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Read Making a Killing

home / healthcare / in the media

The Sacramento Bee
Jan 17, 2003

by David Whitney -- Bee Washington Bureau

Bush likes California medical suit law

WASHINGTON -- President Bush stepped up his campaign for a federal law capping pain-and-suffering judgments in medical malpractice cases Thursday, and California Sen. Dianne Feinstein declared herself his ally in what is certain to be a bruising battle in the Senate this year.

In a speech at the University of Scranton in Pennsylvania, Bush cited California's 1975 law limiting pain-and-suffering awards in malpractice lawsuits to a maximum of $250,000 as something he'd like to see emulated nationally.

"Reports from Philadelphia say that juries there have awarded more in malpractice damages than the entire state of California did over the last three years," Bush said. "California's law is what the people in your statehouse ought to look at."

Later, Feinstein said she is working on legislation mirroring the California law, and will soon introduce it in the Senate.

Escalating jury awards are blamed by the American Medical Association for skyrocketing malpractice insurance costs that, in a growing number of instances, are causing doctors to leave certain medical specialties.

Surgeons at several West Virginia hospitals stopped work New Year's Day to protest climbing insurance costs, but most have returned since their state Legislature approved reform legislation. In Pennsylvania, hospitals feared a similar walkout by doctors facing 100 percent increases in premiums.

"We're a litigious society," Bush said. "Everybody is suing, it seems. There are too many lawsuits in America, and there are too many lawsuits filed against doctors and hospitals without merit."

Feinstein said she agreed with much of Bush's speech.

"There is no question about malpractice," she said. "Before 1975, California had one of the highest malpractice insurance rates in the country."

In 1975, the state enacted the Medical Injury Compensation Reform Act that capped pain-and-suffering judgments at $250,000. While the state law still permits punitive damages awards, there must be proof of malice or fraud.

There is no limit on how much juries can award patients for economic damages such as medical expenses and loss of earnings. The state law also allows jury awards of $50,000 or more to be paid out in installments over several years instead of one lump sum.

Cases filed in California are also subject to caps on legal fees. The percentage of jury awards allowed for attorney fees decreases as the settlement increases, with lawyers collecting only 15 percent of any award of $600,000 or more.

According to the California Medical Association, the state law has kept physician insurance rates considerably lower than in most other states.

The association said the 2002 rates for a Los Angeles neurosurgeon, the most risky medical field, was $68,436 -- roughly a quarter of the $278,829 a similar surgeon would have paid in Miami last year and less than half of what a Long Island neurosurgeon would have paid.

On average, across a range of medical specialties, the CMA said Los Angeles doctors paid about $42,279 less than their counterparts in Florida, Michigan and New York last year.

But the California Foundation for Taxpayer and Consumer Rights said Thursday that Feinstein and the White House are wrong, and that the 1975 law is not what has held down malpractice rates in the state.

Rates continued to rise even after the 1975 law until voters approved a 1988 insurance reform referendum, Proposition 103, which it said Feinstein opposed.

CMA President John Whitelaw, a Sacramento obstetrician-gynecologist, said many other states are looking at the 1975 law as a model for reform.

"This would be a tremendous leap forward for patients, health care and physicians and end a real threat to patient access to care," he said. "I applaud the effort by the president and support the bill introduced by Senator Feinstein."

But Feinstein's support of reform is at odds with other prominent Senate Democrats, including Ted Kennedy of Massachusetts, John Edwards of North Carolina, Patrick Leahy of Vermont and Richard Durbin of Illinois.

"The main cause of the current malpractice crisis can be found not in the courts but the insurance industry," the four said in a letter Wednesday to the president. "The industry creates a 'malpractice crisis' whenever its investments do poorly."

While most Republicans are likely to side with the president in the malpractice debate, most Democrats probably won't. Kennedy is the senior Democrat on the Senate Health, Education and Labor Committee; Leahy is the senior Democrat on the Judiciary Committee, and Edwards, formerly a trial lawyer, is seeking the Democratic nomination to oppose Bush in 2004.

Feinstein's four colleagues said the White House should be looking to tougher regulation of the insurance industry as the best method for controlling malpractice insurance rates.

Malpractice insurance reform is hotly opposed by the American Trial Lawyers Association, whose political action committee is a major supporter of Democrats. Last July, when the Senate was under Democratic control, Democrats voted unanimously to block legislation to cap jury awards.

This year Republicans hold a one-seat majority, and Senate Republican leader Bill Frist of Tennessee is the chamber's only medical doctor. If Feinstein's legislation were to become the bill taken up by the chamber, she could find herself battling her own Democratic caucus on an issue that easily could show up in the 2004 presidential elections.

Feinstein said Thursday that she thinks doctor walkouts around the country will have an impact on the Senate debate this year.

"For example, in the state of Nevada, directly adjacent to California, ob-gyns are leaving the state because of the cost of malpractice insurance," she said in a CNN interview.

"So each year, more states that do not have a balanced (law like California) are finding that they are losing their physicians," she said. "So I think the dynamic is changing in the Senate."



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