MICRA does nothing to decrease costs, but makes a mint for malpractice insurers

by Brian Leubitz

Over the weekend, Insurance Commissioner Dave Jones exposed some of the mistruths that the insurance lobby has been using to fight to save their cash cow, MICRA.

Here’s the thing that nobody really talks about, and that is that those caps have not prevented excessive medical malpractice insurance rates. I know this because one of the first things I did as insurance commissioner was look at the medical malpractice insurance rates, and I discovered that the medical malpractice insurers were paying out in claims just a fraction of what they were collecting in premiums from doctors and nurses and other medical providers. So I actually have rate regulatory authority over medical malpractice insurance…what I did was I ordered the top six medical malpractice insurers to reduce their rates between 10 and 15 percent, and I have saved as a result $52 million annually in premiums for doctors and other medical providers.

Since the mid 1970s, the caps on non-economic damages have stayed exactly the same. And by exactly the same in money terms, it means that you are in fact going backwards every day due to inflation.  And all the while, as the value of $250,000 is getting increasingly small, medical malpractice insurance has been going up and up.

Doesn’t make much sense, does it? As Jones explains, some of the insurance companies have been using MICRA as a way to gouge doctors for increasing premiums while knowing that risk is heavily managed due to MICRA. Rather than some talking points about how MICRA is so critical, we need to look at the underlying facts of the devastating stories of families that are ripped apart with no way to seek justice and their day in court. MICRA, in many situations, closes the courthouse doors to expensive cases, especially when economic damages are difficult to prove. So the net result ends up with carte blanche on negligently treating the poor, the old, the young and those that just generally don’t have a high long term income stream.

We need real reform of the malpractice system, not merely abstract defenses of the status quo while bringing nothing to the table. Jones and others have argued that real reform is possible. It is certainly not the most exciting issue, that is, until it comes up in your life after a tragedy. But we shouldn’t wait for the pile of heartbreaking stories to grow to even more dizzying heights before we act.

Vote fell along a much different axis than typical party line

by Brian Leubitz

The Amash amendment to the Defense Appropriations went down to defeat last week 205-217-12. The measure would have greatly reigned in the NSA, requiring the data to be only collected from people who are actually being investigated rather than pretty much everybody as it stands.  

Among the California delegation however, the vote total was 30-21-2 (if I counted correctly). You can find a table of the California delegation over the flip. At the time, Rep. Jackie Speier (D-SF/San Mateo) had this to say of the vote on Facebook:

Yesterday, I voted for Rep Justin Amash’s amendment to the Defense Appropriations Act to limit the NSA’s surveillance of Americans. The NSA’s collection of Verizon phone records and other such invasive actions cannot be taken lightly. We need to balance the needs of national security with the right to privacy.

Indeed, the bulk sweeps of metadata shouldn’t be taken lightly. However, as the Snowden leaks seem to keep spreading, we learn that the NSA isn’t confining themselves to the metadata. Check out this article about the NSA’s XKeyScore (H/t the Verge):

A top secret National Security Agency program allows analysts to search with no prior authorization through vast databases containing emails, online chats and the browsing histories of millions of individuals, according to documents provided by whistleblower Edward Snowden.

The NSA boasts in training materials that the program, called XKeyscore, is its “widest-reaching” system for developing intelligence from the internet.(The Guardian)

While the data is apparently not stored permanently, mostly because storing that amount of data would likely even sink the NSA. However, the NSA keeps anything they think would be remotely interesting and stores all of the metadata. That is a lot of information, enough to pretty much ensure that the internet is pretty much a world without privacy. Oh, sure you can use a VPN or something like that, but your data is pretty much out there at this point.

The question then remains as to what level we give up our privacy in the fight for security. It is an ages old question, but apparently the answer these days is tilting ever more towards security.

Legislation aims to balance traffic concerns with safety

by Brian Leubitz

Capitol Public radio mentions Asm. Bradford’s AB 1371, a bill to improve safety for bicyclists. Bradford has dubbed it “Three feet for safety” but, things are always more complicated.

I travel along Highway 1 in Sonoma County quite frequently. It’s a favorite of cyclists, and for good reason. It’s beautiful. But it’s also a very curvy road, frequently right on top of a sheer cliff. Bicyclists ride next to this cliff, with drivers maneuvering around them. As it stands right now, we have the worst of both worlds. Drivers do dangerous things to get around bikes, but also get far too close to the bikes. Add on the fact that frequently the bikes end up leading a procession of cars when they can’t mix, and you have a  dangerous mix.  What ever happens, we need to ensure that there are clear rules for drivers and riders. That’s what Bradford is attempting to do, with a lean towards the bikers.

“Bicycles have as much right as anyone to use the public streets,” Bradford said. “Everyone needs to share the road, and cyclists deserve legal protection to ensure their safety.”

Some recent high profile traffic accidents involving bicycles have sparked calls for increased protections for cyclists. Los Angeles Mayor Antonio Villaraigosa broke his elbow in 2010 in a traffic accident while riding his bike.

Now, Bradford and others have been working on this legislation for a while. Last year, Gov. Brown vetoed SB 910, saying that it went a little too far in favor of the bicyclists, and could cause rear-end accidents if drivers were forced to slow too much. With AB 1371, Bradford is attempting to balance the interests in a way that pleases CalTrans and the Governor. With Gov. Brown, you may not know if he is comfortable with the balance that was struck until you get a decision on the bill. As it stands, the bill is getting some amendments in the Senate, and looks like it will be passed when the Legislature resumes action.

However, even if Gov. Brown signs it, there is still a lot of work to do in terms of education. Drivers and cyclists both need to understand what their rights and responsibilities are as they share the road.

Photo credit: Brian Leubitz, Google+. 2012 Tour of California, on Highway 1 in Sonoma County.

Special Election turnout does in Central Valley Democrat

by Brian Leubitz

Try as the Democrats did, they just could not push Leticia Perez past Andy Vidak. Today, she conceded the race:

Kern County Supervisor and Democrat Leticia Perez has conceded to her opponent, Republican farmer Andy Vidak, ending a costly and heavily contested race for the Central Valley seat.

“The voters have spoken and I want to congratulate Andy on his victory,” Perez said in a press release, adding that “Andy has earned the right to represent us in Sacramento.”(SacBee)

You would expect this to be an opportunity for a heavily contested race when it comes up again in 2014. Vidak will have incumbency, but a strong Democratic candidate might be able to leverage the higher turnout in a general election to flip this seat.

Google Hangout with a fine panel to discuss how we can fix campaign finance

by Brian Leubitz

The Reinventors network holds some pretty interesting roundtable discussions. In just over an hour, they’ll be getting together to talk about campaign finance via Google Hangouts. Click here to join the Hangout.

This roundtable will take on this ambitious problem and will bring together, as Larry suggested, many key people who brought the internet, and internet politics, to scale. Any one of them could anchor their own roundtable : Internet pioneer Tim O’Reilly, Change.org Founder Ben Rattray, Moveon.org Executive Director Anna Galland, VC Brad Burnham, Executive Producer of TED Media June Cohen, Bram Cohen, creator of BitTorrent, and Markos Moulitsas, Founder of Daily Kos.

Here’s a video from Lessig introducing the panel:

Tort reform measure hasn’t been updated in over a generation

by Brian Leubitz

A lot of things have changed since 1975. For my part, I wasn’t born yet, but from what I hear it was a crazy time. Bellbottoms, long hair, and Gov. Jerry Brown. Well, maybe some things haven’t changed all that much. But, even the most jaded will admit that the dollar just isn’t worth what it once was.

Which brings us to MICRA, legislation passed in 1975 that was intended to reduce malpractice litigation and drive down the cost of malpractice insurance. It has done that, in fact, patients with all but the biggest instances of malpractice find it difficult to find a quality lawyer willing to take the case. Why? So-called “non-economic damages”, basically compensation for pain and suffering was limited to $250,000. That was a lot of money back then, easily sufficient to cover any legal expenses and to hire experts that you would need to prove your case in a court of law.

MICRA has been in the news of late, as there have been a few rather shocking results from malpractice cases. And as Consumer Watchdog points out, the results can be dangerous for patient safety. The California Medical Association, through its president, responds to the issue in today’s Bee:

If the trial lawyers are successful, it will mean more lawsuits against health care providers and higher payouts that benefit lawyers. Everyone else will pay through higher health insurance costs, higher taxpayer costs for state and local governments, and less access to the doctors, hospitals, clinics and other health workers we all rely on.

In other words, if the trial lawyers win, patients, families, health care providers, hospitals, clinics, businesses and taxpayers all lose.(SacBee)

Except, there is a lot on the other side that this leaves out. Unforutnately, regulators have rarely been there to catch mistakes, and investigate doctors. Litigation serves to expose dangerous flaws in the system, especially when the government fails to protect us.

Moreover, that $250,000 hasn’t changed since 1973.  In real dollars, the cap has been dropping dramatically. If the $250,000 had been adjusted for inflation, the cap would now be over $1,000,000. Again, typically plenty to provide for reasonable representation. Instead, that $250,000 is now equal to about $57,700, or less than a quarter of the original value. Litigation is expensive, and in major cases, costs to prepare experts for trial can reach staggering sums. And so, many malpractice cases just fall through the cracks. In fact, the author of MICRA, Asm. Barry Keene, is still upset about the lack of an inflation provision:

Keene, now 74 and long retired from the Legislature, is tormented by the failure to protect the $250,000 cap from inflation. As he explained to me in an email, he proposed an inflation-indexed cap in an amendment to his original bill, assuming it would pass routinely. Instead the trial lawyers lobby, which adamantly opposed MICRA, came out against the inflation index in order to make the bill as noxious as possible to guarantee its rejection.

They misplayed their hand. To their shock, MICRA passed the Legislature without the inflation provision, got signed by then-Gov. Jerry Brown and then was upheld by the state Supreme Court.(Michael Hiltzik / LAT)

MICRA has another perverse incentive: It’s cheaper to kill a baby, or a student, than an old, high-earning, adult. Economic damages are easy to judge for somebody with a relatively consistent salary, but much more difficult to prove for a child. A RAND study on the effect of MICRA, found some disturbing results:

Although the RAND study did not address the issue of what might be the proper amount of non-economic compensation for any particular plaintiff, the analysis revealed that jury awards for certain kinds of plaintiffs ” those with the most severe non-fatal injuries, those with modest levels of economic loss, and those who died as a result of malpractice ” are affected more often or to a greater degree by MICRA’s cap on non-economic damages than are awards for other kinds of plaintiffs. If such differences are believed to result in an inequitable application of the cap, policymakers favoring award limits might consider “carve-outs” that would exempt exceptionally tragic or egregious cases from the proposed cap.

The long and short of all that is to say that MICRA has some very real discriminatory outcomes. Damages for women are cut more than men. For children more than adults. For the fully-able over the disabled.  In fact, Hiltzik details the case of a developmentally disabled woman who was incorrectly thought to have a “Do Not Resuscitate” order, and ended up dying for the mistake. Her economic damages were low, so low that her brother wasn’t able to find an attorney to take her case.

These problems all come with the fact that California’s malpractice insurance really hasn’t been decreased. In fact, some studies have shown premiums are higher in California, and states with similar caps, than non-capped states. While the caps on MICRA are very low, the cost is quite high. In the end, the system weeds out the wrong cases. The cases that should get additional attention, in favor of wealthier plaintiffs and the profits of insurance companies. Reducing legal waste is a good goal, but we are throwing out much in that effort. In the end, it’s the wrong reform. Hiltzik argues, quite correctly, that we need a more thorough and targeted overhaul of the system:

The remedy is to make the process more efficient, perhaps by steering such cases to a specialized arbitration court. Simply padlocking the courthouse to whole categories of plaintiffs doesn’t meet the fairness test. But MICRA shoulders all other options to the back burner. It’s time to bring this 37-year-old law into the 21st century, and fix the malpractice system so that it actually works.(Michael Hiltzik / LAT)

UPDATE: Sen. Steinberg spoke about the issue today: