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Read Making a Killing

home / healthcare / in the media

Canadian Business & Current Affairs Medical Post
Jan 28, 2003

by Doug Payne

Bush: 'Frivolous and junk lawsuits' must end

Doctors across the U.S. take job action against skyrocketing insurance rates
WASHINGTON, D.C. - U.S. doctors' actions over malpractice insurance are spreading, with protests underway in several states.

President George W. Bush himself has waded into the debate with proposals for capping settlements. The president, speaking recently in Pennsylvania, said ''frivolous and junk lawsuits'' are behind soaring health-care costs and doctor shortages, and that limiting jury awards in medical malpractice suits is the way to solve the problem.

''The problem of those unnecessary costs isn't in the waiting room or the operating room. It's in the courtroom,'' he said.

Bush proposed a limit of $250,000 in non-economic damage awards--mostly for ''pain and suffering''--and an undefined, ''reasonable'' cap for punitive damages.

Bush's Deputy Press Secretary, Scott McClellan, said the president's intervention in the debate was based on his belief that ''we are in a medical liability crisis because excessive and abusive litigation is driving up costs, decreasing access to quality care, threatening patient safety and leading to a badly broken system.''

The presidential plan for reform was immediately welcomed by the Alliance of American Insurers. The group's president, Rodger Lawson, called the Bush proposals a ''solid step forward for the American health-care system and the American economy.''

The president's plan included many items supported by the alliance: it would also provide for payments of judgments over time rather than in a single, lump sum.

It would ensure old cases could not be brought forward years after an event. It would reduce the amount doctors must pay if a plaintiff has received other payments from an insurer to compensate for their losses. And it would provide that defendants pay judgments in proportion to their fault.

Bush spoke in Pennsylvania, where scores of hospitals were threatened with walkouts in January as doctors protested following a doubling last year of their premiums. The Pennsylvania Medical Society estimated 900 doctors have left the state since 2001 to avoid annual premiums now approaching, in some cases, $200,000 US.

Doctors in New Jersey, some of whom also faced 100% increases in premiums, announced they will engage in a partial work stoppage next month (starting Feb. 3 and possibly lasting for a week)--covering routine checkups, elective surgery and non-essential tests and services--to protest premium hikes.

About two dozen doctors at four hospitals in the northern Panhandle area of West Virginia walked off the job Jan. 1, for almost two weeks. Although most had returned to work while a reform bill moves through the state legislature, doctors in other areas of the state were threatening stoppages of service.

In Vermont, where the state medical society says doctors could be forced out of the profession, doctors have suggested a plan to reduce malpractice awards by encouraging out-of-court settlements.

In Massachusetts, doctors were renewing their legislative fight for a stricter limit on jury awards. At the behest of the Massachusetts Medical Society, several lawmakers proposed legislation establishing an absolute cap of $500,000 on jury awards.

In Connecticut, some doctors have stopped delivering babies because of spiralling insurance costs.

In Las Vegas, 10% of practising physicians were expected to leave in the face of escalating premiums, or practice without insurance.

In Broward County, Fla., 14 of 16 neurosurgeons practise without insurance, either because they could not find it or afford it.

National picture

The American Medical Association says there are 12 ''crisis states'' where malpractice insurance hikes are forcing some doctors to move, retire early or restrict their practices.

Overall increases in hospital costs--along with the cost of prescription drugs--underlie much of the decade-high 8.7% growth in U.S. health spending in 2001.

In all, according to the American Hospital Association, about 20% of U.S. hospitals have had to reduce services because of higher insurance costs.

This comes after years of relative stability. Based on survey data involving companies insuring approximately 70% of U.S. physicians, average increases in premiums were approximately 25% for internists and general surgeons, and 20% for obstetricians and gynecologists.

The situation has been made more complicated for doctors by problems within the insurance industry itself. The St. Paul Companies of Minnesota, which covered 25% or more of physicians in 12 states, last year decided not to renew policies for 42,000 physicians across the country. The PHICO insurance company liquidated, leaving hundreds of Vermont physicians uninsured. Princeton Insurance Co. abandoned the medical liability market in Pennsylvania, leaving more than 1,000 physicians in the lurch.

However, Americans for Insurance Reform (AIR) said a comprehensive new study of medical malpractice insurance in Pennsylvania shows ''the causes of and solutions to this crisis lie not with the legal system but with the business practices of the insurance industry.''

The study by AIR, a coalition of more than 100 consumer and public interest groups representing more than 50 million people, made almost identical findings to those reached in a similar AIR study of national trends released in October 2001.

And one of the U.S.'s biggest non-profit, consumer groups -- The Foundation For Taxpayer and Consumer Rights (FTCR) -- was also on record as saying legislators should limit profiteering by malpractice insurers to reduce the malpractice premiums physicians pay, not restrict legal recovery by wronged patients.

The consumer group also called on the President and Congress to explore creating a national non-profit medical malpractice insurance plan similar to the national flood insurance.



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