Malpractice caps need to be studied

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Spokane Spokesman Review

Hospitals and medical associations in Washington have identified a cancer — rising insurance premiums for doctors — and they want the Legislature to perform radical tort surgery to remove it.

Tort reform proponents say “runaway juries” and “jackpot justice” are forcing insurance companies to raise premiums and are driving doctors into other states or out of business. Premiums from the state’s two largest malpractice insurers are increasing steeply this year — 17 percent on average at Physicians Insurance Co., and 30 percent at The Doctors’ Company. Specialties such as obstetrics and trauma surgery are experiencing even more dramatic climbs.

As a model for tort reform, advocates point to California, which in 1975 imposed a $250,000 cap on non-economic damages, better known as “pain and suffering.” Since then, premiums have risen 500 percent nationwide but only 167 percent in California, according to Physicians Insurance.

But consumer groups counter that California adopted comprehensive insurance reform in 1988 and that stopped the escalation in malpractice premiums. Proposition 103 rolled back rates 20 percent, refunded money to policyholders and forced insurers to open their books to justify rate


Washington state Insurance Commissioner Mike Kreidler is skeptical about the effect caps would have on insurance premiums, noting that there are other cost drivers.

Michigan, West Virginia and Missouri have malpractice caps and higher insurance premiums than Washington.

The Washington Medical Association concedes that premiums would continue to rise — albeit more predictably — with a cap on damages. Insurance analysts say that investment losses and rising health costs are other reasons insurers have had to raise rates.

The number of malpractice cases in Washington state has remained flat over the past decade, but juries have been more liberal in awarding damages. When asked for examples of egregious jury awards, the Washington State Medical Association had some difficulty producing them. The largest one they inevitably provided concerned a non-medical accident. They did not mention a

$16.2million verdict (currently on appeal) in which a young woman’s uterus and part of a lung were removed after a false cancer diagnosis.

Such medical errors are all too common, as a 1999 Institutes of Medicine study has shown. Any effort to ease tort pressures should be coupled with more aggressive measures to weed out bad doctors. The consumer group Public Citizen notes that 5 percent of doctors are responsible for half of all malpractice claims.

Lawmakers should also demand that insurance companies open their books, so unbiased data can be compiled before any laws are changed.

And they should also consider whether a cap of $250,000 — an amount that hasn’t budged in 28 years in California — would preclude people from hiring attorneys to pursue legitimate claims in court. Many states have higher caps and index them to inflation or other economic measures.

We are concerned about access to doctors in certain specialties and urge the state to pursue short-term relief. But we think the Legislature needs to conduct a comprehensive study of the issue before altering the state constitution and diminishing the traditional role of juries in our justice system.

Consumer Watchdog
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