BACKGROUND: The issue of tort reform has gained increasing attention recently as more doctors say high malpractice insurance rates are forcing them to quit their practice, move to other states, or practice without insurance.
Tort reform, the solution advocated by doctors and insurance companies and many politicians including President Bush, would put a cap on non-economic damages, the "pain and suffering" verdict, that is given to patients who win malpractice lawsuits. The cap proposed is $250,000.
According to speech made by President Bush and many others who are after the national reform, only by getting control over the jury verdicts will the insurance companies be able to lower their rates charged to doctors. An argument by the American Medical Association says in 2001 eight states saw two or more insurers raise rates by at least 30 percent.
Physicians in more than 12 states saw one or more insurers take a 25 percent or higher increase. Especially hard hit are specialties such as obstetrics and neurology. Many OB/GYNs are refusing to deliver babies and a number of areas are finding themselves without neurologists.
The St. Paul Company, the country's largest malpractice insurer, announced in 2001 that it would no longer write medical liability policies. In Miami, one of the hardest hit areas, obstetricians are paying as much as $210,000 for insurance.
The states feeling the crunch, according to the AMA are Florida, Georgia, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Washington, West Virginia.
TORT REFORM IN CALIFORNIA: In 1975, California passed a tort reform that limits the non-economic verdict to $250,000. This is the model the President is following with his recommendations for a national reform.
According to industry data, total premiums in California nearly tripled in the first 12 years after the law was enacted before finally stabilizing in the late 80s.
According to Robert Corlin, M.D., a gastroenterologist in California and immediate past President of the AMA, premiums in California are a quarter of what they are in South Florida and West Virginia. In addition, he says doctors in California are not being forced to close their doors as they are in other states.
THE OTHER SIDE: Many fear tort reform will not help the problem and will only hurt patients more. For one, the argument is that insurance companies have never come out and said that they will lower their rates if a cap is put in place.
Critics of tort reform also argue that the problem is not rising numbers of lawsuits, but instead it is a problem of bad investments and the drop in stocks on Wall Street that have impacted insurance companies and their rise in rates is only their way of making up for losses.
Jamie Court, of Citizens for Taxpayer and Consumer Rights, says the only reason insurance costs have remained low in California is because they passed Proposition 103, which controls insurance rates for all insurance, such as homeowners, care and malpractice.
Critics also argue that the verdicts have not escalated as much as doctors say. According to the National Practitioner Data Bank, the average judgment against doctors roes only 8.5 percent from 1996 to 1999, only 2.1 if adjusted for inflation.
OTHER OPTIONS?: Critics suggest looking to more options like California's Proposition 103 to put stricter controls on insurance companies. Also, critics say, like with car insurances, doctors who are found to have been negligent and injured patients should see their rates go up while doctors with clean records have theirs remain low.
FOR MORE INFORMATION, PLEASE CONTACT:
Health Care Liability Alliance
American Medical Association
Department of News & Information
515 N. State Street
Chicago, Illinois 60610
American Tort Reform Association