Medical Malpractice Crisis
Florida’s Recent Experience
As summarized in several previous Circulation Mini-Reviews1–3 and elsewhere,4 the United States is experiencing a growing deficit in cardiovascular physicians that is made worse as cardiovascular diseases become more prevalent. Important contributors to this deficit in the cardiovascular workforce and other specialty workforces are the high and rising costs of malpractice premiums in the majority of our states.5 As cardiovascular specialists in Florida (cardiothoracic surgery and cardiology), we are at the center of this crisis. In the present review, we will examine the problem along with recent activities related to this crisis in Florida and discuss their implications.
The American Medical Association stated in June 2002, that the majority (>40) of our states had major problems in that members of high-risk specialties were leaving or considering leaving their practices. Then–AMA President, Richard F. Corlin, MD, stated, “doctors are disappearing from American communities on a regular basis because of skyrocketing medical liability insurance premiums and an out-of-control legal system. As insurance becomes unaffordable or unavailable, and the legal system produces multi-million dollar jury awards on a regular basis, physicians are forced to limit services, leave practices, or relocate—all of which seriously impede patient access to high quality health care.”
Florida (along with Georgia, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Washington, and West Virginia) was among the 12 states considered to be at crisis level. According to the Department of Insurance in Florida, in 1975, total indemnity payments for professional liability cases were $10 271 090. By 2001, this had increased 3074% to a total indemnity payout of $326 052 228.
Comparative Liability Crisis Statistics
A survey of comparative 2002 malpractice insurance premiums revealed that an invasive cardiologist in Los Angeles paid $16 148 for $1 000 000 coverage, whereas the same specialist in Miami paid $106 497, highest in the United States. Cardiovascular surgeons in Los Angeles paid $42 292, whereas a Miami surgeon paid $212 994. Furthermore, across the states, the frequency of claims, based on number of claims per 100 000 physicians, has been relatively stable since 1991, with a national high of only 5.77. In spite of this, Florida claims, frequency per 100 000 population, increased from a low of 4.82 in 1998 to a high of 7.56 in 2000. Claims frequency in Florida was exceeded only in Nevada, West Virginia, Pennsylvania, and Montana. Since 1996, commercial insurance premiums for Florida physicians increased 64%, although nationally there was an increased average of only 26%. Average malpractice premium per doctor in Florida is 55% greater than the national average. This increased payout and increased frequency of claims caused more than 30 commercial malpractice insurance companies to leave the Florida market between 2000 and 2002, with fewer than 10 remaining to write policies. Insurance became not only unaffordable but also in many instances unavailable for some specialties.
Total medical meltdown and complete chaos in healthcare delivery were prevented in 2002 by existing Florida law, which permits physicians to self-insure, “go bare,” without being required to carry malpractice insurance in order to maintain licensure to practice medicine. Florida statutes simply require that physicians notify their patients that they do not carry liability insurance and that the physician is responsible for up to $250 000 in payment should there be a court settlement against the physician in a malpractice case. No surety bond or letter of credit is required for licensure. This situation has fostered a new cottage industry in Florida—namely, personal asset protection for physicians. As a result of the liability insurance crisis in Florida, it is estimated that 30% to 40% of South Florida physicians, including many cardiologists and cardiovascular surgeons, now practice without any liability insurance and face the possibility of declaring bankruptcy in the event there is a large financial settlement against them in a malpractice case.
This disastrous malpractice insurance climate in August 2002 prompted Florida Governor Jeb Bush to appoint a select task force on healthcare professional liability insurance. This task force consisted of 5 renowned individuals who were presidents or trustees of Florida universities and included Donna Shalala, current President of the University of Miami and past US Secretary of Health. The task force held 10 meetings during which they heard testimony from both local and national experts on medical liability insurance. Representatives of various healthcare professions, lawyers, and insurance executives testified. This task force, after hours of independent research and deliberation, issued a comprehensive report of more than 300 pages, in addition to 13 volumes of reports, presentations, letters, and testimony. Their report, issued in January 2003, included 60 recommendations to the Florida Legislature, many of which were extracted from the successful California reform, the Medical Injury Compensation Reform Act (MICRA), passed in 1975. These recommendations, they believed, would be effective in resolving the liability crisis in Florida. They addressed proposed changes in physician discipline, patient safety, the insurance system, and the tort system. They concluded that although all of these recommendations are important, “the most important one is a cap on non-economic damages in the amount of $250 000.00.” This task force report provides a timely and outstanding resource for all individuals who are engaged in tort reform anywhere in the United States.
A similar and very useful comprehensive report on the liability insurance crisis, titled Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System, was issued in July 2002 by the US Department of Health and Human Services.6
Armed with these two excellent studies on the liability crisis and the task force recommendations, the Florida Medical Association joined the Florida Hospital Association to establish the Coalition to Heal Healthcare in Florida. This coalition included representatives of the Florida Osteopathic Medical Association, all recognized specialty societies, insurance companies, the Florida Chamber of Commerce, and business leadership groups throughout the State of Florida. Although there were members of this group who had a different agenda and some unique approaches to the problem, all were able to negotiate their differences and reach consensus on the necessary components that were deemed the best solution for the tort reform initiative in Florida. It was vital to bring all of these players together in the spirit of unity to permit the group to speak with one voice to legislators. This was required in order to defuse the modus operandi of the trial attorneys, which is to divide and conquer.
This healthcare coalition was able to successfully lobby the Florida House of Representatives and sustain passage of a bill that contained most of the 60 recommendations of the Governor’s task force. Much of the credit for this accomplishment was due to tremendous grassroots lobbying by physicians at the local community level, as well as numerous rallies that included all types of healthcare providers at many Florida county courthouses. These rallies culminated in a giant rally in Tallahassee on the grounds of the State Capitol, where more than 4000 physicians captured media and public attention in Florida. Surveys of Florida physicians at that time indicated that almost one half of doctors were considering reducing the scope of their practices, retiring early, or leaving the state if relief was not provided by the Florida Legislature. The crisis was further emphasized as several large specialty groups across the state took “leaves of absence” from practice and trauma centers were threatened with closure because of lack of surgical specialty coverage (eg, neurosurgery). In addition, many obstetricians stopped delivering babies, limiting their practices to only gynecology.
Although the Florida House of Representatives bill included a $250 000 cap on noneconomic damages, the Florida Senate failed to move forward on the issue and did not pass meaningful legislation during the regular session in 2003. This led to Governor Jeb Bush calling legislators back to Tallahassee for not one, not two, but three special sessions until a consensus was reached with the passage of a tort reform bill in August 2003. The final bill included a cap on noneconomic damages of $500 000, which, unfortunately, could be increased to $1 000 000 in certain egregious cases of death, paralysis, and other serious complications from medical malpractice. Notably, a cap of $150 000 was placed on emergency room cases, which could be increased to $300 000 in egregious cases. This cap covers not only emergency room physicians but also specialists who are called in to care for emergency room problems.
Passage of this legislation, nevertheless, has not resulted in significant decreases in medical insurance premiums because the cap on damages must withstand the test of the Florida Supreme Court that will certainly occur over the next several years. To this end, in 1986 the Florida Legislature passed a tort reform package that included a $450 000 cap on noneconomic damages. In 1987, however, the Florida Supreme Court declared the cap on noneconomic damages unconstitutional. Insurers, of course, are concerned that the same result may occur with this new legislation. Therefore, any relief in liability premiums must be delayed until caps have been tested in Florida’s Supreme Court. This underscores the importance of having Supreme Court judges who are sympathetic to circumstances such as the medical liability crisis, the need to retain specialty physicians, and most importantly, patient access.
Limiting Attorney Contingency Fees
An important element of successful liability reforms such as MICRA is a limitation on attorneys’ contingency fees, which was not addressed by the Florida Legislature. It was unable to act on this important component of tort reform because the Florida Constitution uniquely prevents legislative interference with attorney fees, leaving regulation only to the Supreme Court. In view of this unique problem, the Florida Medical Association is currently sponsoring an historic initiative to place a constitutional amendment on the ballot in November 2004, which will limit attorneys’ contingency fees in a fashion similar to the MICRA guidelines. This initiative requires 450 000 signed petitions by registered voters that are certified by election supervisors. Currently, physicians throughout Florida are asking their patients to sign these petitions, and thus far, patients have been very concerned and willing to support the amendment. Recent polls in Florida have indicated that more than 70% of Floridians do support limitations on attorneys’ contingency fees. In response to this initiative, the Florida Trial Bar, in an attempt to intimidate healthcare providers, has been gathering signatures for petitions for amendments that would be onerous to physicians. For example, one is commonly referred to as “3 strikes—you’re out.” This amendment would mandate suspension of a physician’s license if he or she had 3 malpractice judgments against him or her. These deplorable tactics have only served to strengthen enthusiasm and support of the physician community for obtaining needed signatures to place the amendment on the November 2004 ballot. If passed, coupled with limits on noneconomic damages, it is hoped that some reasonable premiums for liability insurance in Florida will be restored in a few years. Otherwise, patient access problems in Florida will worsen, and the quality of health care will deteriorate, perhaps until a solution at the federal level can become a reality.
Summary and Recommendations
We believe there are several aspects to the Florida experience that are relevant to the tort reform initiative at both the state and national levels. Physicians must be willing to make financial commitments to support campaigns of candidates who embrace their agenda. They must also be willing to dedicate time and effort to intensive lobbying and grassroots advocacy. Very important is the development of a comprehensive public education program through patient contact and community forums. There must be constant emphasis on the serious impact of the malpractice insurance crisis on access to quality health care. Similar attention at lobbying efforts should be directed to selection of state Supreme Court Justices who, in the final analysis, can destroy any legislative victories that physicians and patients work so diligently to achieve. Finally, unity of message and purpose is critical to success. Healthcare providers must put aside individual agendas to accomplish the ultimate goal of tort reform, which, in the final analysis, will benefit everyone. Working effectively together, we can prevail and resolve this crisis that threatens to destroy the best healthcare delivery system in the world.
The opinions expressed in this article are not necessarily those of the editors or of the American Heart Association.
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US Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System. July 24, 2002. Available at: http://aspe.os.dhhs.gov/daltcp/reports/litrefm.pdf. Accessed May 21, 2004.