Republican MalpracticeSenate Democrats, with the help of a couple of Republicans (Lindsey Graham (SC) and Sen. Richard C. Shelby (Ala.)), killed an Administration bill that would have capped medical malpractice awards at $250,000. Medical malpractice rates have been skyrocketing for some more risky medical professions, and the insurance industry, the AMA and strapped doctors are screaming that outrageous punitive judgments for "pain and suffering" are to blame.
The Republican leadership knew very well that it would lose the vote, but
Senate Republican Conference Chairman Rick Santorum (Pa.) told reporters earlier this week that GOP senators wanted to bring up the bill, even though they knew they would lose, to "turn up the heat back home on senators who are not being responsive to the problems in their own states."So what's the real story here? An article in the most recent American Prospect refutes many of the myths being propagated by the insurance industry and the Bush Administration.
First, rising premiums have little to do with giant awards fro pain and suffering.
But contrary to the administration's line, increasing jury awards are not single-handedly driving premiums through the roof. Rather, a steep decline in insurers' projected investment income is largely responsible for rising rates...And when investment income evaporates, it hits hard. Americans for Insurance Reform's J. Robert Hunter, an actuary and former Texas insurance commissioner, tracked premiums and insurance-industry investment returns over the last 30 years. He found that each of the three malpractice insurance "crises" directly coincided with declining insurance investment returns.Another myth is that awards for pain and suffering are not needed to compensate victims of malpractice.
But critics of caps insist that pain and suffering damages are necessary to deter careless medical practice and compensate for injuries such as blindness, disfigurement and the loss of sex function, which cannot be quantified in economic terms. Limiting these awards, they argue, will do nothing to reduce costs to doctors and will only trample patients' rights. Linda McDougal, the Minnesota woman whose breasts were mistakenly removed after she was incorrectly diagnosed with cancer because her files were mixed up with another patient's, suffered few quantifiable economic losses. She had health insurance, and her employer covered medical bills and lost wages. But "she will have to go through life mutilated for no reason," says Carlton Carl of the Association of Trial Lawyers of AmericaIt is also a myth that pain and suffering caps will bring malpractice rates down.
Remarkably enough, insurance companies don't even promise that a cap on lawsuits will solve the problem. In 2002, the American Insurance Association noted, "The insurance industry never promised that tort reform would achieve specific premium savings."Will insurance companies agree to reduce their premiums by one dollar for every dollar they save as a result of tort reform? Don't bet the practice on it.
So, what is to be done?
Far more effective than an arbitrary cap on damages would be a more systematic effort to weed out bad doctors and prevent malpractice in the first place. Dr. Sidney Wolfe, director of Public Citizen's Health Research Group, says, "You should protect patients with doctor discipline and protect good doctors with low premiums." Public Citizen ranks state medical boards according to their records of disciplining negligent doctors. "Five percent of the doctors account for 50 percent of the malpractice payouts," he says. "The primary failing is at disciplining doctors. A lot could be remedied by taking bad doctors out of practice."And there are other remedies:
AMA President-elect Dr. Donald Palmisano concedes that other remedies are available. In Massachusetts, Indiana and Louisiana, malpractice lawsuits undergo a pre-screening process, substantially reducing the number of questionable lawsuits without restricting the rights of patients to sue.The great danger is that
If the AMA succeeds in passing a $250,000 cap without a provision forcing insurance companies to pass their savings on to doctors, rates may well continue to climb, in which case growing numbers of obstetricians will stop delivering babies, more neurosurgeons will retire early or shy away from risky procedures, and more mutilated patients will be denied compensation.Bottom line: The Republicans are really interested in two things: helping their insurance industry friends and curtailing the power (and money) of trail lawyers who donate overwhelmingly to Democrats, especially to former trial lawyer (and current Presidential Candidate) John Edwards of North Carolina.