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Key Reference Citations (KRC)

Chapter 4:

The Healthcare Crisis

Introduction

Nowhere does lawsuit abuse inflict more harm than in the area of healthcare. It raises the costs that all Americans pay – through higher doctor’s bills, hospital costs, prescription drugs, insurance premiums, and taxes – and impedes the efforts of the medical community to provide quality healthcare to the American public. Doctors are ordering unnecessary and expensive procedures for patients as a hedge against allegations of malpractice. Medical personnel are reluctant to disclose problems which might minimize risks and save lives for fear of litigation.

In many states, skyrocketing malpractice premiums are forcing practitioners to limit or discontinue their practices or relocate them to areas with more favorable tort reform laws. This dislocation threatens a loss of access to quality care for many Americans, most notably the poor and disenfranchised.

Fast Facts

• Since 1994, the average medical liability verdict has more than tripled to $3.5 million – that’s an average verdict. (AJP, Fast Facts on the Litigation Lottery, 2005, p. 1)

• "... going into 2004 the AMA had identified 19 states in crisis. In June 2004, however, the AMA announced that Massachusetts had become the 20th state in a full-blown medical liability crisis due to its deteriorating medical liability climate and the growing threat of patients losing access to care."  (KRC: AMA Statement, Feb 17, 2005, p. 2-3)

• “[M]edical malpractice in the United States is now doing exactly the opposite of what it was originally intended to do. Medical malpractice laws were enacted to protect patients in the event of an egregious error in medical judgment or treatment. But today, our medical tort system is so distorted that it is threatening healthcare affordability (and) access to care—and some would argue it is jeopardizing quality of care”.  (KRC: Hantler, "Seven Myths ...", p. 8, quoting Scott Serota, President of the Blue Cross and Blue Shield Association, Costs, access problems tied to malpractice crisis, Reuters Health, Jan.15, 2003.)

• “In a survey conducted by the Department of Health and Human Services, over 76 percent of doctors surveyed expressed concerned that malpractice litigation has hurt their ability to provide quality care to patients”.  (KRC:  HHS Report, "Confronting ...", p. 4)

•  “A recent survey of physicians revealed that one-third shied away from going into a particular specialty because they feared it would subject them to greater liability exposure. When in practice, they engage in defensive medicine to protect themselves against suit.  They perform tests and provide treatments that they would not otherwise perform merely to protect themselves against the risk of possible litigation”. (KRC:  HHS Report, "Confronting ...", p .4)

• In a nationwide survey of 300 practicing physicians and 200 other medical professionals, 43% of the doctors reported that they have considered leaving medicine because of the malpractice liability system.  (Harris Interactive, Health Care News, Volume 3, Issue 2, February 7, 2003)

• “The insurance crisis is less acute in states that have reformed their litigation systems. States with limits of $250,000 or $350,000 on non-economic damages have average combined highest premium increases of 12-15%, compared to 44% in states without caps on non-economic damages”.  (KRC:  HHS Report, "Confronting ...", p. 14)

• "Furthermore, there is strong public support for continued efforts to fix our broken medical liability system. A January 2005 survey by Public Opinion Strategies/Frederick Polls (for the AMA) shows that 73 percent of voters support a national law to limit the amount a jury can award in damages to compensate for pain and suffering in a medical liability lawsuit. These findings are consistent with the results of a Gallup poll released on February 4, 2003, which show that 72 percent of those polled favor a limit on the amount patients can be awarded for pain and suffering."  (KRC: AMA Statement, Feb 17, 2005, p. 13)

The Liability Crisis

• "A 2003 report by the Blue Cross/Blue Shield Association showed that 56 percent of Blue Cross/Blue Shield plans in crisis states report that physicians are leaving their practice, retiring, or no longer performing some high-risk procedures."  (KRC: AMA Statement, Feb 17, 2005, p. 3 citing Blue Cross Blue Shield Association, The Malpractice Insurance Crisis: The Impact on Healthcare Cost and Access, 2003)

• No doctor is safe from Trial Lawyers, Inc.  A 2002 Medical Economics survey of 1,800 physicians found that 58% had been the target of a lawsuit. (KRC: Manhattan Institute, Trial Lawyers, Inc., p. 12)

• More than 70 percent of tens of thousands of lawsuits are found to be without merit, but each requires a costly legal defense.  (Richard E. Anderson, M.D., The Doctors Company for the Physician Insurers Association of America, July 17, 2002)

• “The number of million-dollar plus awards has increased dramatically in recent years. In 1994-1996, 34 percent of all verdicts that specified damages assessed awards of $1 million or more. This increased by 50 percent in four years; in 1999-2000, 52 percent of all awards were in excess of $1 million.  There have been 21 verdicts of $9 million or more in Mississippi since 1995 – one of $100 million. Before 1995 there had been no awards in excess of $9 million.”  (KRC:  HHS Report, "Confronting ...", p. 9)

• “In 2000, the median jury award for malpractice increased 43% to $1 million.  By 2001, 52% of all awards exceeded $1 million…In 2002, three of the top ten verdicts in the nation -- $94.5 million, $91 million, and $80 million – were returned in malpractice lawsuits”. (KRC: Manhattan Institute, Trial Lawyers, Inc., p. 12  citing Shannon and Boxold,  Jury Verdict Research  2002; Press Release, Jury Verdict Research; Tanya Albert, Malpractice Awards Hit Jury Jackpot)

• “Mirroring the increase in jury awards, settlement payments have steadily risen over the last two decades. The average payment per paid claim increased from approximately $110,000 in 1987 to $250,000 in 1999.46 Defense expenses per paid claim increased by $24,000 over the same period”.  (KRC:  HHS Report, "Confronting ...", p. 10)

• “The majority of all malpractice suits are weak or bogus, but the huge awards and the millions of dollars required to defend even spurious actions have driven up malpractice insurance rates beyond what many doctors can afford.  Between 2002 and 2002, rates typically rose between 30% and 75% with even larger increases in some crisis states”. (KRC: Manhattan Institute, Trial Lawyers, Inc., p. 12

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