the large medical malpractice insurance rate increases that took hold around the nation in 2001 and 2002 have ended.

The average rate hike for doctors over the past six months has been 0 percent. This is following similar results for the last quarter of 2004, which saw rates rising only 3 percent at the end of that year. By comparison, rates jumped 63 percent during the same quarter of 2002.

This phenomenon it is occurring whether or not states enacted restrictions on patients' legal rights, such as "caps" on compensation."

Anticipating this, the health care industry has abandoned this as a argument for restricting patient rights. The new position: holding health care providers responsible for the harm they cause restricts access to health care.

Yeah, personal responsibility is a difficult thing for many people to accept.

The Tennessean was kind enough to publish an op-ed piece I wrote. Here is the full article from today's paper.

Health-care industry sells snake oil about malpractice

By JOHN A. DAY

Tennessee's health-care industry has launched yet another assault on patients' rights, seeking once again to limit its financial responsibility for harm and death caused to patients by negligent acts and omissions.

For three decades, the industry has claimed that it needs special treatment in the eyes of the law so it could have lower malpractice insurance rates. Now, faced with overwhelming evidence that restricting the rights of injured patients have little, if any, effect on those rates, the industry has gone to "Plan B."

What is Plan B? Well, the industry now says it deserves special treatment because current law affects "access" to health care. That's right: They attempt to argue that if doctors and hospitals in Nashville get special treatment, there will be more doctors and hospitals in rural areas.

The industry press release gave these statistics to support its desire for a new set of laws that will further protect the industry: "81 of 95 counties have no residing neurosurgeon in patient care, 49 counties are without a residing orthopedic surgeon in patient care, 47 have no emergency physician, and 42 don't have a residing obstetrician/gynecologist."

Scary, isn't it? But before you agree to give away your rights, consider these facts and the implications of what the industry is saying.

It is true many rural counties do not have the full spectrum of medical specialists that you would expect to find in the big cities of our state. For example, Moore County, home to Lynchburg and 6,000 Tennesseans, does not have any medical specialists. Of course, it does not have a hospital either.

Should we build a hospital and have a team of highly trained medical specialists in Moore County, Tenn., when there is a hospital in Tullahoma just 5 miles away? Its emergency room has around-the-clock care and sees 17,000 patients a year. It has 75 doctors, six of whom practice obstetrics and gynecology, two of whom are neurosurgeons, and two of whom are orthopedic surgeons. A sick person in Lynchburg can be at a hospital quicker than a sick person living in the Shelby Park neighborhood of Nashville.

Not enough doctors in Tullahoma? Folks in Moore County can also go 19 miles away to Winchester. The Southern Tennessee Medical Center there has five doctors who deliver babies and four orthopedic surgeons. It also has a 24-hour emergency room. And just 26 miles south of Lynchburg is a hospital in Fayetteville that has three doctors who deliver more than 300 babies per year. The hospital also has two orthopedic surgeons and a fully staffed emergency room.

The 11,500 people in Lewis County do not have high-end medical specialists in the county and do not have a hospital where these specialists could work. Fortunately for them, just 33 miles away is Maury Regional Hospital, with 165 physicians. That facility has over 1,600 baby deliveries a year and has seven orthopedic surgeons and nine emergency room doctors.

There are similar examples across the state: small, rural counties that lack the population and facilities to attract highly trained specialists to set up a practice. That fact has nothing to do with the legal system; it has everything to do with economics and common sense. Neurosurgeons, obstetricians, orthopedic surgeons and emergency doctors need hospitals, and they need to have a team of nurses to help deliver care 24 hours a day, 365 days a year.

This is an expensive proposition, and a hospital must have a sufficient number of patients in each specialty to justify such services.

The health-care industry is engaging in the politics of fear in an effort t