Tag Archives: tort deform

MICRA Reform From On High?

I’ve written a couple of times about MICRA, a provision of California law that limits non-econimic damages, pain & suffering and the like, to $250,000. That law was passed in 1975, and the amount has not been updated since that time. Litigation costs and inflation have made that number look paltry today. In fact, few attorneys will take malpractice claims. The expenses they have to front aren’t covered by the cases that they win. And so, it isn’t surprising today to find families who have lost a family member due to malpractice, even shockingly obvious cases, unable to find an attorney. As a result, doctors that would have been booted out of the profession by a malpractice suit, continue to practice.

Of course, the response to that could be that regulators could watch doctors and ensure quality.  And if wishes were horses, I’d have more mustangs than the Nevada herds. The fact is that in the last thirty years, government oversight in all things consumer has been sorely lacking in the state and the country as a whole. Toys covered with lead are stocked on our shelves, and doctors avoid losing their licenses all the time.  Is this the system that we want to lay 100% of our faith in? Yes, we should have a robust regulatory scheme for doctors, but we also must recognize that doctors can’t always self-regulate. Courts serve a purpose.

And while it’s seemingly not a popular message in Sacramento these days, MICRA needs to repealed or reformed.  Thankfully, consumers have an ally in Speaker Pelosi.

The version of a national health care bill that Speaker Nancy Pelosi pushed through the House contains a provision that would push – but not quite compel – California and other states with malpractice damage caps to repeal them.(SacBee 11/30/09)

Dan Walters and I share one thing, we are both a teensy bit cynical. He sees this as a gift to lawyers, while I see it as a way to balance out the power differential between patient and medical infrastructure. Not quite the most optimal way, but if President Obama is going to push on tort deform, at least we can quit focusing on gifts to industry and instead try to figure out how we can structure a system to actually achieve policy goals.  Ha – good luck on that one, right?

California desperately needs to change MICRA, and if Speaker Pelosi can give the state a kick in the butt, well I say kick away Madame Speaker.

Tort Deform is Not a Solution, It Is a Tragedy

In President Obama’s speech, he threw a bone to the Right. Basically, he said that hew would be willing to follow up on some of W’s plans for experimental programs of limiting malpractice claims and adjusting insurance.  Since then (and before) he has said that he doesn’t think it will be a significant controller of costs.  And on that he’s right.

MedMal Line Graph

One of the principal myths surrounding medical malpractice is its effect on overall health care costs. Medical malpractice is actually a tiny percentage of health care costs, in part because medical malpractice claims are far less frequent than many people believe.

According to the Congressional Budget Office, malpractice costs amount to “less than 2 percent of overall health care spending. Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.”

MedMal Pie ChartI’ll go farther than the AAJ. Not only is it not medical malpractice law that is raising health care costs, it has actually far less than the CBO estimates.  You can see that costs are actually somewhat decreasing from the line chart up top (full PDF where I got these here), and the pie chart shows that medical malpractice premiums account for less than 1% of health care costs.

There are two reasons why Republicans love this stuff, neither of which have anything to do with the doctors “practicing their love“.  They are simply allies of convenience.  First, attorneys who represent victims of malpractice have traditionally been solid Democrats, and not just the voting kind, but also the giving great sums of money kind.  The Texas Democratic Party had become reliant on this money when Bush became governor by defeating Ann Richards. Trial Attorneys had been good friends of Richards, so taking on the trial attorneys in Texas made a great deal of sense for Bush. He was picking a fight with a group that had opposed him.

The other reason? Malpractice is bad for the bottom line of some big Republican donors. The American Medical Association has long aligned themselves with the Republicans, as have the corporations affected by tort law in general.  Medical malpractice reform has to be considered in the more general frame of tort reform

But as they say, as goes California, so goes the nation. And California led the nation in tort deform  Back in the 1970s, California enacted a bunch of legislation capping recoveries and generally limiting tort recoveries.  It was a defendant’s dream, and the big corporations who typically get sued a lot were right behind it pushing it along.

In the med-mal area, recoveries were limited to $250,000 of non-economic damages by the Medical Injury Compensation Reform Act (MICRA)  in 1975. Any damages that could not be proved up were thus capped, with no adjustment for inflation.  So, for example, a chid’s earning potential, as viewed by the law, is essentially zero, as they cannot be “proved.”  Even if the kid is singing in the womb, reading Shakespeare at age 2, and performing calculus at age 6, the damages for a lost child are too “speculative.” And thus any damages given to the kin of a child who was lost due to malpractice were non-economic and capped at $250,000.

That number hasn’t changed since 1975, and while it might have been possible for an attorney to make a decent living in 1975 at $250,000 per case, that is not the case today.  First there is inflation: $250,000 in 1975 is worth nearly a million today.  But even beyond inflation, trial costs are much higher today.  Expert witnesses now get astounding ($500-$1,000/hr) pay, and judges and juries now require more of this kind of testimony. Trials are very, very expensive.

And now, very few attorneys can afford to take these cases.  Even heartbreaking ones where families are left with nothing but a semblance of a shrine (Photo: Noah Berger / Chronicle):

Wayne Volkmuth learned what a “250 case” was while conducting research shortly after the loss of his 7-year-old son, Ryan, who died three years ago during a dental procedure at a Palo Alto clinic.

The “250” refers to $250,000, the most Volkmuth could recover in a medical malpractice claim over his disabled son’s death, a limit set 34 years ago by California’s landmark medical malpractice law. It’s also the reason his case was turned down by most of the dozen medical malpractice attorneys he and his wife consulted. (SF Chronicle 9/21/2009)

Insurance companies know how this works. They ssimply delay and delay, until any attorney who was willing to take the case figures out that the case is going to be a money loser.  And the result is this: the needless deaths of children and the elderly with no recourse whatsoever.

MICRA needs reform. At the very least, it needs to be adjusted for inflation.  But more than that, we need to restore the balance between the tort deform lobby and consumers.  Corporations and those with the biggest lobbying warchests win these fights, with stories like this as the end result.  Consumers are the ones who get screwed every time.  It is time to demand more from our legislators, both in Sacramento and DC.  Do not kowtow to those who simply waive cash. You represent the people, not the lobbyists. (See also ChangeCongress.org)