Tort Reform Said To Cut Both Ways

October 24, 2003
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GRAND RAPIDS — Tort reforms enacted in the mid-1980s and 1990s have prevented the kind of medical malpractice crisis in Michigan that other states are now experiencing, some say.

At the same time, the reforms have triggered what an attorney who represents plaintiffs in medical malpractice cases contends is a crisis of a different sort — the inability of persons who are injured to pursue legitimate claims in court.

Tort reform is great political rhetoric but bad medicine," said Robert Buchanan, an attorney with the Grand Rapids law firm Buchanan & Beckering.

The differing views came this month during the Alliance for Health's monthly First Friday Forum that looked at medical liability.

On the broader question, representatives agreed that the medical malpractice crisis that has hit other states, causing some physicians to drop high-risk procedures, or retire, or consider limiting or relocating their practices, has not transpired in Michigan.

Yet rapidly rising costs of malpractice insurance are still worrisome.

"It is probably, generally, not a crisis, but it is a concern — and of growing concern because of what's going on in other states, and because what's going on in other states certainly has ripple effects for what's going on here," said Calvin Mulder, president of the Michigan Physician Insurance Exchange that handles malpractice claims against physicians.

Malpractice insurance premiums have taken a "significant leap" in recent years, Mulder said, with larger hospitals and specialty physicians that perform high-risk procedures faring the worst. Large hospitals that use national, multi-state malpractice insurance carriers are also sharing in the burden of crises in other states, Mulder said.

Premiums "went down significantly" after the last round of tort reform in Michigan nine years ago, although they have since risen to the peaks of the pre-reform days, Mulder said.

Nationally, physicians responding to a survey early this year by the Medical Group Management Association, a trade group for medical group practices, reported an average premium increase of 53.1 percent from 2002 to 2003 for malpractice coverage.

The culprits, many in the medical community claim, are the rising number of cases and growing jury awards in medical malpractice cases.

Other driving factors behind skyrocketing malpractice rates are investment losses by carriers, who in turn raise premiums to offset their losses, and normal underwriting cycles, according to a recent report the General Accounting Office prepared for Congress.

Still, the GAO report stated, medical malpractice claims "appear to be the primary driver of rate increases in the long run."

Malpractice lawsuits also contribute to so-called "defensive medicine" — the ordering of unnecessary or excessive diagnostic tests, procedures and medications out of liability fears.

Results released last February of a survey conducted by the polling firm Harris Interactive found that 79 percent of all responding physicians order more tests than are medically needed. A large majority of doctors, nurses and hospital administrators say they believe that unnecessary and excessive tests are conducted because of fear of malpractice.

The association and many others, particularly in the political arena, cite premium increases and survey results such as Harris Interactive's to push for malpractice reforms that include caps on non-economic damages and attorney fees.

Such reforms enacted in Michigan in 1986 and 1994, including a $250,000 cap on non-economic damages, are credited with preventing a malpractice crisis in the state.

"We don't have a crisis here in Michigan and there's a reason we don't have a crisis here in Michigan," said Richard Leonard, an attorney with the Grand Rapids law firm Rhoades McKee who defends medical liability cases.

"Tort reform worked. It saved our doctors," Leonard said. "We don't see a tenth of the frivolous cases we used to see, and believe me we used to see a lot. It created for us an environment where doctors were able to stay in business."

But Buchanan argues that the reforms enacted in Michigan went too far and now prevent victims of malpractice from pursuing legitimate claims. Tort reforms, he said, are "Draconian laws that we believe took away the rights of injured victims."

Buchanan questions why, when medical liability cases in Michigan are one-fourth of what they were nine years ago, physicians and hospitals in the state are now seeing such dramatic premium increases.

"There's no explosion of cases," he said. "There's no crazy, runaway juries here in Michigan. There's no courts here in Michigan crammed with frivolous cases."

The underlying problems, Buchanan contends, are "bad doctors" and the need for "real reform" in the insurance industry. He cited data showing that 50 percent of the medical liability payouts involve just 5 percent of doctors.

Buchanan argues that the medical profession needs to do a better job policing itself and punishing the "bad apples in the profession who continue to injure patients with impunity," particularly repeat offenders who are responsible for more than half of all payouts.

"The real scandal is that these bad apples even get coverage," Buchanan said. "One sure way to bring down the number of payouts is to reduce the bad doctors who are inspiring them."

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