Posted on 09/21/2003 2:50:14 PM PDT by bourbon
Hoodwinked!
Did the U.S. Chamber pull a fast one on Mississippi?
by Donna Ladd Sept. 16, 2003
It sounded mighty convincing: "Mississippi faces a crisis in medical malpractice insurance." The warnings by industry have been dire: "This is a wake-up call for Mississippi." The reports of doctors bolting the state have been breathless: "It’s the harassment of dealing with meritless lawsuits." When the tort-reform hysteria blew up in 2001, Mississippi, it seemed, was finally on top of something: The state’s "trial-lawyer cabal" was harnessing "runaway juries" willing to mete out "jackpot justice" and drive all our good doctors and job-producing businesses out of "lawsuit central" (the state).
To hear the U.S. Chamber of Commerce and the insurance industry tell it, we ignorant Mississippians were (and still are) suing each other so much that doctors and businesses cannot afford the outrageous insurance rates they need to protect themselves from our damned lawsuits. Rich trial lawyers were trolling the hospital wards looking for ways to bilk the rich doctors. The only way to limit such treachery was to limit Mississippians’ right to sue and collect damages from companies and physicians. The result: Mississippi’s Legislature enacted a $500,000 cap on non-economic damages, along with other reforms meant to curb malpractice rates and keep doctors in the state. Crisis averted.
Or was it? Indeed, was the legal crisis even real? Or did the state fall prey to one of the best-funded hoaxes of recent times?
Manufactured Crisis
So far, the debate over tort reform in general, and medical malpractice specifically, has been cast largely as evil lawyers vs. virtuous doctors. Being that people generally need a doctor more often than they do a lawyer, many people have joined the latter camp by default. Bolstered by urgent press reports, many Mississippians have easily bought the line—without much evidence—that doctors are flooding out of the state due to outrageous malpractice verdicts, which in turn lead to exorbitant insurance rates for them. And even when trial lawyers have responded that evidence of that is shaky at best, their credibility has been strained. After all, who can trust lawyers?
In truth, on at least some of the counts, the trial lawyers have been right all along—and unbiased evidence is starting to mount to prove it. In August, the General Accounting Office of Congress released a pivotal 58-page report, "Medical Malpractice: Implications of Rising Premiums on Access to Health Care," prepared at the behest of three Republican congressmen who support federal caps on liability. To their credit, the three men—James Sensenbrenner Jr. of Wisconsin; Billy Tauzin of Louisiana and Steve Chabot of Ohio—wanted to know the facts behind the hype as Congress wrestles with the question of federal tort reform, which ironically is a pet project of the "state’s-rights" GOP.
The report focused on five states that industry has identified as "crisis" states for medical liability and doctor flight: Florida, Nevada, Pennsylvania, West Virginia and Mississippi. The GAO, the nonpartisan investigative agency of Congress, did the most extensive study to date of the medical climate in the target states, comparing them to four states not identified by industry as "problem" states. After conducting interviews and corroborating reports of doctors leaving and reducing services due to the legal climate, the GAO found that the medical malpractice climate has been dramatically overblown by lobbyists and the media in those five states.
The report sought evidence of the frightening claims that doctors were leaving in droves and substantially reducing services in order to avoid potential lawsuits. "[M]any of the reported provider actions were not substantiated or did not affect access to health care on a widespread basis. For example, some reports of physicians relocating to other states, retiring, or closing practices were not accurate or involved relatively few physicians," the August 2003 report stated.
It further found no major reduction in medical services in the target states due to physicians worrying about them being particularly risky for lawsuits. It confirmed that while some physicians had left, evidence didn’t support that the movement was due overwhelmingly to malpractice risks; in fact, the level of medical care in the "crisis" states was largely unchanged. For the most part, when doctors left, others took their place, and in many cases the hospital or clinic started absorbing more of the cost of malpractice insurance to take the onus off the doctors.
Magnolia Exodus?
In Mississippi, for instance, the GAO found no mad "exodus" of doctors, despite dire media reports, such as a Delta Democrat-Times editorial: "All over Mississippi, there have been reports of doctors closing shop—leaving the public at increasing risk—because the price of healing the sick has become prohibitive," the conservative paper declared.
Indeed, in all five "crisis" states, such hyperbole tended to be just that—overblown. "Although some reports have received extensive media coverage," GAO wrote, "in each of the five states we found that actual numbers of physician departures were sometimes inaccurate or involved relatively few physicians." In Mississippi, for instance, the reports of doctors packing up their practices were loosely scattered around the state and, in fact, represented only 1 percent of all licensed physicians here. "Moreover, the number of physicians per capita has remained essentially unchanged since 1997," the report stated about Mississippi, adding in a footnote that the number of doctors here actually increased between 1997 and 2002, from 1.9 to 2.8 per thousand in the population.
This, of course, isn’t what we’ve been hearing the last couple years. Jackson doctor D. Kyle Ball spoke on behalf of his peers in a Clarion-Ledger op-ed on June 3, 2002, calling the malpractice crisis a "brain drain": "These men and women have been forced to make radical changes in their life’s work. Many have refused to accept any new patients; many have begun limiting the scope of their medical practice; and many others have elected to retire."
The GAO found isolated incidents of doctors offering fewer services due to the threat of liability, but mostly in rural areas where other factors also affect a doctor’s desire to stay. The report cited the example of pregnant women in Central Mississippi who have to travel 65 miles to a hospital to deliver a baby because family practitioners at their local hospital have stopped performing obstetric services due to high premiums. "In both areas," the report added, "providers also cited other reasons for difficulties recruiting physicians to other rural areas."
Malpractice insurance rates have increased dramatically in some states since the late 1990s, GAO found; in 2001 and 2002, rates for general surgery, internal medicine and obstetric/gynecology increased 15 percent nationally and over 100 percent in some states, including Mississippi. And the investigators said that rates of malpractice growth have been slower on average in states, such as Mississippi, that have enacted caps on pain-and-suffering damages—but the rates did continue to rise, 10 percent in states with caps, as opposed to 29 percent in states without. But the GAO warned not to spin that finding too loosely: "[T]he averages obscured wide variation in claims payments and rates of growth across states and over time," it said. This state saw an 18-percent decrease in claims payments from 1999 to 2000, a 61-percent increase in 2001 and a 5-percent decrease in 2002. Premiums also vary widely by specialty and geographic area.
The report strongly reiterated its findings from a June 2003 study that rising malpractice insurance rates are based on a number of factors. The greatest single factor appears to be increased losses for insurers based on paid malpractice claims, but the GAO said the lack of comprehensive data made it difficult to perform a full analysis of those claims. Secondly and confidently, the GAO pointed to bad investments that the insurance industry made from 1998 to 2001 "as interest rates fell on the bonds that generally make up around 80 percent of these insurers’ investment portfolios." Thus, income from premiums had to make up for a larger share of the insurers’ costs. Third, insurers "competed vigorously" in the boom-time ‘90s, offering off-the-rate-card prices that did not cover losses as the economy stalled. Fourth, in 2001, reinsurance rates increased more rapidly, in part because of an insurance industry push to make policies more profitable.
To put it simply, the insurance companies were paying out larger malpractice claims, particularly in 2001, but they were also raising rates to make up for flailing investments and less-profitable policies written in boom times. As premiums went up, doctors, legislators and reporters could believe there was a legal "crisis" brewing.
California Dreamin’
The GAO conclusions, which appear balanced between the doctor-vs.-lawyer "sides," come as a relief to some Mississippi trial attorneys, who feel they have been unfairly vilified in the insurance industry’s attempts to recoup its losses. "I read the report as affirming what I said back during the (2002) special session about some of the claims the tort-reform lobby was making," said David Baria, a Jackson attorney and former president of the Mississippi Trial Lawyers Association. Baria has said often that bad investment decisions were a major factor in the rate jumps. "Yes, there is a crisis; it’s always a problem if rates triple or quadruple overnight. There’s always disagreement over whether litigation drove the increases or caps reduce them."
In fact, damage caps have not proved to be the panacea that industry likes to say. States around the U.S. that have instituted liability caps have often found that rates have kept rising and some malpractice insurance providers have kept leaving, as in Mississippi, leading to the conclusion that something else might be at play. Like fierce industry competition, or worse.
California is a case in point. Interestingly, that state is the poster child for many advocates of medical-liability reform. In 1975, the state instituted $250,000 pain-and-suffering (non-economic) caps in response to the first round of spiking malpractice rates in the U.S. Fast forward 28 years, and California’s rates are still high, but more stable than many other states.
"You can look at caps and see the way they work," said David Clark, an attorney and partner in Bradley Arant Rose & White, major backers of tort reform in Mississippi. "Look at California 27 years ago; they were running into a crisis. When they imposed $250,000 caps on damages, it brought them back from by far the highest to back in line."
The problem with that example, repeated incessantly by tort-reform supporters, is that a major piece of the puzzle is left out. In fact, after California capped damages, its rates kept shooting up—increasing 190 percent between 1976 and 1988. Californians, in the way that they do, got mad and demanded insurance reform. In 1988, they passed Proposition 103, mandating oversight of insurance companies and state approval of premium rates.
When asked about that part, Clark expressed disbelief that the insurance reforms even happened in California, not believing me until I read him several different news reports out of the thousands about Prop. 103 that are available in the Nexis database. "I never heard about it," he said of the insurance reforms.
If that’s true, it might speak to the poor media coverage too often given to vital issues in the civil-liability debate, as referenced in the GAO report. My search of the Nexis database, for instance, turned up no mentions of Prop. 103 in Mississippi press stories that otherwise focused on California’s damage caps.
Indeed, an Aug. 12, 2002, Clarion-Ledger article by Jerry Mitchell, headlined "Calif. Held Up As Tort Model," simply left the pivotal point out. Starting out saying that Mississippi’s medical malpractice premiums were "skyrocketing 400 percent," Mitchell wrote, "It’s also what took place three decades ago in California." He wrote about Gov. Jerry Brown’s special session in 1975 to cap non-economic damages, along with other legal reforms.
Then, he wrote: "Since the reforms, premiums have risen 167 percent compared to 505 percent nationally, according to a 2000 study by the National Association of Insurance Commissioners." He quoted Hattiesburg doctor George McGee saying, "California is a glowing success." He quoted David Baria saying that the average malpractice payout per doctor in California is $55,000, but that premiums haven’t fallen. And he said that California’s average premium of $25,451 is higher than the national average. But he did not say that Californians had rebelled against the insurance industry, and sternly regulated it in 1988—a move widely believed to have kept rates "only" up 167 percent, as opposed to twice that or more.
The Clarion-Ledger used the California example several times in editorials calling for non-economic caps, but without bringing in its insurance-reform component—a breathtaking factual omission, considering that national media around the country have repeatedly reported Prop. 103’s role in California’s saga.
Media Complicity
Indeed, many opponents of tort and medical-liability reform see corporate media as a co-conspirator with industry, whether on purpose or by simple confusion over the dense issues involved. The GAO warned that media reports on medical malpractice are often faulty or overblown—an objective assessment that makes the state’s beleaguered trial lawyers cheer in response.
They say the Mississippi media have been lazy on the topic, and are easily fed incomplete data. Trial lawyer Jim Kitchens of Jackson said in an interview earlier this year that industry has used the state’s journalists to pound a "steady rhetoric": "I’ve never seen such a sustained media campaign about anything."
That may sound like spin, but an analysis of state print media of the last two years shows that "greedy trial lawyers" have overwhelmingly bore the brunt of bad media during the tort-reform debate. They are often interviewed, or disparaged, in stories filled with exaggerated catch phrases like "jackpot justice," "runaway juries," "lawsuit central," and others—disturbing characterizations by the so-called objective media. News stories and editorials alike often start with a dramatic statement, if loosely supported, about the "crisis" and the miserable legal climate for doctors.
This demonization of the trial bar is nowhere more apparent than in the Clarion-Ledger, a statewide newspaper. Starting with Jerry Mitchell’s June 27, 2001, front-page article, "Hitting the Jackpot," the daily newspaper has been relentless in its pursuit of a malpractice legal "crisis" in Mississippi. June 29, 2001: "More insurance firms exit Miss." Aug. 22, 2001: "Hitting the Jackpot in Mississippi." Oct. 30, 2001: "Staggering jury verdicts draw calls for tort reform."
Since June 7, 2001, the newspaper has used the phrase "jackpot justice" at least 47 times in articles and editorials, according to a Nexis search. On Aug. 2, 2002, Mitchell began a news story: "Doctors begged, businessmen pleaded and citizens cried for lawmakers Thursday to reform the civil justice system." He and other reporters wrote myriad articles about doctors pressured by high rates, often with large photos of them with young patients: "Medical malpractice lawsuits pushing doctors over edge" and "Surgeons ready to walk off job" and "Tort reform: Just what the doctor ordered?" Usually, trial attorney responses came near the end of the piece, and seldom were everyday citizens interviewed.
Likewise, the paper’s editorials beat a steady drum of panic: "Mississippi faces a crisis in medical malpractice insurance" was a typical lead sentence, or "End non-economic award jackpot" or "Medical insurance issues pressing." Most editorials seemed determined that the newspaper be given full credit for uncovering the "crisis," referencing Mitchell’s 2001 "jackpot" series at every turn. For example: "As revealed last summer by The Clarion-Ledger’s series ‘Hitting the Jackpot In Mississippi Courtrooms,’ the Magnolia State has become a mecca for out-of-state lawsuits leading to a perception of an out-of-control legal system." Whether or not that "perception" was a reality was an issue the paper did not explore in any depth.
Much Mississippi media, including the Clarion-Ledger, have often displayed disdain for the state’s juries, lumping them into a Grisham-esque monolith. "The greatest wildcard on runaway juries is the ‘pain and suffering award," where emotional appeals can turn reality upside down," the Clarion-Ledger opined Aug. 26, 2002. (The GAO found that average malpractice verdicts are $500,000, settlements $300,000—far from the outrageous millions that industry reps like to claim. And most large verdicts are dramatically reduced before actually being paid—something few media reports get around to mentioning.)
Some Clarion-Ledger critics like to say the seemingly pro-reform reporting is because its parent company Gannett is a major corporation, and thus it wants corporations protected from lawsuits. But that doesn’t ring entirely true; the Gannett News Service conducted a study of "crisis state" Florida’s malpractice rates, finding that they cannot be blamed on high jury payouts. "[T]here is no malpractice crisis in Florida’s courts," Paige St. John wrote in Gannett’s Pensacola News Journal on March 15, 2003. But that in-house study has yet to make it way into the pages of the Clarion-Ledger.
One reporter, Joey Bunch of the Sun-Herald in Biloxi (who has since left the state), provided a notably balanced and informed voice on the issue. During the special session, called by Gov. Musgrove in fall 2002, Bunch gave all the players equal voices, including patients like Dawn Bradshaw of Brandon who entered the hospital with mild pneumonia and left as a brain-damaged paraplegic and later won $9 million in compensation. He only used "jackpot justice" once in print in the dozens of his articles on the topic I found. He also criticized the trial bar, as well as the medical lobbyists and the U.S. Chamber of Commerce—the 500-pound gorilla radiating much of the hype.
A Political Wedge
This battle didn’t begin in 2001, or in Mississippi, or even in doctor’s offices. The medical-malpractice debate is just one more front, and doctors an unfortunate pawn, in a 30-year political battle in Washington between corporations and trial lawyers.
The July 12, 2003, National Journal reports that the stakes are higher than one would think by reading frenetic "jackpot justice" diatribes in local newspapers. "Republicans, in control of both the White House and Congress, are working hand in hand with their corporate allies on a carefully developed and well-financed campaign to battle trial lawyers. If successful, the GOP and the business community could realize two long-sought goals: to revamp some of the country's tort laws, and to weaken a primary funding source for the Democratic Party," wrote Peter H. Stone.
Trial attorneys are, indeed, one of the few ultra-wealthy groups in the U.S. that routinely still give money to Democrats (from 1999 to 2002, 89 percent of trial-bar donations went to Democrats, the Center for Responsive Politics reports). And Republicans don’t like that. They also want to protect big business from having to pay out large sums of money in liability trials. Citizens’ groups and trial attorneys argue that the courts are a necessary recourse to police corporations that hurt or kill people with their products. If damage pay-outs are limited, the incentive to put out dangerous products is more tantalizing. With caps, the reform opponents argue, companies can just build smaller settlement projections into the budget plan.
The strategy that industry has followed, as outlined in National Journal, is fascinating. First, they battled over no-fault auto insurance in the 1970s, then broad product-liability reform in the 1980s, but without great successes. In the late 1990s, though, industry hit its stride, especially after lobbyist Tom Donahue became president of the U.S. Chamber of Commerce in 1997 and formed the Institute of Legal Reform, which spent $23 million in 2002 lobbying in Washington and various states. Suddenly, industry and the U.S. Chamber went on the attack—and strategically moved medical malpractice front and center. Everyone loves doctors.
And the strategy is working, especially as media around the U.S. buy into the scheme or under-report the story. Many moderate Democrats are shying away from candidates supported by trial attorneys. President Bush and right-hand man Karl Rove have long pushed the tort-reform political wedge strategy. Bush said in Mississippi last year, "There are good docs who can’t get liability insurance or (have) given up their specialties or (are) leaving their practices to go somewhere else. It’s estimated by some that this great state could lose 10 percent of your physicians, unless you do something about it." He said that "these lawyers will sue everyone" in a "giant lottery" with "lousy juries."
David Clark agreed with Bush’s premise that the state’s poor legal reputation can cost us businesses, and thus jobs, regardless of the reality or the reason they give for staying away. "It’s difficult to measure ‘why’ when you have businesses that don’t come here. If they’re influenced by the tort climate, they don’t tell you that," he said. When asked if comments such as Bush’s are actually talking down the state to potential businesses and doctors, who might be as scared by the myth as the reality, Clark defended the strategy. "It’s no secret; we’re not out there trying to slam the state."
But slam they have. The U.S. Chamber of Commerce held a press conference on May 8, 2002, in Washington, D. C., to announce a campaign against Mississippi’s legal system. It spent $100,000 on ads in the state’s newspapers to plead its case for "common-sense legal reforms now." This fall, the Chamber’s Institute for Legal Reform plans "get out the vote" drives for pro-reform candidates in Mississippi, according to the National Journal article.
But the Mississippi plan was already well underway. Nearly a year earlier, on July 23, 2001, the Mississippi Manufacturers Association hosted a meeting of trade associations and lobbyists to discuss tort-reform strategy. According to a written summary of the meeting by an attendee, Alabama political consultant George Burger laid out a five-point plan for our state, starting in July 2001, to educate the public, raise money, introduce legislation, defeat anti-tort reform judges in 2002 and then "change the players" in fall 2003 (i.e. defeat anti-tort reform legislators). Clearly, the group is on schedule with its plan of attack.
A Haley Barbour administration seems likely to ensure that tort reform will be front and center. After the U.S. House voted 229-196 to pass a federal medical-malpractice bill with $250,000 caps, last March, industry hired Policy Impact Communications, an arm of Barbour’s D.C. lobbying firm, to pressure U.S. senators to vote for the bill this fall. At the moment, at least, that prospect has dimmed.
Holistic Medicine
The medical-reform lobby hasn’t been helped much by reports like a Dec. 3, 2002, Washington Post story showing that 98,000 Americans die and a million more are injured due to preventable medical errors that cost the U.S. some $29 billion a year. And a medical blooper like a young woman dying in the Duke University hospital in February after a botched heart and lung transplant is making it harder to sell malpractice reform to the general public, National Journal reported.
The truth is that most doctors are not to blame for these very costly mistakes. Fewer than 5 percent of physicians account for more than 50 percent of malpractice cases—and a movement is afoot to tighten tracking and regulation of bad doctors.
And, if the major media will report it, research like the GAO study may bring this debate back down to earth a bit, perhaps revealing that every trial attorney isn’t an ogre and every doctor isn’t a saint. (In fact, there are reports around the state of doctors refusing to treat trial attorneys’ families.)
Truth is, something needs to be done about insurance premiums for doctors (and then perhaps the rest of us). You can’t blame doctors for being outraged at excessive rates, or for believing some very well-orchestrated hype about why rates are so high.
In some states, alternatives to liability caps are being considered. Mississippi may hold hearings to determine why rates are still high and malpractice insurance providers still bolting the state (we’re down to one), even after the caps imposed during the special session. Such hearings could reveal that caps need to be balanced with insurance reforms, a la California. "I would ask the Legislature to hold hearings to determine the overall status of insurance providers given the state of the stock market and the fact that we passed substantial tort reform and still had medical malpractice providers leave the state," Gov. Musgrove told me in August. "I believe you will see me deal with and propose hearings concerning this area." That is, if he’s re-elected.
David Clark of Bradley Arant disagrees with the hearing idea. "The insurance companies are there; they have to make a profit.…You can’t force insurance companies to come in and do business; if they see a viable market for them, I assume they would come in. … I’m not really sure what a state can do to investigate problems."
Industry might not be pleased, but such hearings would be the first step beyond the anger and hysteria, and a move to finding a holistic approach to curing the ills of both the medical and the legal industries.
Perhaps then the people can finally take this debate away from the "doctor vs. lawyer" mythology and, like in California, re-frame it into a more accurate paradigm: people vs. "cap-happy" industry. Perhaps then we can find solutions that demonize neither doctors nor lawyers as a group, and help the people it’s supposed to: you and me.
Donna Ladd is editor-in-chief of the JFP.
14 of the top 20 contributors in the states are trial lawyers and they all heavily donate to the Democrats. Of course at least 10 of them got to share in the billion+ dollar lawyer take of the out of court tobacco settlement (a class action lawsuite sponsored by a number of states).
Needless to say, they did not like this bit of legislation (or the people who voted for it).
"There are reports of frogs refusing to carry scorpions across watercourses." Hell, why should they?
Criminal Number 18F
That sounds like a distinct possibility.
This is just anecdotal evidence, I guess, but in Oregon OB-GYNs are jumping ship like crazy because of the high cost of malpractice insurance. I have heard of other specialties doing the same, but I can't recall which ones are involved.
There is one little word left out of the conversation...say it slowly and repeat after me-- "jurors". Yes, its your fellow citizens that continue to award these ridiculous judgements. Its the dumbing down of America effect. Any trial lawyer will tell you that the same case in two different venues will bring two very different judgements. Here in Atlanta, for instance, if you get a Fulton County jury (city of Atlanta) and a black plaintiff the insurance company better settle that case, pronto. Most of the Atlanta jurors have no idea how business works...to them its just a free pot of money. Why not give cousin, Demarco, another million or two. Take the same case thirty miles up the road to Forsyth County and the plaintiff better not take it to a jury (particularly if it is a soft tissue injury case). The same goes for jury nullification in criminal cases and the dumbing down of America. O.J.s case wasn't the only one....are the lawyers at fault here too? Had O.J.s case been tried near Brentwood, as it should have been, then we wouldn't all stll be looking for Nicole's killer. (sarcasm off)
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