What Lawyers Do

Surprise, surprise … the WSJ editorial board is in favor of imposing caps on non-economic damages in medical malpractice cases. For good measure, here are a couple of other equally surprising facts: Bill O’Reilly thinks there is a “war on Christmas,” and Britney Spears is, well, a little nutty.

In a December 1, 2008 editorial, the WSJ defended the $500k non-economic damage caps against doctors and $1 million against hospitals that is presently in effect in Illinois, but could be overturned in a case recently brought by trial lawyers to that state’s Supreme Court. For the uninitiated to the battle waged by insurance companies in the 50 states for so-called medical malpractice reform, non-economic damages are the equivalent of “pain and suffering” awards.

The editorial was not exactly an objective rendering of the climate surrounding medical malpractice litigation. First, the headline states, “Tort lawyers in Illinois try an end run around the voters.” But the voters didn’t institute damage caps by referendum! Rather, the caps were put into effect by the state legislature in 2005. 

Another claim is that after the new law was put into effect, “Insurance premiums fell by up to 30% for some physicians.” Okay, but left unsaid was that the law forced insurers to disclose risk data and increased transparency so that, consequently, rates ended up decreasing.

The WSJ also proclaimed that: “We’d prefer a ‘loser pays’ rule as in the British system.” Would they feel the same way about such a rule being applied in commercial litigation cases? And say how about not only that the loser would pay, but how about also that damages caps be applied to lawsuits against corporations? Say if Exxon sued Shell for a breach of contract? I’ll bet the farm that’d get them all worked up.

After suggesting the importation of a British fee structure, the Journal could not help but link the word “frivolous” to medical malpractice lawsuits:

We’d prefer a “loser pays” rule as in the British system. But without such a deterrent to frivolous suits, limiting damage awards is the only way to stop jackpot judgments that drive doctors away and hurt the quality of medical care. These caps balance the occasional need for legal redress with the larger public need for affordable health care.

Large jury verdicts adversely impact the need for affordable health care? Read about a study conducted by Dartmouth health economist that measured medical malpractice costs as comprising less than 1% of all health care costs. 

Further, so-called frivolous lawsuits are by far the exception and not the norm. Many states require a doctor to review the medical records and say there is malpractice prior to the filing of suit. Moreover, studies have shown that juries are more lenient towards doctors than other defendants and doctors win approximately 80-90% of all cases that are tried. Given that medical malpractice cases are very expensive to bring, since they are expert-intensive, most attorneys are hesitant to bring even those that are meritorious because of the amount of money they have to fork over in order to bring the case to trial. In other words, they want cases where it is clear cut that the doctor screwed up. 

Frivolous lawsuits simply do not result in jackpot judgments, as the Journal claims, but instead get dismissed before or during trial. Read an article by Ezra Klein that was published in Slate that debunks the medical malpractice myths that conservatives have injected into our country’s political consciousness.

But the editorial is right in one respect – indeed, limits on medical malpractice awards have been adopted in all but 15 states. Since non-economic damages are generally affected, the only cases that are often worth pursuing in affected states are those where there is a claim for sizeable economic damages (translation, lost income).

Thus, groups that are adversely affected are children, the elderly, and homemakers. The pain and suffering caps make it so that their cases are not economically feasible to bring. Non-economic damage caps have the effect of discriminating against these groups, and that is something that the editorial does not bother to mention.  

Nor is any concern shown about medical errors which are reported to result in the death of 100,000 patients annually. Rather, reading between the lines, the concern is for the welfare of insurance companies. After all, there is no mention in the editorial about insurance companies imposing exorbitant rate increases on doctors, even when there has not been a corresponding rise in medical malpractice payouts, something which has been all-too-common in the past decade or so because of bad investments and a desire for profit.

Surprise, surprise …