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Lawsuit limit may be just what the doctors ordered

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  • Greg Cannon
    http://www.mysanantonio.com/news/medical/stories/MYSA022606.01A.MedMalpractice.35db3b8.html Lawsuit limit may be just what the doctors ordered Web Posted:
    Message 1 of 1 , Feb 26, 2006

      Lawsuit limit may be just what the doctors ordered

      Web Posted: 02/26/2006 12:00 AM CST

      Travis E. Poling
      Express-News Business Writer

      Two years after Texas voters reined in jury awards for
      medical malpractice, the medical community appears to
      have gotten everything it wanted: More doctors and
      fewer lawyers suing them.

      On the flip side, lawyers who have made a career
      handling medical malpractice cases — including those
      who defend doctors and hospitals — are starting to
      look elsewhere for work.

      And patients who believe doctors or medical
      institutions have injured them say they can't find a
      lawyer to take their case.

      This is the new doctor-friendly Texas and the model
      for what President Bush would like to see duplicated
      on a national scale.

      Texas has about 3,000 new doctors since 2003, when
      Proposition 12 capped non-economic awards for medical
      malpractice against doctors and hospitals at $250,000
      per defendant.

      While proponents of the law hold this to be a
      significant number of new doctors, an analysis of data
      from the Board of Medical Examiners shows that rate of
      increase in Texas isn't significantly higher than
      before the change.

      The most noticeable changes are in the number of
      doctors in the highest-risk specialties. Doctors say
      they aren't as afraid of lawsuits, medical liability
      insurance competition is increasing, and Texans have
      more access to medical care.

      Greg Larcher, actuary health practice leader for
      consulting firm Aon Risk Consultants, said a study
      just completed by Aon for its hospital clients found
      the severity of medical malpractice claims against
      hospitals still is on the upswing in many states, but
      that Texas has seen a dramatic reduction in the number
      of claims.

      Dr. David Cantu sees that as a boon to patients.

      Cantu, a Fredericksburg family doctor and
      obstetrician, thought he wouldn't preside over another
      birth after he dropped his medical malpractice
      liability insurance for the obstetrics portion of the
      practice to reduce his overhead.

      "I was doing high volume and just not making ends
      meet," Cantu said.

      He and his practice partner had stopped delivering
      babies for most of 2003 to save money on insurance
      when Proposition 12 went into effect. He reinstated
      his insurance for obstetrics at a lower rate after the
      law changed and is delivering babies again.

      Obstetrician/gynecologists insured by Texas Medical
      Liability Trust, the largest insurer of doctors in the
      state, were paying about $58,000 in 2003 for $1
      million or less in liability coverage. That rate has
      dropped to about $46,000 and for some doctors who
      qualified for additional discounts the annual premium
      was cut in half.

      With less fear of lawsuits and liability insurance a
      smaller part of the cost of doing business, physicians
      are coming into the state or staying put after medical
      school and residency, according to Jon Opelt,
      executive director of Texas Alliance for Patient
      Access, a lobbying group for health care and insurance

      Others are expanding their practices back into
      higher-risk specialties, he said.

      The total number of doctors was growing before the
      measure, but the numbers in several high-risk
      specialties had been flat or on a slight decline after
      insurance rates began to escalate in 2000 and 2001.

      For example, the number of obstetrician/gynecologists
      practicing in Texas declined for the first time in
      more than a decade in 2002 from the previous year and
      didn't begin to increase again significantly until
      2004, according to data from the Texas Board of
      Medical Examiners.

      The figures are based on data collected every year in
      May by the Board of Medical Examiners, the agency that
      regulates doctors.

      The number of neurosurgeons in Texas had been stagnant
      at about 400 from 1997 through 2002. It began to climb
      in 2003 and last May reached 431.

      The number of new doctors in all practices in Bexar
      County was 206, or 6.2 percent growth in the two years
      before the medical malpractice caps went into effect,
      according to an analysis of Board of Medical Examiners

      Driven by increases in emergency room doctors,
      obstetrician/gynecologists, orthopedic surgeons and
      neurosurgeons, the number of doctors in San Antonio
      grew by 314, or 8.9 percent, from May 2003 through
      last May.

      The last significant jump in the number of high-risk
      specialists came in the late 1990s when the economy
      and the population were on the upswing.

      San Antonio's Dr. Robert Kottman, an emergency room
      doctor who heads the Bexar County Medical Society's
      Socio-economics and Legislative Committee, believes
      the upward trend will continue and is directly
      attributable to the new state law.

      "There's just not the economic incentive anymore for
      lawyers to sue," Kottman said. "Now there's
      tremendously increased access to medical care."

      The number of obstetrician/gynecologists in the state
      has increased by 80 since the passage of the law, and
      the rare pediatric cardiologist specialty increased by
      27 percent from 105 to 133 specialists in the same
      period after losing doctors in previous years.

      Texas Medical Liability Trust, the largest medical
      liability insurance company in the state, had doubled
      its rates from 1998 to 2003. Since the law passed, it
      delivered a rate cut of 12 percent in 2004 and 5
      percent for 2005. Another 5 percent rate cut went into
      effect this year, according to the company and the
      Texas Department of Insurance.

      The reductions are on par with what former Insurance
      Commissioner Jose Montemayor had predicted in 2004 for
      all physicians.

      A family doctor in Bulverde, for example, was paying
      about $16,000 a year for malpractice insurance and now
      pays only $8,000, said Dr. Bill Hinchey, chairman of
      the board of trustees for the Texas Medical

      Most insurers that remained in the state have reduced
      rates and are taking new doctor clients, something
      they had stopped doing before the new law.

      Texas Insurance Commissioner Mike Geeslin, who only
      took office last year, said the change "was a calming
      effect in the medical community and some hospitals
      have been able to recruit doctors again."

      And while Geeslin said his agency will keep a close
      eye on insurance rates charged to doctors, the rush of
      malpractice claims before the law went into effect
      could take four or five years to work its way through
      the system and could result in larger verdicts. The
      caps don't pertain to ongoing lawsuits filed before
      the new law.

      What crisis?

      Not all are convinced, however, that there was a
      crisis to begin with.

      A study of Texas medical malpractice claims found no
      correlation between jury awards to patients and higher
      health costs or doctors' malpractice insurance rates.

      Professors at the University of Illinois and the
      University of Texas at Austin analyzed 150,000 Texas
      insurance claims filed between 1998 and 2002 and found
      that overall increases in medical malpractice claims,
      claim amounts and jury awards didn't increase.

      Jury verdicts awarding more than $1 million stayed
      steady at about 6 percent of all claims between 1991
      and 2002. Proponents of Proposition 12 sold the
      referendum, in part, on the premise that Texas had
      huge jury awards against doctors and hospitals.

      The study authors concluded that claims had less to do
      with the rising medical liability premiums paid by
      doctors than the condition of the insurance market.

      Insurance rates tend to be lower when the financial
      markets are doing well. The firms want to sell more
      policies to generate monthly premiums to invest for a
      high return. But when the investment market isn't so
      good, the premiums tend to go up and more accurately
      reflect what the company will need to cover
      anticipated claims because they can't make up the
      difference with investments.

      Two of the study's authors said they haven't tracked
      the claim trends since the caps on non-economic
      damages were put in place.

      Hardship for some

      But opponents of the caps, including trial lawyers,
      say there is a dark side to the law.

      "We have had to turn down cases every day that are
      clear negligence," said Dennis Peery, president of the
      San Antonio Trial Lawyers Association and partner in
      personal injury firm Tyler & Peery. "You have to spend
      — as an attorney — $50,000 to $100,000 to get their
      attention," he said of suing doctors and hospitals
      with the backing of their insurance firms.

      Actual damages, which pay medical bills and the loss
      of future income, aren't capped. And juries still can
      award huge sums in damages for mental anguish or other
      non-economic losses, but they're only moral victories
      for plaintiffs. The highest amount paid in punitive
      damages is only $250,000 per defendant and settlements
      usually are even less, Peery said.

      "You really can't put a number on it, but if you're
      trying (a case) $250,000 is the wrong number," Peery

      Graeme and Kathy Livingston have been looking for a
      lawyer to sue an East Texas hospital for months and
      have been turned down dozens of times.

      The couple said they are living week to week in a
      Lufkin hotel and that Graeme, a professional organ and
      piano player from Scotland, can't earn a living
      because a hospital didn't treat a bone-deep gash to
      his finger even after he was admitted to the hospital.
      The keyboardist's finger now is frozen in position.

      Kathy Livingston said she is more concerned with
      recouping money for economic damages because Graeme
      can't work in his chosen profession. But the caps on
      punitive damages have kept plaintiffs' lawyers from
      even considering the case.

      She said she didn't vote on the proposition when it
      went to voters more than two years ago. She paused and
      said, "I wished I had."

      On to Congress

      Since 2003, Texas has become the model for what
      medical associations and employers crunched by high
      medical costs would like to see duplicated in other
      states or at the federal level.

      In July, the U.S. House of Representatives approved a
      medical liability reform bill, as it has every year
      for several years. But, as in past years, the bill has
      not moved in the Senate.

      Aaron Krupp, senior counsel for the Medical Group
      Management Association, which represents larger
      physician practices, said some Democrats don't want to
      see limits on non-economic damages and some on both
      sides of the aisle think the issue should be left for
      each state to decide.

      Another block in the U.S. Senate is that the House
      bill also applies a cap in lawsuits against
      pharmaceutical companies and managed health care
      firms. With high-profile lawsuits against drug makers
      like Merck over the pain reliever Vioxx, giving big
      pharmaceuticals a break isn't a popular stance, Krupp

      The Texas laws have had at least one unintended
      consequence: Even those who supported the state
      legislation and ballot for liability caps have been
      hurt economically.

      Pat Mizell, a medical defense attorney with
      Houston-based Vinson & Elkins, said lawyers still are
      busy with the thousands of cases filed before the new
      laws kicked in. Those cases generally take a year or
      two to wend their way through the system to go to
      trial, be settled or be dismissed by the judge.

      But those are slowing down, and not many new cases are

      "There are quite a few people grumbling about it in
      the defense bar, but it's kind of hypocritical to
      gripe about something that helps your client," Mizell

      Spencer Markel, a medical malpractice plaintiffs'
      lawyer who worked on the other side as a defense
      lawyer for 20 years, said shutting down a major
      specialty in defense litigation could cause hundreds
      of lawyers to close their doors or scramble to new
      work as commercial litigators.

      "I've got a lot of friends on the defense side that
      are hurting," Markel said. "Without the volume, you
      don't survive. They voted Republican all those years
      and I warned them. They cut their own throats."

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