What does tort reform mean for local doctors, insurance companies and you?
By Morgan Lord
Many of us have a vague idea of what the phrase “tort reform” means. But it’s just that—vague.
Tort reform is defined as setting limits for awards of noneconomic damages such as pain, suffering and mental anguish. Meaning, if a patient goes to the emergency room for stomach pain, and the doctor doesn’t check the patient’s appendix and it explodes a day later, the patient can sue the doctor for medical malpractice. Many states across the United States, including Kansas and California, have caps on damages at $250,000.
In an effort to clear up the collective fogginess, one should take a look at the local issues that seem to be at the forefront of Illinois tort reform. But when money, politics and healthcare are involved, unfortunately nothing is crystal clear.
Historically, Illinois enacted tort reform legislation in 2005, with a cap on compensation for injured patients—$500,000 for doctors and $1,000,000 for hospitals. Five years later, in Lebron v. Gottlieb Memorial Hospital, the Illinois Supreme Court, struck down both caps having determined they were unconstitutional. Currently, we are capless.
This is where politics comes into play. The proreform side would say we need the cap in order to lower the collective cost of healthcare. The antireform side would say that the cap never really affected settlements or insurance rates in Illinois during the five years in which it existed, and that caps do more harm than good. Opponents to reform would also argue that it makes it more difficult for injured people to file a lawsuit, obtain a jury trial and receive money.
As cited by reform opponents, the Center for Justice Democracy’s website: “Even if injured victims have a strong legal case, they probably won’t ever bring it because of the economic devastation they might face if they lose. That is why big corporations want this law.”
Others who are for reform, argue that if we put caps on damages, doctors (and insurance companies) will pay less if they lose a medical malpractice suit, it will stabilize premiums and keep doctors in Illinois, and doctors will minimize defensive medicine practices and will lower the number of precautionary tests they run on patients, which will in turn bring down the cost of healthcare.
Doctors Practicing in Hellholes
“Cook County is known for its high amount of lawsuits and costly awards,” says Dr. William Werner, Illinois State Medical Society (ISMS) president. “So we find ourselves practicing defensive medicine because of the climate we’re in.”
Defensive medicine is the practice of ordering additional tests beyond what is clinically indicated due to fear of a lawsuit. Doctors cover all of their bases and then some, ordering additional X-rays and tests and extra days in the hospital. “And it’s at a cost,” Werner says. “Cost estimates are at $5 billion a year—and up to $50 billion over the next decade.”
According to a 2010 article in the Archives of Internal Medicine, recent national survey data shows that nine in 10 physicians indicate that they have practiced defensive medicine. “Most physicians encounter defensive medicine,” Werner says. “It’s done to protect the physician and the patient.”
In Illinois specifically, according to an ISMS/ISMIE (Illinois State Medical Insurance Exchange) mutual survey from 2010, Illinois physicians confirm that they have practiced defensive medicine due to fear of lawsuits. Nine out of ten Illinois physicians (89 percent) responded that liability concerns have caused them to order more tests than are medically needed, and one-third of doctors indicate that they always order extra tests.
Liability fear findings include the following: 77 percent of Illinois physicians indicated that within the next two years they will reduce or eliminate high-risk aspects of their practices because of the liability threat; 82 percent of Illinois physicians responded that they view every patient as a liability risk; and 84 percent of Illinois physicians indicated that medical liability concerns led to extra patient referrals to specialists.
“In Illinois, the awards for noneconomic damages are out of line, to the extent that McLean, Madison and St. Clair counties are all labeled ‘judicial hellholes,’” Werner says. The American Tort Reform Foundation’s (a staunch supporter for tort reform) Judicial Hellholes program documents yearly reports focusing primarily on jurisdictions where courts have been radically out of balance. According to the foundation, Cook County was at the hellhole status, but was moved to the watch list in the 2011/2012 report. The 2012/2013 report was released in mid-December, and Cook County is still on the watch list.
Physicians and Tort Reform
“In Illinois, we’ve been advocating for medical liability reform for the past 30 years,” Werner says. “Promoting medical liability reform has been at the top of the Illinois State Medical Society’s list every year.”
Their initiative is threefold: “We need caps on noneconomic damages; stronger expert witness standards (the witness should be a practicing physician who specializes in the subject discussed); and an affidavit of merit process (where someone decides whether there were grounds for this case).”
Werner also advocates for the ideas of safe harbors and health courts, a court in which the judge, who has a law and medicine degree, makes the court decision over a jury.
Reform opponents are against the idea of a juryless court, but both sides would probably agree that proactive measures can be taken in the hospital and also by doctors to improve patient safety. “Some hospitals now use a checklist in the operating room as a way to promote the national patient safety campaign and minimize infection, which in turn improves patient safety and outcomes and reduces complications,” Werner says.
The High Cost for Insurance Agencies
According to Werner, medical liability insurance is still high compared to other states.
“Cook County is 10 times higher that some of the surrounding states; it’s just part of your overhead here, which is why many medical residents (about half) leave the state after school and why some physicians are retiring early,” Werner says. “Currently, the market is soft, so premiums are holding steady.” Nearly 60 percent of premiums nationwide held steady in 2012, about 26 percent decreased, and 15 percent of premiums increased, according to the Medical Liability Monitor Annual Rate Survey.
States with the lowest medical liability payments generally had stronger tort reforms, according to a recent American Medical Association (AMA) article. Most claims were settled out of court, with only 4 percent proceeding to a formal court judgment, and about 95 percent of payments were made by an insurance company, with the remainder paid by state funds, according to the same AMA article.
The Future of Torts in Illinois
Nothing is clear-cut; two sides still divide the state. Tort reform opponents say that restrictions such as caps on noneconomic damages infringe on patients’ rights, according to the Center for Justice and Democracy’s website; whereas many physicians and tort reform advocates say that state tort reforms keep premiums in check and help to ensure access to care.
There seems to be an attempt at clearing things up. But as Werner says, “In 2005, medical liability reform passed, but I’m not optimistic about it happening now.”
Published in Chicago Health Winter/Spring 2013