Skyrocketing malpractice premiums are driving Missouri medical practices across the state line into Kansas. Governor Holden vetoed last year's tort-reform bill, but this year's bill could help stanch the flow of disaffected doctors.
Why did the doctor cross the road? The question--and it's really not a joke--is why are so many Missouri doctors crossing State Line Road, moving their practices into Kansas? The "punch" line: Missouri legislators can't seem to get on the same side of medical malpractice tort reform.
Tort reform has become a partisan hot potato in Missouri. State republicans and business groups blame trial lawyers for the malpractice insurance mess. They believe that tort reform would cut out-rageous jury awards and curtail the skyrocketing malpractice insurance premiums that Missouri doctors pay. Republicans also tend to believe in across-the-board tort reform as a means to curb frivolous lawsuits in general.
Meanwhile, Missouri democrats blame insurance companies for raising malpractice premiums to pay for their bad investments in the stock and bond markets. Many democrats also blame insurance companies for perpetuating a myth about how placing caps on jury awards for insurance claims translates into lower malpractice premiums. Democrats tend to believe a tort-reform bill not only wouldn't result in lowered malpractice premiums but would keep many injured people from seeking justice.
Last year, Missouri Governor Bob Holden, who supports medical malpractice tort reform, vetoed the 2003 tort-reform bill because it also offered special protections for other business groups. "I worked to find a solution to the medical malpractice problem, but the leadership of the House and Senate expanded the bill into areas that had nothing to do with malpractice rates," Holden told The Kansas City Star.
This year's tort-reform bill is said to have a better chance of becoming law. The bill, now in committee, would provide a single cap on non-economic damages in medical malpractice cases of $350,000.
Gov. Holden called the 2003 version a bill "that wrapped itself in a white coat." "I want to see a bill that focuses on medical malpractice and medical malpractice alone," he said. The Missouri state House and Senate tried to override the governor's veto in August 2003, but came up two votes shy of the two-thirds majority needed.
Whether doctors blame insurance companies, partisan politics, or Governor Holden for the high malpractice insurance rates doesn't really matter. Missouri patients end up paying the price and they have the most to lose: access to a complete quality healthcare system. Unfortunately, partisan politics as usual is penalizing patients-- particularly those in Missouri's rural areas, who are having a harder time finding such specialists as neurologists and obstetricians.
When the major players are lawyers, politicians and special-interest groups, it's not surprising to see Missouri change its game plan from "show-me" to "show me the money." The problem is that they're all playing to win at the expense of Missouri citizens. The good news is that Missourians have a good change of winning better medical care, if this year's tort-reform passes. The bad news it that until there's a remedy, the crisis hurts everybody: doctors, patients and taxpayers.
"I believe tort reform has a good chance of passing this year," said Jim Kistler, Executive Vice President, Associated Industries of Missouri. Kistler says that overturning the Scott Decision is the biggest tort-reform issue for his association's 12,000 members, which employs nearly 325,000 workers statewide. Kistler said that for the most part his member companies are united on tort reform. "Our business members remain steadfastly in support of a unified reform package."
How High Malpractice Premiums Hurt Everybody
Why have premiums increased so dramatically? Insurance companies blame the Scott Decision--a January 2002 court decision that changed the amount of money a plaintiff could be awarded in a malpractice case. Before the Scott Decision, Missouri plaintiffs were limited to seeking the state's $557,000 malpractice cap (which rose to $565,000 in 2004) on awards for pain and suffering, or punitive damages. The cap amount was final on each case--no matter how many parties were involved. The Scott Decision, bolstered by a strong trial-lawyer lobby, mandated that the limit could be applied to each defendant. That means that now there is virtually no cap on medical malpractice lawsuits.
Insurance companies also blame a legal practice called "venue shopping" for compounding the Scott Decision. Venue shopping involves moving a trial to a court that is most likely to yield the largest verdict or settlement rather than one in the community where the injury occurred. For example, if a Johnson County Kansas doctor who's being sued also happens to have an office in Kansas City, Mo., the patient's lawyer can shop for a better, i.e., more "liberal" jury, in Kansas City, Mo. Considered somewhat more generous to victims than their surrounding towns, Kansas City and St. Louis are locations of choice for plaintiffs' attorneys and tend to attract more lawsuits.
As such, venue shopping has been both a stumbling block to reform and the major bone of contention between trial lawyers and insurers. Gov. Holden disagreed that venue shopping was causing problems when he vetoed the tort-reform bill. Holden believes doctors can receive protections from venue shopping not afforded to other industries. The governor also said that the bill would have produced wholesale revisions designed to shift civil-procedure burdens from defendants to the injured party. In the end, passage of this bill would make it more difficult for aggrieved parties to seek redress for civil breaches and even simple justice.
"The bottom line is that Missouri's healthcare system is in a state of crisis," says Travis Brown, a contract lobbyist who represents a variety of medical interests in Missouri. The crisis is about healthcare access and quality. Our medical system is out of balance. Insurance rates have doubled; doctors are retiring early."
Brown says that specialists, such as neurologists and obstetricians, were "canaries in cages"--that is, they were the first doctors to cross the state line into Kansas because of the high malpractice premiums. Brown explained that malpractice insurance increases hit obstetricians especially hard because patients' parents can sue for damages 18 to 21 years after birth through a policy clause called "tail coverage."
Missouri patients who live in remote rural areas suffer the most from a shortage of specialists. For example, patients in Clinton, Mo., can no longer find a neurologist nearby. Now, it takes a 20 to 30 minute helicopter ride to a hospital to find a head-trauma specialist. Meanwhile, it takes less than an hour for permanent damage to occur to a patient after a head injury. "So the patient's life is imperiled, he runs the risk of either dying or lapsing into a vegetable state and the state of Missouri pays," Brown said.
Brown blames the Scott Decision for the high price of practicing medicine. "It can inflate a malpractice verdict to several million dollars," he said. "It's the reason doctors are leaving Kansas City to practice in Johnson County. It's all just because of the high cost of medical malpractice premiums in Missouri." Brown says that other states have come through the crisis stage, but that most states that were in a crisis have passed tort-reform laws to protect patients.
The majority of the medical community wants the tort reform bill to address just medical tort-reform. Every major medical association, including doctors, hospitals, healthcare groups, supports a 2004 bill focused on just medicine. Surprisingly, even most defense lawyers support Missouri malpractice tort reform--with the probable exception of those trial lawyers that advertise on late night and daytime TV shows.
Even the staunchest tort-reform advocates believe that doctors and insurance companies should pay patients for bad medical treatment. Writing in the March 2003 issue of Ingram's magazine, Dr. Paul Camarata, a practicing physician at the Kansas City Neurosurgery Group said, "Patients need to be fairly compen-sated for wrongs done, but insurance is not a magical, limitless lottery. It would be wonderful to make every victim of malpractice a millionaire, but the healthcare system simply cannot sustain that. If our society wishes to continue to pay out exorbitant awards, it will need to accept exorbitant premiums. Exorbitant premiums mean exorbitant escalation in the cost of health care, which will soon result in dramatic decreases in access to critical medical care."
Even if a doctor wins a groundless liability case, his or her insurance rates still rise and they must spend thousands of dollars on defense costs. Consequently, rate increases are averaging 20%; some states and regions are experiencing increases of 30% to 75%, such as in Nevada (35%), Mississippi (35%), Washington (55%), Oregon (56%), Pennsylvania (77%), and Ohio (60%).
Often, high-malpractice-rate states border on states with low malpractice rates. The difference in insurance rates, state-by-state, varies all over the map. For instance, according to one malpractice insurance company, the average estimated coverage for an Oklahoma general surgeon, based on a $1 million/$3 million limit, is $6,256. In contrast, the average rate for a Missouri general surgeon, with identical coverage is $25,195.
Would Lowering Jury-Awards Reduce Malpractice Rates?
Interestingly, and reflecting a nationwide trend, large jury awards to individual plaintiffs in the state of Missouri actually dropped substantially in 2003--to the lowest level since 1997. In 2003 the 10 largest verdicts totaled $99.6 million--approximately 5% of the $2.35 billion total in 2002--according to Missouri Lawyer's Weekly. After subtracting 2002's incredible $2.2 billion verdict (because of the Robert Courtney's evil cancer-drug-dilution-scheme pharmaceutical case), the 2003 total was still $56 million lower than the previous year. The largest in 2003 was a $30 million verdict: the McCormack v. Capital Electric electrocution case.
Many state officials argue that reducing the cap on insurance claims wouldn't save much or lower doctor's sky-high malpractice policies because lawyers would continue to find ways around the jury-award caps. "We found that there would be no significant savings in lowering medical malpractice from the present cap of $565,000 to $200,000," said Brent Kabler, PhD., Statistics Section Manager, Missouri Department of Insurance (MDI).
"We've done work on calculating a valid estimate for cost reduction and found there wouldn't be a significant savings in lowered medical malpractice from the present cap of $565,000 to $200,000," he said. "Only about 10% savings would be realized, which isn't much considering the 50% to 60% annual increase in insurance premiums." Kabler said that the estimate did not include various factors--for instance, attorneys' methods for getting around the caps.
Dr. Kabler said that insurance-money losses can be explained by two theories: 1. Because juries are more inclined toward large damage awards in medical malpractice cases; 2. Because of general inflationary trends, medical inflation, and wage inflation.
However statisticians spin the data, Missouri medical doctors are still mad. And they still blame Gov. Holden for vetoing the tort-reform bill. That's simply because physicians are paying for premium increases out of their own pockets.
In early February, The Kansas City Star reported that Gov. Holden, and the two other candidates vying to defeat him, met with more than 600 angry doctors at a political-action seminar in St. Louis to talk about meaningful tort reform. The gubernatorial candidates--Holden, fellow Democrat and State Auditor Claire McCaskill, and Secretary of State Matt Blunt, a Republican--all said they will support reform, including curbing excesses in the system and limiting or eliminating the practice of venue shopping.
To alleviate the situation, Governor Holden has proposed a plan to set up a temporary state-sponsored insurance plan for physicians until the industry becomes competitive again. His plan also would allow state regulators to reject insurance companies' premium hikes in some cases.
National Tort Reform-- a Partisan Issue
In the fall of 2003, President Bush began pushing Congress to limit damage awards in medical malpractice cases, arguing that lawsuits are sending malpractice insurance costs soaring so that shortages of doctors are occurring in many places.
"I have proposed reasonable limits on the lawsuits that are raising health care costs for everyone," Bush told the Associated Press. "We need to address the broader problems of frivolous litigation," Bush said. "We need effective legal reforms that will make sure that settlement money from class actions and other litigation goes to those harmed and not to trial lawyers."
During the last couple of decades, an American groundswell of popular dissent has arisen against lawyers and lawsuits. As a group, lawyers simply are no longer championed as the prestigious crusaders they once were in American popular culture. The "Perry Mason" days long gone. Even the "L.A. Law" days are over. TV sitcoms and late-night talk shows routinely ridicule such cases as McDonald's hot-coffee suit and fast-food obesity cases. The McDonald's case has become emblematic of frivolous and outrageous lawsuits for many people, and is often used as an example of the need for tort reform in the U.S. legal system.
The American Tort Reform Assoc-iation (ATRA) recently publicized the results of a poll it financed in which 800 respondents, across party lines, overwhelmingly agreed there are too many lawsuits, greedy lawyers are to blame, and they'd punish politicians who did not vote for reform by voting against them.
"Specifically, 83% of those polled agreed there are too many lawsuits in America, and 45% support tort reform as opposed to 6% who oppose it," according to the ATRA report. "More impressively, 67% of the respondents said they'd be more likely to vote for a politician who favored tort reform and 64% said they'd be less likely to vote for a candidate who opposed tort reform." Of course, associations know how spin data any-which-way-but true to favor their own members and so it's impossible to confirm the accuracy of the ATRA figures.
The national news media--including business trade magazines--tend to give tort reform a bad rap. Many objective observers see a need for insurance reform, not tort reform. For example, in a March 2003 column Business Week's Lorraine Woellert said, "But clear away the dubious studies, the exaggerated line charts, the hysterical press releases, and look at the numbers, and the statistical case for caps is flimsy." Missouri doctors tend to believe jury-awards, not the insurance industry, have caused Missouri's medical care mess. "Huge jury awards are out of control," said Kathy M. Perryman, M.D., President, Missouri Society of Anesthesiologists. "Frivolous lawsuits and skyrocketing unaffordable malpractice premiums are forcing doctors into early retirement. Doctors are restricting their practices to lower their liability and moving out of state to avoid Missouri's laws altogether." Dr. Perryman also said that lawsuits against anesthesiologists have been on the decline for a number of years because of the improvement in safety due to the continued work of the American Society of Anesthesiologists.
Until the tort-reform issue is remedied, the matter of who to blame depends on which side of the aisle you're sitting. But if you're straddl- ing the issue, and you're on a fence on the Kansas/Missouri state line, be careful on which side you fall.
Missouri tort reform legislation has recently been debated on the house floor. Missouri Doctors believe that important reform should: Overturn the Scott Decision regarding liability for multiple caps instead of one on non-economic damages. Limit venue shopping. Require that expert witnesses be licensed and actively practicing in the same specialty as the defendant, and the expert sign an affidavit of merit, or the case must be dismissed. Change the statute of limitations for minors under the age of six. Limit liability to the percentage of fault attributed to each defendant. Cap non-economic damages at $250,000 without an automatic inflator. In states, such as California, this has made a favorable and measurable impact on malpractice premiums. Cap civil damages on trauma care. Allow a plaintiff's payments from other sources to be disclosed in court. Limit attorney's contingency fees. Require the losing side to pay the winner's legal costs. Limit punitive damages to cases where the actions were the result of reckless indifference.
Other States Seek Tort Reform More than half of the nation's state legislatures are considering new or tighter caps on damages in medical liability lawsuits. The American Tort Reform Association claims that 15 states have limits on non-economic damages in medical malpractice liability actions: $250,000 cap Florida, Utah, Montana, California $280,000 cap Michigan; $500,000 product liability actions $350,000 cap Nevada, Missouri, Wisconsin $500,000 cap Massachusetts, Louisiana, North Dakota $600,000 cap New Mexico $1 million cap South Dakota, West Virginia $1.25 million cap Nebraska