Don’t fix what isn’t broken: Malpractice reform doesn’t work
Hawaii insurance commissioner J. P. Schmidt's column of Feb. 17 advocating arbitrary limitations on the rights of patients injured by substandard medical care overlooks important safeguards adopted by the Legislature in 2003 that have worked well to protect both doctors and patients.
In 2003, the Legislature adopted a requirement that patients injured by substandard medical care could not file a claim until another doctor in the same specialty confirmed that the claim was meritorious. This gatekeeper process prevents the filing of frivolous claims and ensures that patients with legitimate claims have a fair chance to seek compensation for their injuries caused by malpractice.
Records of the Department of Commerce and Consumer Affairs show that the law is working remarkably well. The DCCA found no frivolous cases in 2004 and 2006 and just one frivolous case in 2005 and 2007. DCCA records also show that malpractice claims have fallen dramatically from 173 claims in 2001 to just 94 claims in 2007. That is an almost 50 percent reduction in claims. Hawaii's law that prevents the filing of frivolous claims shows that prevention is indeed worth a pound of cure.
Schmidt points to California's MICRA as the solution to high medical malpractice insurance premiums. Yet there is no correlation between caps on noneconomic damages and the cost of malpractice insurance. After 30 years of debate about whether noneconomic damages caps work or not, the California court ordered an actuarial analysis of the issue. The insurance industry admitted in a response filed in court on April 30, 2003, that capping noneconomic damages "did not substantially reduce the relative risk of medical malpractice insurance in California." This is because large payments for economic damages, such as lifetime medical care for brain-damaged infants, drive the price of insurance.
In fact, California's arbitrary restriction on noneconomic damages has not made malpractice premiums affordable. For example, in 2004, a Los Angeles obstetrician -- one of the more high-risk practices -- paid $66,100 for insurance, while obstetricians in a few other mainland cities paid more. By 2007 -- just three years later -- the Los Angeles rate had increased 30 percent to $86,348. In contrast, that premium is 40 percent higher than the premium charged by the same insurance company for an obstetrician in Hawaii. These facts show that the California approach of capping damages does not work. In contrast, the Hawaii approach of requiring that a claim be found meritorious by a doctor before a claim can be filed does work to hold down malpractice insurance rates.
The medical industry and insurance commissioner blame the shortage of doctors willing to serve on call in emergency rooms on the high cost of malpractice insurance. Yet a state study in 2006 found that the primary causes were extremely low pay for the service, disruption of doctors' normal office schedules and family lives, and the emergence of outpatient surgical centers, which make hospital staff status unnecessary. The impact of the legal system was found to be inconclusive in comparison to other primary reasons. The state study found that doctors' pay for emergency services has been dramatically reduced over the years, citing examples of a 65 percent reduction for knee surgeries and payment for hip surgeries now lower than it was 30 years ago.
The state study also proves that capping noneconomic awards is not a solution, finding that "California's emergency care system has been in crisis for many years." After 30 years with damage limitations, even California is unable to maintain emergency departments in hospitals.
While Hawaii has difficulty recruiting and retaining doctors, the same can be said of many other professions and for the same reasons. Our small island location has problems attracting and keeping teachers, police officers, nurses, university professors, symphony musicians and many others. The reasons are across the board: low pay, high cost of living and unaffordable housing.
If we really want doctors to stay in Hawaii and volunteer to help in our emergency rooms, the health insurance industry and government health care programs must value their services fairly. Doctors invest time, effort and money in at least nine years of education, with some specialties requiring additional training. They deserve to earn a fair living and be paid for their valuable services. In the same way, patients harmed by substandard medical care who must live with its consequences deserve fair compensation commensurate with their injuries -- without arbitrary limitations.
Your Feb. 8 editorial that insurance controls and patient safety must be the focus of any malpractice legislation correctly and rationally assessed the facts of the issue.
Rick Fried is a Honolulu attorney with a national reputation in handling medical malpractice cases. He frequently conducts teaching seminars in tort law.