Tort reform is one of the most frequently discussed topics among clinicians and politicians these days. Tort reform has become a slogan for measures that would modify the current medical liability system. In its political context, "tort reform" refers to proposals aimed at limiting the number of legal claims, and the amounts awarded, in cases prosecuted by personal injury lawyers. These high-dollar awards are perceived to unfairly burden insurance policy holders with high premiums.

'Pain and Suffering' Caps

Many physician groups, particularly the American Medical Association, have labeled this issue a "crisis" and have spent considerable sums lobbying for legislation that would change medical malpractice liability law.

Tort law, like much of our legal system, traditionally is a matter of state "common law" and legislation. A number of states have addressed this issue by passing measures that modify the tort liability and resolution system. Now on the federal level, responding to the requests from the medical profession, the current administration is proposing significant legislative initiatives to modify the system, including imposing uniform limits applicable to all states.

Proposed legislation would address the problem by attempting to legislate caps on the monetary amount that juries can award for "pain and suffering." A bill recently introduced into the Senate would cap awards for non-economic damages at $250,000 and place limits on attorney's fees and other damages that plaintiffs can collect in medical malpractice suits.

The Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act of 2005 aims to use caps on damages to lower liability insurance rates for physicians. Interestingly, the bill goes beyond simply applying liability caps to physicians and hospitals-it also would extend such liability limits to any entity providing health care products or services. Civil suits against drug makers, insurance companies and medical device manufacturers would be subject to the same caps on non-economic and punitive damages as suits against physicians.¹

Are Caps Effective?

Caps exist in 16 states and have been in place in California since 1975. The degree to which such legislated caps save money for the system is debatable, since research findings vary. A RAND Corp. study last year concluded that the California law had reduced net recoveries for plaintiffs by 15% and had cut attorneys' fees by 60%; defendant liabilities were trimmed by 30%.²

A more recent study of verdicts in 22 states performed by a Columbia University law professor concluded that caps have no effect on the size of the overall compensation awarded by juries, and that what seemed to influence outcomes were variables such as the severity of injury, the requirement for medical expert screening of cases and the election experiences of the judge.³ There is also doubt that caps really will work to limit overall compensation awarded to plaintiffs, since lawyers shift the damage awards to categories of compensation that are not capped.³

One perceived upshot of these limitations has been lawyers' reluctance to take medical malpractice cases, thus reducing the opportunity for victims of medical negligence to have access to the court system. It is also important to note that the defendants win 80% of medical malpractice cases that go to trial. And as we all know, many cases are settled before a suit ever goes to trial. Some believe that caps are futile and that they unfairly penalize less-fortunate group, such as the poor and the elderly, who have less economic means than others.³

Is It a Federal Matter?

Another issue is whether a federal remedy to the medical malpractice liability situation is necessary. Is this the most appropriate way to approach an issue that is primarily the purview of the states, since they license and regulate the practice of medicine? Most would agree that the goals for the reform of medical malpractice liability include limiting overall health system costs, adequately compensating the victims of medical mistakes and providing incentives for health providers and facilities to avoid errors. Many believe that more needs to be done within the medical care system to reduce the number of errors. States have dealt with these matters for years and may be in the best position to solve them.

Tort reform has been front and center in a number of states whose legislatures have struggled with the competing interests of the medical profession and the trial lawyers. For example, last year Maryland's medical malpractice carrier announced it would increase premiums by 33%. This led to considerable wrangling between the governor and the legislature, who differed on remedies to the issue. The final legislative solution, in addition to limitations being placed on non-economic damages, was for the state to levy what essentially is an HMO users' fee to subsidize physician malpractice insurance premiums.

Patients and PAs in the Middle

In confrontations of this sort, consumers seem to be caught in the crossfire. One observation of interest throughout the discussion in Maryland was the bewilderment of the general public, who, in the words of one person, saw this issue as "rich doctors fighting with rich lawyers."

This issue presents some difficult choices for the PA profession. On one hand, there seemingly is natural temptation to side with physicians on this issue, since most PAs are employees of physician practices. PAs sometimes are among the targets when physicians and health care facilities are sued, and these PAs share physicians' frustrations with the current system. On the other hand, PAs typically see themselves as advocates for their patients and espouse the rights of citizens to seek appropriate redress of alleged medical negligence.

The American Academy of Physician Assistants last year developed a well-researched policy statement on this issue. The statement, which was approved by the 2004 AAPA House of Delegates,⁴ holds that "it is critical to assure that any medical liability insurance reform in the United States treats patients fairly," and that "that tort reform alone is not the answer. Caps on non-economic damages may perhaps be appropriate if they are part of comprehensive medical liability insurance reform whose impact is borne equitably by attorneys, insurers, providers and patients."

On the matter of liability caps, the AAPA believes that a $250,000 cap on non-economic damages paid for medical malpractice is too low, according to the statement, and that "fair and comprehensive reform of the medical liability insurance system is needed."

The position statement continues: "Appropriate goals of a fair medical liability insurance system include compensating injured patients, deterring poor quality medical care, assuring affordable medical liability insurance and ensuring the availability of medical care."

The AAPA position seems far more reasonable and progressive than those of would-be reformers, who appear to approach this issue with biased and political motivations.

James F. Cawley is director of the PA/MPH program and professor and vice chair of the Department of Prevention and Community Health, School of Public Health and Health Services at The George Washington University in Washington. He also is professor of health care sciences at the university's School of Medicine and Health Science.

References

1. Glendinning D. Tort reform for nonphysicians sparks debate. American Medical News. February 28, 2005.

2. Lohr S. Bush's next target: malpractice lawyers. New York Times. February 27, 2005;sect 3:1.

3. Liptak A. Go ahead. Test a lawyer's ingenuity. Try to limit damages. New York Times. March 6, 2005;sect 4:5.

4. Medical Liability Reform and U.S. Health Care [position paper]. Alexandria, Va: American Academy of Physician Assistants. Adopted June 2004. Available at: http://www.aapa.org/policy/med-liab-reform.pdf. Accessed March 8, 2005.