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Ted

The problem comes because you're using "junk lawsuits" to describe lawsuits that are so frivolous they would result in attorney sanctions, while President Bush is using the term to describe lawsuits that are platonically meritless but, because of imperfections in the system, result in payments to plaintiffs through incorrect jury verdicts or payment of settlement in lieu of expense of trial (and/or risk of incorrect jury verdict). You're effectively debating a straw-man. I've discussed this rhetorical sleight-of-hand before.

On what grounds do you blame the malpractice insurance companies? Their premiums reflect their expenses, nearly all of which come from defending medical malpractice suits and paying claims. The leading insurer in Illinois is the mutual ISMIE, and their profits go back to their insureds. More on the Madison County Bush speech on medical liability reform.

Evan

Ted: I'll accept your definition of a junk mel-mal lawsuit: "lawsuits that are platonically meritless but, because of imperfections in the system, result in payments to plaintiffs through incorrect jury verdicts or payment of settlement in lieu of expense of trial (and/or risk of incorrect jury verdict)."

Why didn't Pres. Bush give any examples of such lawsuits in Madison County? In St. Clair county? Anywhere in the country?

Ted

I imagine the most likely answer is the simplest: the speechwriter didn't think it was important, because it's such an obvious problem.

It's an interesting trap you pose, Evan: where Bush speaks in generalities, criticize him for failing to give examples; if he focused on examples, criticize for being overly anecdotal. There's only so much that can be said in a speech, and a speech in a conversational tone isn't going to be at the same level of detail as a Manhattan Institute policy paper.

It's not hard at all to find examples. The Merenstein case provoked a lot of commentary in the med-blogs; the Jack Sprague case, both in Overlawyered, come immediately to mind as big-ticket examples. Neither lends itself to a soundbite (just as "junk lawsuit" sounding so much better than "lawsuit resulting in a false positive").

Jeff

Right on Ted. I'm surprised doctors even provide medical treatment to trial lawyers or their families. If they do, I wonder if they require them to sign a release.

Evan

Jeff: No more free legal commentary for you! Now hurry on to another website, before I require you to sign a release.

Ted: I was critical of Bush's speech, but my criticisms weren't meant to be limited to his speech: rather, I'm critical of the intellectually dishonest way he's trying to persuade the public, who stands to lose as a result of his proposals, to adopt his viewpoint by blaming "trial lawyers" without even considering the role of insurance companies in the medical-malpractice insurance crisis. You point to two cases that you consider junk lawsuits. Both cases went to juries. Already in the system, we have these safeguards, among others: the fact that the high risk of junk lawsuits must be born by the lawyers who file them; Rule 11 and its state-court equivalents; a defendant's ability to file a motion to dismiss and a motion for summary judgment; a defendant's ability to hire skilled lawyers (those who defend med-mal cases almost always specialize in it); and the fact that a jury must be persuaded to rule in the plaintiffs' favor. In Illinois, where President Bush came to make his speech, there are additional "reforms," for example, a case cannot proceed until another doctor signs an affidavit stating that in his opinion, he thinks the defendant committed malpratice; in addition, attorneys' fees are capped in med-mal cases. Why is a change to the system needed--a damage cap--that will place the burden for the doctor's insurance rates on those who can least afford it, while also bringing within its scope some whose damages far exceed the cap?

I defended med-mal cases for a number of years, and I can't think of any that were "junk lawsuits" that fall into your definition. You might disagree if I was able to share the details of these cases, but my point remains: the "junk lawsuit" is the exception, not the rule Bush tries to make it. In the cases I defended (along with other, more senior lawyers at the firm), the plaintiffs were not arguing that the doctors were monsters or butchers, but that their care, due to human error, had fallen below the standard of care and caused serious injury. That's why the doctors had insurance. (Some say that doctors are not very good at self-regulation, which is still another issue to consider before placing a tax on victims.) The two cases you cite, both of which may still be on appeal, have been criticized mostly because they seem to set a precedent with bad policy implications. The Sprague case has plenty of causation problems that would make it distinguishable from most other cases. And as to both cases, the bad policy implications would still be present no matter what the amount of the pain and suffering award. (I can't tell how President Bush's proposal would have changed the dollar judgment in these cases, because I couldn't find a breakdown of the damages.)

Med-mal rates have been high before. Many experts say that the rates are cyclical and will fall soon even if nothing's done. In the area where Bush gave his speech, this may be happening already. A very interesting article on this point--an interview with Jay Angoff, the former director of the Missouri Department of Insurance--ran recently in ATLA's Trial magazine but was not available online. Now it is: Angoff interview. An introduction to the reprinted article by a group of California lawyers says as follows:

“While ‘tort reformers’ point the finger at the high costs of medical negligence lawsuits to obscure some of the real issues, independent ratings groups, consumer groups, legislative committees, and even some in the insurance industry say that the business practices of insurers, not jury awards, drive up premiums.”

Former Insurance Commissioner Angoff states that the “two most important factors that play into rising insurance rates are the differences in interest rates and the investment climate in general, and the almost unbridled discretion insurers have to estimate their incurred losses.”

When asked about the impact of rising premiums on total health care costs, or on actual consumer costs, Angoff stated that “It’s negligible. At most, it’s a little bit over 1 percent for all health care spending.’”

TRIAL then asked “Why are the insurance companies still seeking caps on damages?” Angoff’s reply was that ‘They want to put the focus on something other than themselves. They’d rather be pushing for caps on damages than having the doctors complain about how insurers are paying doctors less than they used to and about how HMOs are taking the fun out of practicing medicine.”

Angoff also suggests that the way to get the truth out about the so-called insurance crisis is to have the rank-and-file doctors realize they are being ill-served by their trade associations.

I encourage anyone interested in this issue to read the Angoff interview, which offers an in-depth (though somewhat complicated) explanation of rising med-mal insurance rates that's much more intellectually honest than Bush's speech.

RSLS

This 2002 article from the New England Journal of Medicine provides another view to the causes of fluctating medical malpractice rates: the stock market. More details are provided in this USD student paper, which also provides extensive sources.

The Chicago Sun-Times this week provided some Madison County stats, for those seeking specifics on medical malpractice lawsuits.

Marketplace had a piece on Tuesday's broadcast, which also shed some light in the dark corners of the Bush argument.

Ted

Wow. It's as if RSLS hasn't read my refutation of those very same arguments -- or perhaps he'd explain how ISMIE's 4% investment in the stock market is a better explanation for their rate increase than the ~50% increase in average payout. Nationwide, medical malpractice insurers are paying out $1.40 in losses and expenses for every premium dollar they're taking in.

The "sources" in the student paper are almost entirely trial lawyer organizations, and he doesn't seem to have paid much attention to some of the non-trial-lawyer sources he cites.

Evan

RSLS: Thanks for the additional links, which are appreciated. Don't worry about Ted: read the post to which he linked, if you like, but don't lose any sleep over his grumpiness.

As for the investing argument, Jay Angoff (link above) had the following to say in an interview, focusing more on bonds than stocks:

TRIAL: The insurance industry seems to suffer periodic crises—rates rose in the 1980s, fell in the 1990s, and are rising again. If more lawsuits aren’t the cause, what is? For example, it is said that insurance company profits are tied to the stock market. How does that work?

ANGOFF: Insurance company profits are tied to their investment income—to the money they make on investments—but their investments are mostly in bonds, with a relatively small percent in the stock market. Insurance companies make their money not by taking in more premiums than they ultimately pay out in claims but by investing the premiums they collect. And by state law, they have to invest the large majority of premiums in bonds. So today, when interest rates are at a 40-year low, they make very little on their investments.

So insurance companies are making much less than they did just a few years ago, when interest rates were much higher than they are today and the stock market was booming.

Insurance companies are making so much less on their investments today that they have to make it up by raising rates. The problem is particularly acute in the medical malpractice business because it traditionally depends on investment income much more than other types of insurance do. For example, investment income doesn’t make that much difference with respect to auto insurance or homeowners’ claims because those claims are paid out fairly quickly after they arise.

Medical malpractice claims, on the other hand, typically aren’t paid out for at least four or even six or more years after the claims arise, and it takes 10 years to pay out substantially all the claims. A medical malpractice insurer will typically hold the premium it collects for five or six years before it pays out on a claim associated with that premium. During that period, investment income compounds. So, if interest rates are high—let’s take even a 6 percent rate, which was the case a very short time ago—6 percent compounded over six years is quite a bit. Two percent compounded over six years is not much.

celia

Maybe someone has addressed this and I just missed it. In all the discussions and comments, I have yet to see someone say what is the appropriate recourse for someone who has legitimately been injured by a "bad" doctor or a multi-million dollar company, such as Ford or Bridgestone? And why is it that these bad doctors are allowed to continue to practice medicine, regardless of their incompetence?

In my early days, I thought that plaintiffs were out to make a buck. But maturity brought moderation, and I now recognize that these lawsuits do more to keep the rest of us safe than anything else I can think of. I don't seem to see these corporations or doctors willingly making good on the harm they cause.

I guess I can't help but think what it would be like for me if I were severely damaged in some way by a big corporation, doctor, insurance company,etc., If my damages were capped, what would the rest of my life be like? How much suffering is too much?

Jeff

The 'bad doctor' argument wouldn't seem to explain why the majority of practitioners in high-risk specialties are sued. Are they all bad?
It's Lake Wobegon in reverse...all the doctors are below average.

Jeff

How are juries, with no training in medicine, able to accurately assess the validity of these suits? When costs are diffuse (to society at large) and benefits concentrated (to the plaintiff), it would appear to favor the plaintiff. Any jury with a heart will be more sympathetic to a plaintiff with a bad outcome, regardless of whether medical malpractice took place.

Case in point...cerebral palsy cases against OB/GYNs. Recent evidence seems to cast doubt on whether birth trauma is the cause. But any parent in that situation would find alot of sympathetic jurors.

Evan

Jeff: What would you put in place of the jury system? By your reasoning, only doctors "trained in medicine" would be able to understand the science. In any event, juries are asked to make complicated decisions every day, and they usually do it with great competence.

In the medical-malpractice arena, I don't think many are arguing that high malpractice rates are the fault of juries overcome by emotion. As any medical-malpractice lawyer will tell you, juries always come into a case--and often go out--favoring the doctor. This even holds true in the "notorious" Madison County. According to a report by the Madison County clerk, as detailed here, there were 269 med-mal cases filed in Madison County from 1996-2002. Of those, eleven went to a verdict, with the jury finding in favor of the doctor seven times. (In the four cases favoring the plaintiff, the verdict amounts were $1.78 million, $470,000, $75,000 and $25,000.)

Jeff

You have more faith in juries than I do.

What would I put in place? Sunshine.

Create a centralized database of medical case histories and outcomes. Participation would be mandatory; a condition of getting a medical license. Externalize the database to the public through the web. Patients would be able to do their own homework on which doctors/hospitals are best. They would also be able to assess, realistically, what outcome is typical for their condition or illness. Insurance companies would use the data to deny coverage to truly bad doctors. The database would also help enforce best practices and reduce errors.

I would also allow doctors to have web access to a database of patients filing med mal claims, as well as any disciplinary actions filed against med mal trial lawyers. Doctors would use the database to assess which patients to take.

These two steps would eliminate most truly bad doctors, significanly improve patient care and reduce the number of med mal cases. For those that are left...

Mandatory arbitration of all malpractice
claims. The arb panel is comprised of doctors and lawyers or consumer rights advocates. They are paid a flat rate to assess the evidence, but have no direct financial stake in the outcome. Doctors found guilty of malpractice three times have their license permanently revoked. Lawyers that bring three cases found to be without merit are disbarred.

celia

I'm afraid I can't agree, Jeff. I realize that there are doctors whose malpractice insurance is outrageously high. But I have yet to run across a doctor whose lifestyle isn't higher than most people. When a doctor who owns five cars is complaining about the cost of malpractice insurance, it is hard to sympathize.

And arbitration has its faults too. Take a look at arbitrators and where they come from. Mandatory arbitration clauses in contracts are not holding up in all instances because of the bias of the arbitrator.

As far as a jury being able to understand complicated cases, a good lawyer should be able to refine the essence of the case so that anyone can understand it. That's the job description.

I've read that it is around 5% of the doctors that cause the serious malpractice cases. I'd rather address the reason why those doctors are allowed to practice and why their own profession doesn't kick them out than consider doing away with juries.

How many of us, if we were the plaintiff/patient who had been grievously injured, would be satisfied with a cap on our damages that impacts our future medical expenses? It's all well and good to argue the effectiveness of the jury system or mandatory arbitration, but when it's your neck on the line, how altruistic will you be?

Jeff

Reasonable people can differ.

Doctors in high risk specialties train for 10-15 years, after college. They often rack up big debt while undergoing the training for their profession, and work very long hours thereafter. Do they deserve to earn alot more than "most people"? Absolutely.

BTW, why aren't you complaining about the high incomes of trial lawyers? I'm quite certain they earn more than most people too.

You also reject the notion that juries can't understand complicated cases. "a good lawyer should be able to refine the essence of the case so that anyone can understand it." I'd argue that's the whole problem. You take jurors who don't know anything about medicine, dumb it down for them and play to their emotions. If you have experts on an arb panel in the area of medicine being contested, it would be harder to use these smokescreens. I'd expect fewer irrational results.

I'm not disputing that there are bad doctors. Just as I'm sure there are (gasp) unethical lawyers. I believe exposing both through a sunshine policy is the best approach to reducing the number of medical errors and frivolous med mal cases.

1L

You take jurors who don't know anything about medicine, dumb it down for them and play to their emotions.

Translation: Defense lawyers aren't talented enough to communicate effectively to juries. Someone has to take the blame, though. Therefore, juries are stupid.

You know what's funny...The best civil defense lawyers I've met LOVE juries. I don't hear top defense lawyers like Fred Bartlit talking smack on juries. Maybe the blame for doctors losing in med mal cases rests with defense lawyers, who, much more so than plaintiffs lawyers, are convinced that they are superior to "dumb" juries.

I've seen a lot of arrogant comments here, and in other comments at this blog. It should be no surprise that jurors are turned off by your arrogance, and thus that you defense lawyers lose a lot of cases at trial.

Jeff

Can't speak for other posters on the board. But I'm neither a doctor or a lawyer. Just a consumer that likes my doctor(s), and worries about how access and cost of care will be impacted by med mal.

If you have specific suggestions on how to better the current system, let's hear it. I've posted mine.

Ted

I've read that it is around 5% of the doctors that cause the serious malpractice cases.

I've read that, too. Alas, it's not true, or we'd have a very easy way to solve the medical malpractice liability problem.

We can complain that doctors make "too much," but the fact remains that many doctors leave the profession (or cease performing risky procedures) under the current system because they feel they can't make enough money to make paying the insurance worth it, and we as a society are either happy with those consequences (which fall most heavily on rural and poor populations), or we're not. Are we to draft retired doctors and force them to work?

Angoff makes a good emprical observation about interest rates that does much to explain why medical malpractice insurance is interest-rate sensitive in a way that other kinds of insurance rates are not, and puts the lie to the claim that the high rates are the insurers' fault. But these costs to the insurance industry are very real. High interest rates may allow the insurance industry to absorb the high cost of malpractice liability with lower insurance rates, but the costs are still there. If you read between the lines on Angoff, his complaint is that insurers didn't charge enough in earlier years. That would solve the problem of the shock of the increase, but it doesn't solve the problem of the amount of the total cost. Again, most medical malpractice insurance is provided by mutual insurers: if there's a miscalculation that results in a too-high premium, the insured get their money back down the line.

Caps certainly have their problems, but they're an overall improvement on the status quo, and I don't see the political support for more radical reform.

Evan trots out the verdict statistics again, but the reality is that insurers settle med-mal cases before they get to trial in Madison County because they've seen too many gigantic verdicts in non-med-mal cases. It's an irrelevant statistic: it's like saying red lights don't work because hardly anyone is ever ticketed for running a red light. The premiums in Madison County reflect the cost of issuing insurance in Madison County, and verdicts are a small fraction of the total payout.

celia

So what's an acceptable answer other than sticking to the injured party? I have no comfort level in letting a doctor, insurance company, drug company, big corporation, or whatever walk away unscathed simply because it's bad for business. Arbitration for the most part is rigged. I still think juries are able to make these decisions. Is there any other way to stop these people from their bad acts other than hitting them in the pocketbook?

The high cost of medical expenses is a complicated issue. There's more to it than plaintiff lawsuits. I don't think capping punitive or actual damages will solve the problem, but I do think it will do a great of harm to the individuals who have been injured. Why do they get the honor of being the sole reason for the medical crisis? Because they are expendable and don't have the money to fight for themselves. . . .

Nic

"MEDICAL MALPRACTICE - AN INTERNATIONAL PERSPECTIVE OF TORT SYSTEM REFORMS"

In the design of law generally, and tort law reform in particular, the noisiest lobby groups often win the ears of democratically accountable lawmakers. But for solutions that are well targeted and likely to be more enduring, it is essential that pre-suppositions be replaced by fact and emotional denunciations of one another substituted by calm dialogue addressed to identifying objectively any real problems that exist and weighing dispassionately the solutions that are available to address such problems.—The Hon Justice Michael Kirby AC CMG, Justice of the High Court of Australia. One-time Chairman of the Australian Law Reform Commission.

Here's the full text of an address opening a conference at the Royal College of Physicians, London on 11 September 2000

mythago

So what's an acceptable answer other than sticking to the injured party?

Socialized medicine, bluntly. When patients never have to worry about whether they can pay for the medical costs of a doctor's screw-up, they will be less interested in suing.

You take jurors who don't know anything about medicine, dumb it down for them and play to their emotions

Funny, but I just read an article by plaintiff's attorneys complaining that defense attorneys do exactly that--instead of addressing the complicated medical evidence, they put on a folksy defense about how the nice doctor just made a mistake like anybody can. You sure you have a problem with stupid juries?

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