Malpractice And Liability
- MALPRACTICE AND LIABILITY =========================
by Laura Harrison
Harrison Insurance Agency, Inc.
Houston, Texas
(713) 956-0710
In state after state, many groups of professionals — doctors, lawyers, accountants, directors and officers of corporations, and employees of hospitals, day care centers, school districts, municipal, county and state governments, and a wide variety of other economic enterprises — all report massive insurance premium increases, midterm changes in contract terms, policy renewal rejections, and an inability to find liability insurance at any price. The reason seems to be an increase in the number of malpractice suits and liability insurance rates.
Malpractice by definition means “bad practice,” not bad medical results, but many health consumers have come to feel they are entitled to a perfect outcome or a complete cure every time they see a doctor. A less-than-perfect result, however, does not constitute malpractice unless the physician has not exercised ordinary care and judgement. Actual malpractice includes a physician’s experimenting on a patient without his or her truly informed consent, using a procedure considered useless or counterproductive by the rest of the medical community, failing to warn about the possible adverse affects of a procedure or treatment, and treating the patient carelessly.
In recent years, many malpractice awards have been won because of the lax legal definition of malpractice. Some states, for example, now accept “wrongful conception” as grounds for a suit. Patients can sue doctors for physical and financial injuries arising from an improperly or negligently performed sterilization procedure. Doctors can even be sued for the cost of raising a healthy baby if the parents claim the child was unwanted.
No single reason exists for the dramatic increase in medical malpractice suits. Doctors, lawyers, insurance companies, and patients’ high expectations for the marvels of modern medicine are all involved — and all have a vested economic interest in resolving the problem. But until reason and self-direction take hold of an enlightened health care community and public, this senseless problem will probably continue.
Who Is To Blame?
The issue of who is to blame for the malpractice and liability crisis has plunged many doctors and lawyers into a dispute over high insurance costs, which threaten the careers of doctors and potentially the health of their patients.
According to an article in U.S. News and World Report, physicians claim that greedy lawyers and unjustifiable increases in insurance rates are driving them out of business. Some lawyers, on the other hand, claim the real problem is incompetent doctors. They believe doctors, like manufacturers and architects, should be liable for their mistakes. These same attorneys charge that because medical societies rarely drive out low quality practitioners, patients need the right to sue.
Malpractice and the Law
The Houston Chronicle recently reported on a legal ruling of the 1977 Texas law that limited all medical malpractice awards to $500,000. Judge Jerry Buchmeyer of Dallas claimed the law violated certain provisions in the Texas and U.S. constitutions that allow injured persons to recoup damages. He argued that the law unfairly discriminates against those malpractice victims who suffer the most since the law makes no distinction between slightly injured and permanently injured patients. Under this law, a jury can award damages up to the statutory limit to the slightly injured party, while a severely and permanently disabled person is entitled to no greater recompense. The Texas Supreme Court has not yet handed down a decision on this matter.
The medical profession, led by the American Medical Association (AMA), recently launched a publicity campaign for tort reform to solve this malpractice crisis. The AMA claims that large malpractice judgements are driving up the costs for malpractice insurance premiums — the fastest growing expense for physicians today — at an alarming rate, 79 percent between 1976 and 1984. These high premiums, according to the AMA, lead to shortages of physicians in high risk specialties and contribute substantially to the increasing cost of health care.
Because of these astronomical insurance premiums, many physicians have abandoned their high risk specialties. They feel that patients’ expectations of what they can accomplish may be too high and that when problems do occur, they are held responsible, even in situations where they have little control over the outcome. They argue further that although new technology and treatments do save lives, as with anything new, risk is involved and the results are not always perfect.
How Do Doctors Cope With the High Costs?
To pay for the costs of sky-high malpractice insurance premiums, doctors must either increase their fees and their patient load (and thereby decrease the time spent per patient), or if worse comes to worst, abandon their practice altogether.
Some physicians attempt to shield their assets by transferring them to their families and by self-insuring. Others have opted to carry no malpractice insurance at all, hoping to discourage malpractice “claim-seekers” who look for high malpractice insurance settlements. Some who have previously carried expensive premiums with low deductibles are now paying higher deductibles to keep premium costs at a more reasonable level.
Why Are Premiums So High?
The State Board of Insurance approved a 104.7 percent rate increase for new primary coverage policies for physicians, effective September 1, 1986. Policy renewals are given 90 days advance notice of the increase. Insurance companies claim that these high rates reflect an increase in the number of suits and the size of awards. Furthermore, they claim that predicting losses is more difficult now than ever before, one reason being that claims are turning up long after the policy covering the period in question has expired.
Can Tort Reform Help?
Tort reform may help some if the number of huge judgements can be reduced. More predictability in the judgements of the lawsuits would make it far easier for the insurance system to work properly. This is true for someone who is self-insured or for someone who buys commercial insurance. And since the self-insured are just as vulnerable to the uncertainties of the legal system as are the insurance companies, everyone has a stake in this issue.
Giant judgments create a continuing cost in the system through their intimidating nature. Over the last decade, the average jury award jumped over 250 percent, from $94,947 to $338,000. From 1984 to 1985 alone, awards rose from $4 million to $8.7 million, according to the Texas Medical Liability Underwriting Association. Seventy-one plaintiffs won judgements of over one million dollars in 1984, while only three were awarded in 1975. Of the claims over the $100,000 level, damages for pain and suffering or mental anquish accounted for 80 percent.
The insurance adjustor is aware that once in a while there will be a huge award, and it may cause the company to offer more money than equity would demand or to overlook the defenses. When the adjustor is concerned about being involved in a huge claim, it creates a cross-purpose between the insured and the insurance companies. Evolution of the tort system that has occurred through case law and court decision rather than by legislation has brought about an environment that is chilling to adjustors because when bad things happen, they happen in very large numbers.
Is Tort Reform Needed?
The movement for “tort reform” can be felt across the country, and many people have uncritically accepted the notion that tort reform is the answer to the current malpractice insurance crisis. Many believe that judges, lawyers and victims are causing a “litigation explosion,” that too many lawsuits and enormous verdicts are bankrupting the tort system, and that if a solution is not found immediately, all is doomed.
How Did This Tort System Evolve?
The current tort system began under English common law as a peaceful way of resolving disputes between injured or aggrieved individuals and their accused.
Although historically the tort system underwent many changes, by the twentieth century, the old rules and regulations were intolerable. As a nation, Americans experienced a tremendous increase in knowledge, which in turn lead to greater expectations and increased demands for accountability of wrongdoings. Many old issues that protected certain portions of society from responsibility for their own mistakes — rationalizations such as contributory negligence, lack of access to the courts, and assumption of risk — came under fire, and the inevitable tort revolution began.
Although the “liability crisis” cannot possibly be solved easily, many people believe tort reform is needed to bring an end to this problem.
Supporters of tort reform are pushing for a comprehensive approach that includes the following elements:
-limited “joint and several” liability. In most states, including Texas, when a plaintiff proves he was injured by the acts of several defendants, each is liable for the plaintiff’s injuries. If one defendant cannot pay his share, the other defendants — especially the ones with the “deepest pockets” but not necessarily the greatest fault — must pay this amount in addition to their own shares.
-limited “pain and suffering” awards. Many courts award pain and suffering judgements as well as economic losses.
-limited contingency fees for lawyers
-a limit on the “collateral source” rule. This rule says the defendant cannot benefit from the fact that the plaintiff may have been paid from another source.
-limited lump-sum payments and allowed periodic payments
Other related proposals include the following:
-insurance fees based on a doctor’s individual record. Higher rates for physicians with many malpractice judgements could mean lower rates for competent physicians and could even price inept doctors out of the market.
-pre-trial panels to rule on the merits of proposed malpractice suits
-the abolishment of punitive damage awards
-the curbing of lawyers’ fees
-establishing expert panels to screen out “frivolous” claims
Obtaining Malpractice Insurance
Many physicians believe adequate malpractice insurance is impossible to obtain at a reasonable price. However, there are ways for you, the physician, to control the premium:
-Anticipate a substantial increase in the premium on renewal of your malpractice policy. Do not wait until the last minute to begin exploring your options. Shop around and give yourself plenty of time.
-Know what you are buying. Price comparison is not sufficient. Consider the various provisions contained in each carrier’s policy.
-Complete all applications correctly. Failure to fill out each blank will only cause you further delay.
Top Ten Claims
The following list of the ten most frequent malpractice claims and average payment for each is based on a study by the St. Paul Companies from 1979 to 1983. Amounts reflect all claims filed, including million-dollar suits and suits where no money was received by the patient. About two-thirds of all the claims were closed without payment.
Allegations and Average Award
surgery: post operative complications/ $28,802 improper treatment: birth related/ $77,863 surgery: inadvertent act/ $26,519
failure to diagnose: cancer/ $43,644
surgery: inappropriate procedure/ $31,648 failure to diagnose: dislocation or fracture/ $17,081 improper treatment: drug side-effect/ $30,478 improper treatment: dislocation or fracture/ $18,547 failure to diagnose: pregnancy problems/ $33,190 failure to diagnose: infection/ $47,895
Conclusion
There is no single “cure” for the liability crisis. Reform is needed in both the legal and medical systems if either is to fulfill its obligations to society. Improved regulatory control over insurer costs and rates is also needed.
However, if suing for malpractice is made less financially attractive to patients and if committing malpractice results in professional suicide for physicians, perhaps today’s story of a medical miracle will not become tomorrow’s story of an astronomical malpractice award.