MEDICAL MALPRACTICE REFORM: Critical Condition

By PAUL HARASIM

REVIEW-JOURNAL

As Gina Greisen drove to the office of her gynecologist, she never thought she and her doctor would soon debate the U.S. Constitution in the examination room.

During her short drive, she did think about how close she felt to Dr. Florence Jameson.

“I remembered how my grandmother, my mother and me and also my daughter-to-be were once in her office together,” she said. “My daughter showed up on a sonogram. We were so happy when Dr. Jameson pointed out my daughter inside me.” Soon after Greisen arrived at Jameson’s office, however, her warm memories gave way to a new reality. A member of the physician’s staff asked her to sign a document that carried a message in bold letters:

“BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL.”

“I couldn’t believe what I was reading,” the 37-year-old Greisen said as she watched her daughter Erika play in front of her parents’ Las Vegas home. “What an inappropriate, cold thing to be in a doctor’s office. I had no intention of ever suing Dr. Jameson. I loved her. But are you supposed to give away your constitutional rights to go to the doctor?”

When Jameson entered the examination room, Greisen noted that the physician seemed upset. “She wanted to know why I hadn’t signed,” Greisen said. “She didn’t care about my belief in the Constitution. She had always been so warm, but now she was just cold.”

A week later, Greisen received a certified letter from Jameson. Because of the malpractice crisis, Jameson wrote, she could “no longer accommodate all of the patients.”

“I was stunned,” said Greisen, who is studying to become a real estate agent. “I had just gone through a cancer scare and she just dropped me. Your OB-GYN is someone that takes care of you in your most intimate places and the form letter told me to call the Clark County Medical Society for a referral. I remember thinking, ‘What in the world is happening in Las Vegas?’ “

What is under way, suggests Dr. Michael P. Colletti, president of the Clark County Medical Society, is the rapid decline of medical care in Nevada.

“Unfortunately, over the last few years, it (medical care) has declined and continues to do so at an alarming rate,” he told colleagues during his installation speech.

“Many physicians, especially those hardest hit by skyrocketing insurance premiums, have left the state, retired early, or limited their malpractice exposure by no longer performing high-risk procedures,” he added. “Thirty years ago, it would have been unthinkable for a physician not to take care of the sickest patients or those in most need because they were concerned about being sued.”

Now, as Greisen knows, it is routine.

Today, fear, not reason, Jameson concedes, often rules the day for physicians.

“The fear of lawsuits and the increase in the cost of malpractice insurance weighs on you in ways that you can’t even imagine,” Jameson said. “You start doing things you never thought you’d do. The hardest thing I’ve ever had to do was to give those agreements to my patients to sign. I was literally shaking when I did it. But I’ve got to protect myself. It was kind of a litmus test. It gives you a sense of where people are coming from. It lets me see if I can trust you. Whether they sign or not isn’t as critical as their reaction to the request. Not everybody who didn’t sign was let go as a patient. I had to feel comfortable, get the right vibrations. It was kind of woman’s intuition, if you know what I mean.”

Competing questions

Those most knowledgable about the medical malpractice issue in Nevada, including many doctors and trial lawyers, agree something has to be done. But they often disagree about what is wrong with the system and how those flaws should be fixed.

Doctors point to rising medical malpractice premiums that they attribute to voracious trial lawyers plying ever-greater malpractice payouts from jurors and insurance companies.

Their prescription is Question 3 on the Nov. 2 ballot. It would limit the amount of money an attorney could make off a malpractice case and shorten the statute of limitations in medical malpractice actions.

Question 3, which physicians call Keep Our Doctors in Nevada, also would set a $350,000 cap on damages for pain and suffering in all cases. It would not limit other types of damages, such as recovery of medical expenses and lost wages. The state already has a cap on noneconomic damages, but current law provides for exceptions. Doctors want to remove those exceptions. Recovery of economic damages, including loss of future earnings and medical expenses, would not be limited under Question 3, but awards could be made in periodic payments rather than a lump sum.

Trial lawyers point to studies that indicate doctors are making more mistakes than ever before, and they contend a key insurer pulled out of Nevada not entirely because malpractice payouts are rising, but also because the company was forced to consolidate in the wake of catastrophic investments in an array of ventures, including Enron.

Trial lawyers are pushing Questions 4 and 5 on the November ballot. Both target the $350,000 cap.

If Question 4 succeeds, there would be no cap, unless insurers cut malpractice premiums by 10 percent. If Question 5 succeeds, the cap would remain, but so would the existing exceptions.

The debate surrounding these rival measures rages in the news media and in political advertisements, and each side is well-armed with studies and statistics. But for some people it is more than a policy debate.

Dr. Allan Boruszak closed his Nevada practice in June and now delivers babies in rural North Carolina.

“I had 21 years of experience in Las Vegas,” Boruszak said. “I had done more than 4,000 deliveries. I found it very emotional to leave. My patients and I cried together.”

Boruszak, who is widely regarded by physicians and trial lawyers alike, cited the rising cost of medical malpractice insurance. He said his malpractice premiums more than doubled, from around $60,000 a year in 2000 to $150,000 in 2004. OB-GYNs pay an average malpractice insurance premium of $41,000 in North Carolina.

In a telephone conversation from his North Carolina home, Boruszak said it is critical that physicians look at all areas of malpractice insurance reform if they want truly fair premiums, including better checks on the insurance industry itself and more reliable discipline of physicians.

“I think we have to look at all areas if we really want positive change,” Boruszak said. “If we can weed out some problems, the less people have to pay in malpractice insurance. I think reform all has to work together.”

A damaging doctor

The argument that rising malpractice premiums are forcing doctors to leave Nevada is central to the doctor-initiated Question 3. One television advertisement shows a line of people wearing operating- room scrubs walking toward the state line.

But the true number of doctors who have left Nevada is anybody’s guess. The General Accounting Office was unable to reach a figure, but deemed the statistics supplied by Nevada physicians to be exaggerated, anecdotal and inaccurate.

What is known is that Nevada’s doctors are part of the highest paid profession in the United States. The seven top-paying occupations in the country in 2002, according to the Bureau of Labor Statistics, were doctors: in descending order, anesthesiologists, internists, obstetrician/gynecologists, surgeons, pediatricians, psychiatrists, and family and general practitioners.

The Medical Group Management Association reports that in 2002 the median compensation for doctors, after business expenses that include malpractice insurance payments, ranged from $150,000 to $306,000. Doctors spend 3.9 percent of their practice incomes on malpractice insurance, according to the Centers for Medicare and Medicaid.

“We, as physicians, have become very concerned about protecting our assets,” said Colletti, the medical society president.

Declining reimbursement rates, coupled with increasing malpractice insurance premiums and office expenses, have made obstetrician/gynecologists particularly nervous about their assets. Fifteen years ago, back when health care insurers would routinely pick up the tab, physicians billed up to $5,000 for a delivery. Now, with managed care in vogue, they have to accept around $2,000. In an attempt to keep their same lifestyle, they have to deliver more babies, and perhaps make more mistakes. For doctors who try to go it alone, the financial crunch has been difficult.

“The day of the solo practitioner is about over,” Boruszak said. “I was having to hire extra people to bill the insurance companies to get my money. You have to be part of a group to keep costs down.”

State records show that the number of doctors with active licenses and business and-or home addresses in Nevada has increased every year since 1999, though officials caution these numbers do not tell the whole story.

“The State Board of Medical Examiners tracks the number of new and active licenses for medical doctors in the state of Nevada, however it has no mechanism in place to determine how many of these doctors are currently practicing medicine, seeing patients, reducing the services they provide or leaving the state,” board Executive Secretary Tony Clark said.

At least one of the doctors who left Nevada will not be missed. Before he surrendered his license in 2001, Las Vegas orthopedic surgeon Dr. Francis G. D’Ambrosio racked up more than 50 settlements and $14 million in malpractice payouts.

Doctors and trial lawyers blame D’Ambrosio, who still has additional malpractice cases pending in Nevada, for some of the increase in medical malpractice premiums.

In an affidavit filed earlier this year, Dr. Carl Noback said he once asked D’Ambrosio how he coped with the large number of malpractice cases filed against him.

“He stated it was no big deal and that he figured he had about five years in a practice location before they would all catch up with him, at which point he would move,” Noback said in the affidavit.

Noback said he also recalled a meeting with D’Ambrosio and Dr. James C. Thomas regarding billing.

“There was a discussion between Dr. D’Ambrosio and Dr. Thomas as to which one of them was going to win the ‘green jacket.’ The awarding of the ‘green jacket’ was timed in concert with the Master’s golf tournament which awards a ‘green jacket’ to the tournament champion and represented a conceptual award for the ‘Master of Billing,’ who billed the most for the prior year.”

John Cotton, attorney for D’Ambrosio and Thomas, said they deny Noback’s claims.

Allegations of medical mistakes are not limited to D’Ambrosio:

— The Institute of Medicine in March 2000 estimated between 44,000 and 98,000 people die each year in hospitals because of preventable errors.

— The Centers for Disease Control and Prevention has reported 2 million hospital patients die every year from preventable infections.

— And the Journal of the American Medical Association has estimated that physician negligence causes the equivalent of one jumbo-jet crash every three days.

Relatively few physicians are responsible for most of the injuries. According to the liberal advocacy group Public Citizen, 5.4 percent of the doctors are responsible for 56.2 percent of medical malpractice payments. More than 80 percent of doctors in the United States have never had a claim settled against them.

Many patients who are injured never file malpractice lawsuits.

Dr. Richard G. Roberts, former chairman of the American Academy of Family Physicians, wrote: “About one in 50 hospitalized patients is injured due to negligence, and yet only one in 10 of those files a lawsuit and, among those filing suits, only one in 20 receives money; there is more malpractice committed than is recognized, litigated or compensated. … Plaintiffs in most cases are not ‘gold digging.’ The vast majority have outcomes none of us would want for ourselves or our loved ones.”

The Nevada Board of Medical Examiners receives about 1,000 complaints a year and acts on fewer than 20 of them. In the past 10 years, the board reported it either temporarily suspended or revoked a total of 74 licenses.

“They don’t look real hard for problems,” said Dr. Leonard Kreisler, former chief of staff at University Medical Center. He said the board ignored two documented cases he brought against doctors several years ago.

Clark County juries have shown a willingness to levy substantial verdicts in malpractice cases. Malpractice settlements and jury awards in Clark County went from around $13 million in 1999 to more than $37 million in 2001. The three largest jury verdicts in 2001 combined to exceed $16 million.

Attorneys generally take about 40 percent of each malpractice payout for contingency fees and expenses, meaning that of the $16 million awarded by juries in the three largest verdicts of 2001, about $6.4 million went to attorneys. Doctors think attorneys profit too much from medical mistakes, and want to limit their fees. “If a patient is hurt, more of the money should go to the patients,” said Dr. Rudy Manthei, head of the Keep Our Doctors In Nevada campaign.

Attorneys argue that it often costs them more than $100,000 on investigators and expert witnesses to prepare for trial.

“If we lose the case, you have to remember we’re out all our expenses, not to mention our time,” said trial attorney Gerald Gillock. “And remember these cases often take five years to come to trial.”

The St. Paul Companies cited the increasing jury awards when it pulled out of the state in 2001. According to one insurance company executive, the state’s insurance market is still suffering from the effects of that pullout.

In the early 1990s, St. Paul purchased the Nevada Medical Liability Insurance Co., which had been highly profitable and enjoyed a reputation of solid underwriting, in other words, checking on a doctor’s claim history before issuing a premium.

But St. Paul, anxious to corner the insurance market in this state, waived underwriting for Nevada State Medical Association members and reduced rates below the actual cost of providing insurance.

Like many insurance companies seeking to increase market share, St. Paul expected its investments would offset the low premiums. But after gaining 60 percent of the business in Nevada, the malpractice claims came pouring in and St. Paul’s investments soured. The company has reported it lost more than $100 million when Enron collapsed.

St. Paul left a huge void when it left Nevada. Other companies that did solid underwriting could not offer premiums anywhere near the artificially low ones given by the company.

Trial lawyer Richard W. Myers, writing in the April 2002 edition of the Clark County Medical Society newsletter, identified two major causes for the increase in medical malpractice premiums.

Myers, who enjoys a reputation for fairness among physicians, said St. Paul engaged in “head-in-the-sand” underwriting. And he termed D’Ambrosio “a one man disaster similar to a hotel fire or airplane crash.”

The title of his column: “The St. Paul Crisis and Dr. Rotten Apple.”

Nevada in ‘crisis’

The American Medical Association agrees the medical liability coverage system is in upheaval. Nevada is one of 20 states the group says is in “crisis.”

Finding even a solid first step toward a workable solution in the malpractice insurance arena has stymied policy-makers.

In 2002, the state Legislature passed in a special session a malpractice reform bill that limited pain and suffering awards in malpractice cases to $350,000, but legislators included exceptions, such as in the case of gross negligence. The hope was that insurance companies would see their expenses drop and would consequently lower their malpractice insurance premiums.

It is impossible to say whether the fix would have worked. Not one civil case filed since the legislation passed has proceeded to completion.

Doctors were certain the reform measure would not work because it contained exceptions, so they immediately began working to get Question 3 on the ballot. Trial lawyers countered with two initiatives of their own, Questions 4 and 5, and the November election showdown was set.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, isn’t pleased that physicians didn’t give the new law a chance. “I would rather have seen people let the legislation we enacted try to work,” she said.

Question 3 also would repeal joint and several liability for economic damages.

In other words, a single defendant among multiple defendants in a medical malpractice action, often a hospital and several doctors, would be required to pay the injured person only the share of damages attributable to that defendant’s wrongful conduct and would not have to pay the share attributable to the wrongful conduct of another defendant.

“I think doctors should be careful of what they wish for,” said Gillock, the trial lawyer. “I have never gone after more than a doctor’s $1 million insurance policy in the past. If the award was more and the hospital had more insurance, we could work with that under the law. But under this law, we will have no choice but to go after the physician. Let’s say the verdict holds him responsible for $5 million. I will have no choice but to go after his assets for life. He can’t file bankruptcy under this law. He’ll be paying for life. There’s no question about it. Hospitals, of course, love this.”

“We’ll take our chances,” Manthei responded. “This is fair.”

Boruszak, the doctor who fled the state for rural North Carolina, sees nothing fair about what is playing out in Nevada.

“I wanted to stay in Las Vegas,” he said. “I wanted to make it work. I guess I just wasn’t a good enough businessman to stay there in today’s world of malpractice insurance and low reimbursements for delivering babies from insurance companies. I raised my kids in Las Vegas and I thought I would continue to live there until the day I die. I looked at every option. I tried to increase my office hours and increase my patients. I even tried to set up a platinum patient program where patients, for an extra fee, would get extra attention and the ability to get in to see me very quickly. But nothing worked. My credit is destroyed. As far as I’m concerned, the business of the solo practitioner is dead in Nevada.”

MALPRACTICE FAST FACTS

— U.S. doctors spend an average of 3.9 percent of their practice incomes on malpractice insurance. They spend an average of 52.5 percent on their own pay, and 31 percent on such overhead expenses as office payroll and rent. (Source: Medicare)

— In 2003, insurers made 15,295 malpractice payouts. That is 129 more than in 1994, when there were 15,166 payouts. (Source: National Practitioner Data Bank)

— In 2002, nearly 70 percent of medical liability claims were closed without payment to the plaintiff. Of the 7 percent of claims that went to jury verdict, doctors won 82.4 percent of the time. (Source: American Medical Association)

— Physicians who win at trial spent an average of $91,803 per claim. In cases where the claim was dropped or dismissed, the cost to doctors averaged almost $16,160 per claim. (Source: American Medical Association)

— In 2003, there were 2.19 malpractice payouts per 100 doctors. In 1994, there were 2.46 payouts per 100 doctors. (Source: Public Citizen)

— In 2003, the average malpractice payout was $291,378 in 2003. In 1994, it was $184,787. (Source: Public Citizen)

— The seven top-paying occupations in the United States in 2002 were doctors: in descending order, anesthesiologists, internists, obstetrician/gynecologists, surgeons, pediatricians, psychiatrists and family and general practitioners. (Source: Bureau of Labor Statistics)

— The median compensation for doctors, after business expenses that include malpractice insurance payments ranged from $150,000 to $306,000. (Source: Medical Group Management Association)

— Between 44,000 and 98,000 Americans die in hospitals each year because of preventable medical errors. (Source: Institute of Medicine)

— Annual loss attributed to medical errors is estimated at $17 billion to $29 billion. This includes lost income and money spent on additional medical treatments. (Source: Institute of Medicine)

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