Washington, May 23 -  

America’s medical tort system is broken. And, patients are the ones left to pick up the pieces. Skyrocketing liability insurance premiums for doctors across the nation are seriously threatening patient access to care.

A significant cause of the medical liability crisis is the unrestrained escalation in jury awards that are part of a legal system that in many states is simply out of control. According to Jury Verdict Research, between 1994-2001, the average liability award increased 176 percent.

Nearly 70 percent of medical liability cases are deemed frivolous and closed without any award of damages. However, the cost of defending even those cases typically exceeds $40,000. That cost more than doubles if the case ends up going to trial. In 2002, medical liability insurers’ payouts soared to more than $8 billion – insurers paid out $1.42 for every $1 they received in premiums.

As a result, there are shortages in healthcare providers, especially in specialists. And, even where providers are still plentiful, many services are not. Physicians are being forced to limit services, practice in lower-risk specialties, or even move to other states where liability premiums are stable – all in an effort to keep their premiums to a reasonable level. There is little doubt that this seriously threatens access to quality health care. Emergency departments are losing staff and scaling back critical services such as trauma units. Many ob-gyns and family physicians have stopped delivering babies. Some high-risk and life-saving procedures are being postponed.

Twenty-one states are now considered to be in full-blown crisis as a result of medical malpractice costs. This is nearly double the number of states in crisis in 2002. New Jersey, for all the advantages of being the headquarters to more medical technology and pharmaceutical companies than anywhere else in the world and having access to extraordinary health care facilities such as Robert Wood Johnson, the Philadelphia Children’s Hospital, and New York’s Mount Sinai, is one of those states in crisis. Princeton, a major carrier in the state, reports that across all specialties, rates increased 57 to 87 percent from 2001 to 2003. That’s for doctors with clean claims – add a single claim and the rate jumps 141 to 188 percent. If you are a small businessman or woman – and most doctors do practice using that business model – this is an unsustainable rate of growth in expenses.

The result is that nearly 45 percent of medical practices in New Jersey have adjusted their operations in ways that may negatively affect the quality of care they provide. For example, many have cut patient hours or ceased to offer certain services. Some practices defer the purchase of new medical technology. The same is true for hospitals. The New Jersey Hospital Association reports that 100 percent of NJ hospitals experienced an increase in premiums in 2002, with an average increase of 50%. One in four hospitals has been forced to pay more just to find physicians willing to work in emergency rooms.

As an attorney myself, I’m not going to lay the blame on the proverbial ambulance-chasing lawyer. Attorneys are required to aggressively pursue their clients’ interests to the extent the law allows. But, the law, as currently written, encourages meritless lawsuits. And, lawmakers ought to act to fix this problem.

While the U.S. House of Representatives, with my strong support, was able to pass legislation to remove financial incentives for filing baseless suits, obstructionists in the Senate have bottled up this reform. The HEALTH (Help Efficient, Accessible, Low-cost Timely Healthcare) Act, places reasonable limits on non-economic damages while preserving a plaintiff’s right to recover the full cost of economic damages, such as for medical bills and lost income. Doctors who practice sub-par medicine will still be completely accountable to their patients, and under the HEALTH Act, so will attorneys who practice borderline ethical law.

If this legislation is signed into law, CBO estimates that the Medicare, Medicaid, and Federal Employees Health Benefits programs would save $14.9 billion in taxpayer dollars over the next 10 years. State and local governments would save about $8.5 billion. And, these are just actual dollars saved; in addition, there are savings to the system as a whole from changed market behaviors.

By driving doctors to practice defensive medicine, medical liability costs add an estimated $70 to $126 billion to the costs of health care each year, diverting scarce health care resources to the legal system and away from direct patient medical care and research. An estimated 3.9 million uninsured Americans would be able to access health insurance if Congress were to pass these sensible reforms.

The medical tort system is currently designed for lawyers. It is incumbent upon lawmakers to redesign that system to restore the focus to patients.