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Health Care: Medical Liability Reform
Why do we need medical liability reform
- Lawsuits against doctors are growing in frequency. Half of all neurosurgeons and one-sixth of all physicians are sued every year. (1) This drives up the cost of liability insurance, particularly for high-risk specialties. For example, obstetricians in South Carolina often pay more than $40,000 a year for malpractice insurance.
- Most medical liability lawsuits don’t end in verdicts against doctors, and only 17% of suits filed involve real physician negligence.(2) But defending frivolous lawsuits is still expensive. On average it costs doctors and insurance companies more than $22,000 to defend a claim.
- Fewer medical students are choosing high-risk specialties like obstetrics and neurosurgery, and an increasing number of doctors are fleeing high-cost states. Rural areas in particular are finding it difficult to maintain access to critical specialists, and studies show that states with liability caps have more physicians than states that don’t.(3)
- The fear of getting sued drives many doctors to practice “defensive medicine.” When physicians order unnecessary tests and avoid performing necessary surgeries, the cost of healthcare increases and its quality decreases.
What are the arguments against medical liability reform?
- Some observers note that the malpractice premiums have been rising faster than jury awards, and they argue that insurance companies have raised premiums because the companies’ incomes from investments have fallen as interest rates have fallen. However, state reform laws have been shown to reduce premiums by an average of 17%. (4)
- Some critics argue that malpractice reform strips injured patients of important protections. However, most reform proposals cap only noneconomic damages, allowing for unlimited compensation for missed work and healthcare costs (see summary of H.R. 5 below).
- Some argue that reforms should be made at the state level and not at the federal level because tort law is the province of the states and not of the federal government.
What is the status of medical liability reform legislation?
- In July of 2005, the House passed the HEALTH Act (H.R. 5), a major medical liability reform bill. The Senate has yet to act on major medical liability reform legislation.
- H.R. 5 would impose a cap of $250,000 on noneconomic damages in any health care lawsuit, regardless of the number of parties. The bill would not cap economic damages.
- The bill would impose a cap on punitive damages of $250,000 or twice the economic damages awarded, whichever is greater. It would allow for punitive damages only if the defendant acted with malicious intent, or deliberately failed to avoid unnecessary injury
- H.R. 5 would impose a cap on contingent lawyers’ fees in medical malpractice cases. Lawyers could receive 40% of the first $50,000, 33 1/3% of the next $50,000, 25% of the next $500,000, and 15% after that.
- The bill would establish a statute of limitations for medical malpractice suits. Malpractice lawsuits would have to be filed within three years of the injury, or one year after discovery of the injury (whichever comes first).
- In April of 2005, South Carolina Governor Mark Sanford signed medical liability reform legislation that caps non-economic damages at $350,000.
In June 2007, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2007 (H.R. 2580) was introduced in the House, Inglis co-sponsored this bill.
H.R. 2580 sets conditions for lawsuits arising from health care liability claims regarding health care goods or services or any medical product affecting interstate commerce.
- H.R. 2580 sets a statute of limitations of three years after the date of manifestation of injury or one year after the claimant discovers the injury, with certain exceptions.
- H.R. 2580 provides that nothing in this Act limits recovery of the full amount of available economic damages. Limits noneconomic damages to $250,000. Makes each party liable only for the amount of damages directly proportional to such party's percentage of responsibility.
- H.R. 2580 allows the court to restrict the payment of attorney contingency fees. Limits the fees to a decreasing percentage based on the increasing value of the amount awarded.
- H.R. 2580 authorizes the award of punitive damages only where: (1) it is proven by clear and convincing evidence that a person acted with malicious intent to injure the claimant or deliberately failed to avoid unnecessary injury the claimant was substantially certain to suffer; and (2) compensatory damages are awarded. Limits punitive damages to the greater of two times the amount of economic damages or $250,000.
- H.R. 2580 denies punitive damages in the case of products approved, cleared, or licensed by the Food and Drug Administration (FDA), or otherwise considered in compliance with FDA standards.
On June 6, 2007 the bill was referred to the Subcommittee on Health where it awaited review.
On February 13, 2009, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2009 (H.R. 1086) was reintroduced in the House for the 111th Congress. The bill was referred to the House Energy and Commerce on the same day where it is currently awaiting review.
(1) Richard E. Anderson, M.D., “Defending the Practice of Medicine,” Archives of Internal Medicine, Vol. 164, No. 11 (June 14, 2004), p. 1174.
(2) David M. Studdert, Michelle M. Mello, and Troyen A. Brennan, “Medical Malpractice,” The New England Journal of Medicine, Vol. 350, No. 3 (January 15, 2004), p. 285.
(3) William E. Encinosa and Fred J. Hellinger, “ Have State Caps on Malpractice Awards Increased the Supply of Physicians?” Health Affairs Web Exclusive (May 31, 2005).
(4) Kenneth E. Thorpe, “ The Medical Malpractice ‘Crisis’: Recent Trends and The Impact of State Tort Reforms,” Health Affairs Web Exclusive (January 21, 2004).
Inglis Position:
I voted for HR 5. Patients injured by negligent doctors should have the ability to recover economic damages and receive reasonable awards for pain and suffering. However, medical liability reform is needed to ensure that doctors can afford to practice and patients have access to the specialists they need.
Steven Johnson (7/28/08)
Mr. Inglis, how does a cap of $250k for a child who becomes paralyzed at the hands of a surgeon prevent frivolous lawsuits? Is that fair for him? How about your paralyzed child? Aren't you simply protecting insurance companies? The GAO said medical lawsuits only account for 1/2 of 1% of ALL medical costs. Why is that so bad? When you or your company(ies) needs to sue someone, will you pledge to limit you or your family’s recovery to $250k?