Voters Have Say In Doctor-Lawyer Battle Over Malpractice Cap

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Nearly 40 years ago, Gov. Jerry Brown signed a law to help stem spiraling costs for medical malpractice insurance policies in California.

Brown would later describe the situation at the time as dire: Doctors were forced to “go bare” because they couldn’t afford insurance. Some stopped providing high-risk procedures. Others threatened to quit their jobs.

The law established the current $250,000 cap on pain-and-suffering awards in malpractice cases, and spawned a feud that has raged ever since between medical doctors and trial attorneys.

The limit was upheld by the courts, and the lawyers’ lobby for decades has been trying to push through an increase. Efforts to raise it by such leaders as then-Assembly Speaker Antonio Villaraigosa and former Sen. President Pro Tem Darrell Steinberg ultimately proved unsuccessful.

“It is so bad in the Capitol, we tried and nobody would even introduce legislation because they didn’t want to buck the people who would raise $58 million against us,” said Jamie Court, the president of Santa Monica-based Consumer Watchdog. “These are the most powerful, prolific givers in Sacramento.”

The matter is now before voters as a complex and multifaceted initiative that would raise the limit to $1.1 million and adjust it annually to reflect increases in inflation. Proposition 46 would also mandate random drug and alcohol testing of doctors and require health care practitioners to check a state prescription drug history database before prescribing certain drugs.

Proponents contend their measure will save lives by deterring medical negligence, stepping up enforcement of prescription drug abuse and protecting patients from impaired doctors. Opponents cast the drug testing and prescription drug provisions as cynical ploys designed to mask the real intent of the measure – raising the cap – which they argue will force doctors and medical professionals to quit or move to states with lower medical malpractice insurance premiums.

From the start, they have painted the measure as a undignified effort by greedy trial lawyers to reap millions for more medical lawsuits and higher jury awards. While the proposal retains the 15 percent ceiling on attorneys’ fees, amounts collected by lawyers would conceivably increase because the total awards would grow. Central to their campaign is the independent financial analysis predicting that raising the cap would likely increase total health care spending by 0.1 to 0.5 percent. That rise could amount to several hundred million dollars annually for state and local government.

The contest is among this election cycle’s most costly, playing out on television, radio and in mailboxes statewide.

Proponents launched the campaign by mailing out cadaver toe tags to voters and legislators’ offices, saying they are needed because of preventable medical errors. Consumer Watchdog sent postcards to neighbors of the former head of a doctors’ lobbying group incorrectly suggesting his patients died of prescription drug overdoses.

Jason Kinney, the spokesman for the opposition, said the stunts demonstrate that the group advancing the initiative was never serious about compromising.

“What you don’t do is start the conversation by dropping toe tags that you put on corpses in the legislators’ offices and blame the doctors for the deaths of numerous people,” he said. “You don’t send postcards to (the doctor’s) neighbors saying that he has drug and alcohol problems.”

Funded largely by insurance companies and medical groups, opponents have amassed more than $57 million to blanket the airwaves. The medical association offered doctors campaign buttons and bumper stickers to “educate their patients about this dangerous measure.”

While the opposition campaign has been aggressive in its TV campaign – in one ad describing the government-run drug history database as vulnerable to hackers and identity thieves – they say it’s a balancing act between trying to find economic justice for victims and working to protect costs for everybody else. Asked if there was any room to compromise, former California Medical Association president Paul Phinney said, “Based on this initiative, there isn’t.”

“Doctors want patients who are victims of medical misfortune to be adequately compensated,” Phinney told The Sacramento Bee. “In our view, they have been so far.”

Phinney said even under the 1975 law, the Medical Injury Compensation Reform Act, patients have been eligible to collect past and future lost wages, medical costs and unlimited punitive damages. He said average total awards have outpaced inflation by 2.5 times over the past four decades.

Other opponents say they worry that doctors could stop practicing or take lower-risk patients if medical malpractice premiums rise.

Kathy Kneer, president and chief executive of Planned Parenthood Affiliates of California, said she’s concerned about the effect on her patients who are largely on Medi-Cal, the state public-funding program for low-income individuals.

California OB/GYNs today deliver about 230 babies a year, she said. If one changes their practice because of higher premiums, someone would have to pick up the births.

“We’re really worried about how women are going to be able to access the high-risk obstetrical care, have quality health care that a normal pregnancy should have,” Kneer said.

Bob Pack, the proponent of the measure, comes from a different point of view. The Troy and Alana Pack Patient Safety Act was named for his 10- and 7-year-old children, who were hit and killed by a drug-impaired motorist while on a walk with their mother 11 years ago. She survived, but lost their unborn twins following the crash. The driver, later convicted of second-degree murder, was obtaining pain and other drugs from six doctors all working in the same HMO, Pack said.

Pack said an investigation found doctors didn’t share a medical file and didn’t communicate with each other. Pack sat down with nine different attorneys who all told him about the $250,000 cap – “and I was dumbfounded.” “What, my children are limited to $250,000 value?” he remembered saying. Because the elderly, children or stay-at-home parents don’t have incomes that can be easily accounted for under economic damages, Pack has come to believe the cap arbitrarily discriminates against many people.

“You want to pursue your rights to get judicial justice,” he said. “You want closure, and you want to feel like there’s some accountability that’s acknowledged.”

Lesley Ann Clement, an elder-abuse attorney in Sacramento, said the $250,000 cap has “effectively eliminated any kind of accountability for the industry.” She said once medical experts, private investigators and court fees are accounted for, there’s “no way it’s workable for the client.”

“I have to turn people away all the time. It’s so sad, and it’s totally unjust,” Clement said.

“And they talk about greedy trial lawyers?” she added. “What average citizen can afford to fight against a multimillion-dollar industry in this state? Who is the voice of the people here? I represent people’s parents and grandparents; their spouses and their kids.”

Earlier this year, a Sacramento Superior Court jury in the liability phase of the trial awarded the family of Joan Boice $3.875 million for pain and suffering. But the judge had placed a $250,000 cap on the pain-and-suffering award because of the 39-year-old law. The case is on appeal.

More than half of the 50 states have limits on damages in medical malpractice cases. California’s cap is among the nation’s lowest, according to the American Medical Association. Earlier this year, the Supreme Court in Florida ruled the state’s cap on wrongful death noneconomic damages violated its Constitution.

Malpractice award limits have been overturned in several other states.

Medical malpractice insurance premiums last year ranged from $8,185 for those practicing internal medicine to $39,288 for obstetrics-gynecology in California, according to Medical Liability Monitor, which tracks the liability insurance market. In New York, which does not have a cap, premiums ranged from $35,883 for internists to $227,899 for OB/GYNs. Experts note that California has a unique rate-regulation scheme that also has helped keep doctor premiums down.

In New York, nearly $700 million was paid out in medical malpractice awards last year, according to the malpractice insurer Diederich Healthcare. Medical malpractice lawsuits paid out roughly $274 million in California.

Joanne Doroshow, executive director of the Center for Justice and Democracy at New York Law School, said caps in medical malpractice cases not only harm patients and their families, but also are ruining the health care system. Doroshow, a supporter of Proposition 46 who wishes the measure abolished California’s $250,000 cap altogether, cited a study by researchers at Northwestern University. It found no evidence that limiting medical malpractice lawsuits bends the health care cost curve, “except perhaps in the wrong direction.”

“We have found that the legal system, and whether or not there are caps, (has) nothing to do with rates,” Doroshow said.

Call Christopher Cadelago, Bee Capitol Bureau, (916) 326-5538. Follow him on Twitter @ccadelago.

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