Should the $250,000 cap on compensation to victims in the Medical Injury Comprehensive Reform Act be increased? Will an increase punish negligent doctors or simply drive up the cost of medical insurance?
Should the cap be adjusted for annually for inflation? Should it be left alone?
Argument In Favor
Want to Reduce Healthcare Costs? Start by Reducing Medical Errors
By Bob Pack, author of the Troy and Alana Pack Patient Safety Act
California is experiencing an epidemic of medical malpractice. One reason is an antiquated law that lets negligent doctors avoid accountability for their mistakes – and undercuts a potent incentive to improve patient protection. The unjust and outdated Medical Injury Compensation Reform Act (MICRA) caps compensation to victims harmed by medical negligence at just $250,000. Passed into law in 1975, MICRA has never been adjusted for inflation in 38 years. Therein lies the problem.
Efforts over the years to convince the Legislature to fix MICRA have fallen short. That is why I am spearheading “The Troy and Alana Pack Patient Safety Act,” an initiative for the November 2014 ballot that dishes up a dose of fairness by adjusting that $250,000 cap to account for 38 years of inflation. The ballot measure would also help reduce medical errors by requiring mandatory random drug and alcohol testing for physicians, as high-risk a profession as airline pilots or other jobs where intoxication-induced mistakes can cause deaths. In addition, it will require doctors to report substance abuse or medical negligence by fellow physicians. Lastly, it will require that physicians use the electronic CURES database, a searchable system that tracks prescriptions dispensed in California.
Why this one-two punch on prescription drug abuse and medical negligence? For me, it is personal. A decade ago, my 10-year-old son and daughter, 7, were run down and killed by a doctor-shopping drug addict. Although the driver was convicted of second degree murder, the doctors who negligently prescribed thousands of pills were never held accountable. And when I tried to take on the hospital chain to prod adoption of better checks and balances, the state’s MICRA law stood in the way.
Sadly, my own case isn’t all that unusual. Prescription drug abuse and medical negligence are ballooning – and costing California plenty. An estimated 20% of people in the U.S. have used prescription drugs for non-medical reasons at a cost of nearly $181 billion. Medical malpractice, meanwhile, inflicts a terrible cost on individuals and society as a whole. Based on national studies, more than 10,000 patients die each year in California because of medical negligence. Tens of thousands more are injured. Those deaths and injuries exact costs on employers, families and taxpayers who in many cases pick up the tab for long-term medical care for patients hurt by their own doctors.
Medical malpractice is the result of bad actions by relatively few physicians. Studies have found that barely 6% of doctors account for nearly 60% of the medical malpractice payments. Put bluntly: MICRA is helping shield medicine’s worst actors.
Meanwhile, MICRA has meant hefty profits for the malpractice insurance industry. I find it particularly outrageous that the CEOs of California’s top three malpractice insurance firms each earns more than $2 million a year, yet shamelessly support maintaining MICRA’s $250,000 cap for the death of a child.
Those same medical and insurance industries continue to use fear and misinformation to oppose the modernization of MICRA. They falsely claim updating the MICRA cap would increase health care costs, when in reality there would be no discernible effect. Medical malpractice accounts for just 0.11 percent of national healthcare costs last year. You read that right: Barely a tenth of one percent. Meanwhile, medical malpractice payments fell 29% over the past decade while national health care spending rose nearly 60%. Those divergent trajectories lay waste to claims that litigation is responsible for rising healthcare costs.
Arguments that a boost in the cap will spur more defensive medicine are countered by numerous academic studies. Among the findings: Only 8% of doctors cite defensive medicine as a cause for ordering up additional tests. One researcher, himself a physician, found that in McAllen, Texas, a town bearing the dubious distinction as the second most expensive healthcare market in the nation, doctors were practicing “defensive medicine” to fatten their own wallets – the physicians own the imaging and surgery centers that profit from more tests and scans.
The reality in California is that our outdated MICRA law is a one-size-fits-all solution that simply doesn’t work given the complexity of medical malpractice. By limiting the value of a life to $250,000, MICRA discriminates against women, children, the elderly and others lacking income losses that can be cited in court. Most of these victims can’t even find an attorney willing to take their cases.
Instead of protecting bad doctors and rich insurance executives, we need to modernize MICRA while tackling health industry appeasement of prescription drug abuse. Bolstered patient protections and physician accountability will blunt the medical misfortune that costs families and taxpayers millions of dollars every year.
Argument Against
Don’t Let Trial Lawyers Increase Health Care Costs and Reduce Access to Care
By Paul R. Phinney, M.D., California Medical Association President
California trial lawyers and their allies are seeking to change a California law to make it easier to sue doctors, hospitals, nurses, community clinics and all other health care providers so they can make more in legal fees, costing taxpayers.
The result will be higher health care costs for all Californians, difficulty finding specialists, longer waits in the emergency rooms, and reduced access to patient care. In fact, the cost to local governments alone could be hundreds of millions of dollars.
Hundreds of organizations representing doctors, hospitals, nurses, community clinics, Planned Parenthood, dentists, local governments, public safety, labor unions, business groups, taxpayer, and community groups strongly oppose the trial lawyers’ latest scheme to feather their nests and have mounted a campaign to defeat the trial lawyers’ proposed ballot measure that could appear on the November 2014 statewide ballot.
The main provision of the ballot measure is a change to California’s landmark Medical Injury Compensation Reform Act (MICRA), by quadrupling the speculative, non-economic damages cap in MICRA from $250,000 to $1.1 million.
The four-fold increase to MICRA’s non-economic damages cap proposed in the ballot measure gives trial lawyers incentive to take on non-meritorious cases, driving up the cost of health care for everyone. An important note – the new limits means trial lawyers will reap three times more in legal fees than they can get under the $250,000 limit: $74,166.67 per case today vs. $236,666.67 per case under the new limit.
Background on MICRA’s Success
MICRA governs legal proceedings if someone is injured in a medical procedure. The California State Legislature passed MICRA to control the rapidly increasing cost of doctors’ medical liability insurance, which was threatening access to health care because there were no limits in the amount of lawsuits that could be filed.
Under MICRA, injured patients and their families involved in medical liability lawsuits are treated fairly. Under the law, a patient is entitled to unlimited monetary compensation for all economic damages or out of pocket expenses. This includes unlimited recovery of all past and future medical costs and unlimited recovery of all past and future lost wages. Punitive damages also are awarded on an unlimited basis.
MICRA also limits the amount lawyers can take from their patients in fees. Instead of taking their normal 40%, MICRA mandates a sliding scale of payment to the trial lawyers, so more money goes to patients, not their lawyers.
Since MICRA’s inception, and despite what trial lawyers are saying, payments to patients have gone up more than twice the rate of inflation.
Finally, MICRA also includes up to $250,000 for non-economic damages. Contrary to the assertion made by trial lawyers and their allies, this reasonable $250,000 ensures legitimate claims can go forward and those injured receive compensation. At the same time, the cap limits incentives to file meritless lawsuits.
Increasing Meritless Lawsuits and Lawyer Payouts Will Reduce Access to Health Care Services
California is already facing a physician distribution problem, and with health care reform expanding coverage for millions more, this shortage will become even more severe.
Raising MICRA’s cap on non-economic damages will dramatically increase medical liability insurance costs for doctors, community health clinics, hospitals and others. If medical liability insurance becomes unaffordable, it could force providers to cut back their services or close altogether, eliminating access to care for patients in areas that need it most.
Trial Lawyers’ Measure Would Increase Consumer Health Care Costs by Billions Each Year
Meritless lawsuits waste precious health care resources. The end result is increased health care costs for everyone, plain and simple.
In fact, a recent study by California’s former independent non-partisan Legislative Analyst found that quadrupling MICRA’s non-economic damages cap to $1.1 million, as set forth in the ballot measure, would increase health care costs in California by $9.9 billion annually.
Trial Lawyers’ Measure Would Increase Health Care Costs for State and Local Governments by Hundreds of Millions Each Year
The independent, non-partisan Legislative Analyst Office which reviews each ballot measure to evaluate state and local costs, estimated that the trial lawyers’ MICRA measure would cost up to “hundreds of millions” of dollars annually. Other estimates are even higher. State and local governments provide health care for their employees, operate clinics, hospitals and other health services, and provide health care for low-income residents, such as Medi-Cal.
A Change to Benefit Trial Lawyers is Not Needed
As a physician, I am strongly opposed to trial lawyer efforts to change MICRA. Trial lawyers have been pushing for years to make this MICRA change but have met with rejection in the state legislature because lawmakers understand MICRA’s importance to the health care system.
Changing MICRA will only increase healthcare costs, reduce patient access to their doctors and trusted medical providers, and will result in more costs for the state and local governments.
More lawyers filing more meritless lawsuits is a bad idea. MICRA works well. We don’t need to change it just to benefit lawyers.