HHS joins call for national tort reform

Litgation is behind rising insurance premiums, says a report from the Dept. of Health and Human Services.

By Damon Adams, amednews staff. March 24/31, 2003.

A federal report shows medical liability problems have worsened over the past year, prompting physicians to close or limit practices, or flee to states with lower insurance rates. On the same day the government issued its report, an AMA analysis said six new states are in a liability crisis: Arkansas, Connecticut, Illinois, Kentucky, Missouri and North Carolina.

Physicians said the report and AMA analysis, both released March 3, show the growing magnitude of the medical liability problem and the need for legislation.

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"This is the first time a president, as well as the administration, has pointed out clearly the enormous cost to the patients and to our society of this broken tort system," said AMA President Yank D. Coble Jr., MD. "States are obviously continuing their aggressive action [for reform]. We're supporting all their efforts to do that."

The U.S. Dept. of Health and Human Services report details how the crisis has worsened since the agency reported on the problem in July 2002.

It blames the crisis on litigation, pointing to a rise in the amount of jury awards and settlements. For example, in 1991 there were 298 payments of $1 million or more reported to the National Practitioner Data Bank; in 2002 there were 806.

Insurance premiums have risen rapidly in recent years, especially for internists, general surgeons and ob-gyns, according to the report, "Addressing the New Health Care Crisis."

In 1991, 298 malpractice awards topped $1 million; in 2002, 806 did.

"The scope and intensity of the crisis have increased," the report said. "More doctors, hospitals and nursing homes in more states are facing increasing difficulty in obtaining insurance against lawsuits, and, as a result, more patients in more states are facing greater difficulty in obtaining access to doctors."

The report said tort reform is needed and spelled out President Bush's call for a $250,000 cap on noneconomic damages. It also noted a bill introduced by House Rep. James Greenwood (R, Pa.) for unlimited awards for economic damages and a $250,000 cap for noneconomic damages.

But trial lawyers and some lawmakers argue that caps won't bring down insurance rates and will limit the legal rights of patients.

John Thomas, chair of the Washington, D.C.-based Coalition for Affordable and Reliable Health Care, said the HHS report confirms the organization's belief that frivolous lawsuits are driving up insurance rates. The coalition consists of hospitals, health care professionals and others who support medical liability reform.

"It shows that this is a continuing crisis -- one that will continue until we get some meaningful lawsuit-abuse legislation," he said.

Richard Jennett, MD, a gastroenterologist in Jefferson City, Mo., echoed the call for reform.

Missouri is one of the six states newly designated by the AMA as crisis states. They join 12 states on the list issued by the AMA in June 2002: Florida, Georgia, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Washington and West Virginia.

Dr. Jennett, president of Jefferson City Medical Group, said the multispecialty group has seen its premiums increase 30% per year for the last three years. "This year, we're not even sure we can get insurance."

In Arkansas, several insurers have left the state and only one or two write new policies. In Kentucky, about one in four doctors surveyed by the Kentucky Medical Assn. said climbing premiums have made them consider leaving the state. In Illinois, insurance rates jumped by more than 100% for some specialties, the AMA said.

"When you look at states [with caps on noneconomic damages], they don't seem to have the same problem with rapidly rising liability costs," said John Schneider, MD, president of the Illinois State Medical Society.

On March 4, Bush restated his support for federal tort reform during a speech at the AMA's National Advocacy Conference in Washington, D.C.

Tim Norbeck, executive director of the Connecticut State Medical Society, was encouraged by Bush's comments. "We know it's a top priority for the White House. The fact the president has given it so much time is energizing to us," he said.

ADDITIONAL INFORMATION:

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HHS report, "Addressing the New Health Care Crisis: Reforming the Medical Litigation System to Improve the Quality of Health Care," in pdf (http://aspe.hhs.gov/daltcp/reports/medliab.pdf)