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Lead Cap on malpractice awards under the microscope



Changes to State Law Would

Affect Insurance Rates

In June, fourth-year UCSD medical student Kendal Hamann will be one step closer to realizing her dream of becoming an internist.

When she becomes a resident doctor treating patients, Hamann’s chances of making the kind of mistake that could land her in a courtroom will also rise substantially.

Medical malpractice insurance provides coverage as a safeguard, but some carriers say if the frequency of lawsuits rise in California, higher insurance rates will follow.

And that is in spite of a California law ,the California Medical Injury Compensation Reform Act, or MICRA , that puts a $250,000 cap on damages for pain and suffering.

Doctors and some economists believe the cap has been effective in limiting the rise of medical malpractice premiums. In other states, doctors pay double or triple the premiums of their California colleagues.


– Insurance Rates Lower In California

According to the Californians Allied for Patient Protection in Sacramento, which opposes lifting the law, internists practicing in California paid $8,468 on average for malpractice insurance last year.

That compares to an average annual premium of $24,338 for their counterparts in Florida, Michigan, New York, Illinois and Texas.

Nationwide, specialists such as gynecologists, neurosurgeons and obstetricians pay the highest premiums to parallel their increased risk of being sued.

But for most medical students, insurance rates are the last thing on their minds when choosing a career, Hamann said.

In Sacramento, by contrast, the cap continues to be fiercely debated.

California established a $250,000 cap on damages for pain and suffering in 1975 after medical malpractice insurance rates skyrocketed.

Advocates of the California law, mostly doctors and insurers, said changes in the law would prompt spiraling health care costs and insurance rates.

Critics, such as trial lawyers and consumer groups, call the cap a “one-size-fits-all” solution that doesn’t account for inflation and the declining quality of health care.


– Limits Deter Lawyers, Patients

Kenneth Sigelman, a San Diego-based trial attorney who is also a medical doctor, said the cap deters lawyers from representing patients.

The high cost of litigation, in turn, discourages patients from filing lawsuits in the first place, he said.

“The trend nationally has not been an increase in medical malpractice lawsuits, but an increase in one business suing another business,” Sigelman said.

But insurers see it differently.

Ana Tolerico-Lyon, a principal at the La Jolla-based insurance firm Barney & Barney, said malpractice rates jumped some 35 percent between 1999 to 2000. She blames more lawsuits and higher awards for the rise.

Tolerico-Lyon couldn’t cite possible reasons for the higher frequency of patients suing doctors, but said frivolous suits are common.

More recently, radiologists have been the targets of lawsuits, carriers say. Many cases involve failure to diagnose breast and colon cancer, she said.

If the trend continues, San Diego-based radiologists may no longer enjoy the relatively low premiums of $7,500 a year, she said.


– Local Doctors Pay Low Premiums

Richard H. Schweickert, president of the brokerage firm Schweickert & Co. in Costa Mesa, said San Diego doctors pay the lowest premiums in the state.

Medical malpractice rates are higher in Los Angeles and in San Francisco, because of more lawsuits.

Schweickert, who provides coverage for 500 anesthesiologists, said he sees between 50 and 70 claims every year.

“Between 10 and 15 percent of doctors get some lawsuit every year,” he said. “Some go away some of them are pretty big.”

According to a survey by the Californians Allied for Patient Protection, total indemnity awards rose fourfold between 1998 and 1999, from $40.5 million to $153.8 million. The number of cases with more than $1 million indemnity awards climbed 15 percent, from 33 in 1998 to 38 in 1999.

Nearly half of all incidents occurred in hospitals and more than $63 million was awarded in 16 birth injury cases, the report said.

That’s because everybody expects a perfect baby, Schweickert said. “And if anything goes wrong, (people) sue.”


– Mistakes Are Bound To Happen

But even doctors with superb credentials can make mistakes, Sigelman said. Familiar patterns of tragic events and allegations include doctors’ failing to respond in time to decreased fetal movement, not arriving in time when the fetal monitor signals trouble, or entire surgical crews being unavailable for an emergency Cesarean section, the survey showed.

Sigelman blames managed care for the declining standard of care.

“We see situations where medical problems are not investigated in a timely manner things fall through the cracks that shouldn’t,” he said.

He said most errors that harm patients occur out of “omission,” not “commission.”

In the managed-care climate, doctors are faced with stricter time constraints and high levels of bureaucracy. Inappropriate referrals and discouragement of sufficient tests also rank among the culprits of managed care, he said.

Randall R. Bovbjerg, author of a book on medical malpractice policy and a principal research associate at the Urban Institute, said out of the tens of thousands of patients that die nationwide or are harmed each year from medical mistakes, few people actually sue.


– Patients Often Lose Their Cases

In more than two-thirds of malpractice cases, insurers and researchers say, patients receive no money. For those people who win malpractice cases, compensation tends to be relatively meager, according to published reports.

Sigelman said while some cases showed significant awards, others had to be cut substantially because of the created caps on damages.

Trial lawyers want to raise the cap and make information about medical errors available to the public, so that negligent parties can be held responsible for their mistakes, he said.

In 1999, Assembly Speaker Antonio Villaraigosa, D-Los Angeles, sponsored a bill to raise the cap to $760,000, and ran into a roadblock.

But Sigelman said MICRA reform remains a high priority for the Consumer Attorneys of California. Legislators, however, may put it on the back burner because of the state’s utility crisis, he said.

Meanwhile, some tort reform opponents believe trial lawyers eventually will win.

“I think changes in MICRA are probably inevitable,” Schweickert said.

But there will be economic hardships, he said.

Moderate changes, however, would not lead to a drastic hike in insurance rates , 10 percent at the most, he added.

Hamann said if insurance rates climbed, she would expect her salary to increase accordingly.

She said it’s unlikely tort reform would drive her out of the state, but it would entice her to take a more “defensive” approach to practicing medicine.

That includes potentially ordering unnecessary tests to help predict outcomes. One of the biggest problems in medicine is that people want guarantees to outcomes, she said.

“People become so focused on technology and science they don’t realize that bad outcomes happen, because we are human beings,” she said. “When that happens, they feel let down by technology.”

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