May 23, 2006

HEALEY TO FILE MEDICAL MALPRACTICE REFORM

Plan reduces skyrocketing insurance costs and improves compensation for patient

Lieutenant Governor Kerry Healey today proposed sweeping medical malpractice reform measures to tackle exorbitant insurance rates, curb the workforce crisis in critical specialties and ensure patients receive more compensation by cutting administrative costs and lawyer fees. The legislation will also include provisions to improve communication between doctors and patients.

“When some of our best doctors are driven out of specialty fields like neurosurgery and OB/GYN because of insurance costs, it’s a warning sign that our medical malpractice system is broken,” said Healey. “We need an improved system that is fair to both doctors and patients, that keeps high-risk specialties affordable and guarantees a higher percentage of any claims go to patients, instead of lawyers.”

Healey said there is an alarming need for medical malpractice reform due to escalating liability costs, which have a negative effect on the Commonwealth’s competitive position to retain and recruit physicians. Since 2001, there has been a 32 percent decline in the number of awards in the Commonwealth. Despite this reduction, the average award has increased by 41 percent leaving doctors with insurance rates that are not only extremely high, but have increased by 87 percent since 1999. Doctors are facing a significant increase of 5.9 percent for 2007.

The new plan aims to resolve claims prior to a trial as a quicker and less expensive alternative to litigating a malpractice claim in court. National studies have shown that the system does not adequately compensate those who have been injured with only 40 percent of the payment going to the patient. The remainder goes to administrative costs, mostly in the form of lawyers’ fees.

“We need to control the cost of liability insurance, so it doesn’t prevent physicians from practicing medicine and ensures patients’ access to timely care,”

Kenneth R. Peelle, MD, President, Massachusetts Medical Society. “In the long run, we need to design a system that fairly and quickly compensates patients who suffer avoidable injuries, and supports patient safety improvement. Lt. Governor Healey’s legislation provides both short-term and long-term solutions for the problem.”

To enhance communication between doctors and patients, the bill allows medical providers to disclose and, if appropriate, apologize for medical errors by making the disclosure or apology inadmissible in court. Physicians are currently discouraged from discussing medical errors with patients due to the threat of a lawsuit. At the same time, patients have a legitimate need to understand why a medical error has occurred and sometimes use the courts to force disclosure.

The health care plan reforms the current $500,000 cap on non-economic damages by eliminating loopholes under the current law. These loopholes have enabled plaintiff lawyers to circumvent the intent of the law and win damages well in excess of the harm caused to the patient.

High medical malpractice rates impact three areas of practice most acutely including, OB/GYN, neurosurgery and orthopedic surgery. Physicians who practice OB/GYN pay $105,000 or up to 40 percent of their income, neurosurgeons and orthopedic surgeons follow at $90,000 and $70,000 respectively. These rates are among the highest in the country and are significantly higher than those in neighboring states such as New Hampshire.

Such high rates have an impact on a patient’s access to care. Currently it can take up to 2 ½ years to fill a neurosurgery vacancy in Boston and fewer medical school graduates are pursuing this specialty because of the high insurance costs.

According to the Massachusetts Medical Society’s annual Workforce Study, almost 60 percent of doctors who practice OB/GYN reported that professional liability played a role in determining whether they would continue to practice in their specialty.

Orthopedic surgeons and neurosurgeons also reported malpractice insurance costs caused them to limit their scope of practice.

“Sharply escalating liability costs are threatening to erode the Commonwealth’s competitive edge in the area of medicine and are harming our ability to recruit and retain the best physicians,” added Healey.

Furthermore, doctors who are forced to pay high medical malpractice rates are more likely to practice defensive medicine causing them to order extra tests, occupying valuable resources and equipment that drive up health care costs.

To help ensure legitimate lawsuits are honored and frivolous ones are denied, the plan will tighten the state’s current tribunal system to help ensure that only meritorious medical malpractice lawsuits go to trial. The decisions of the tribunal are admissible in court to encourage settlement of lawsuits. This will help injured patients receive more compensation and avoid the often arduous and painful process of a courtroom trial.

The Romney/Healey Administration’s medical malpractice reform plan also:

Introduces collateral sources to a jury prior to any award;

Reduces lawyers fees from 25 percent for verdicts over $500,000 to 15 percent for verdicts over $600,000, and;

Reduces pre-judgment interest to the one-year Treasury rate.

In separate legislation, the Administration will propose $1 million in additional funding for the Commonwealth’s Betsy Lehman Center for Patient Safety and Medical Error Reduction. These funds will be used to develop best practices for certain high-risk medical procedures with the goal of reducing medical errors.

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