Rais­ing the cap

Calif. mea­sure re­vives med-mal de­bate

Modern Healthcare - - THE WEEK IN HEALTHCARE - Andis Robeznieks

Anew po­lit­i­cal bat­tle over Cal­i­for­nia’s land­mark $250,000 cap on pain and suf­fer­ing dam­ages in med­i­cal mal­prac­tice law­suits is revving up, and the is­sue may go to the state’s vot­ers next year. The fight will once again raise long-stand­ing ques­tions of how best to pro­tect pa­tients against med­i­cal neg­li­gence and fairly re­solve mal­prac­tice cases with­out im­pos­ing high costs on providers and the health­care sys­tem in gen­eral.

If sup­port­ers gather the more than 504,000 re­quired sig­na­tures, the Troy and Alana Pack Pa­tient Safety Act of 2014 will go on the bal­lot in Novem­ber 2014. If ap­proved by vot­ers, the $250,000 cap on noneco­nomic dam­ages—passed 38 years ago—would be ad­justed for in­fla­tion, in­creas­ing the limit to about $1.1 mil­lion.

Also, physi­cians would be sub­ject to ran­dom drug and al­co­hol test­ing, they would have to guard against pa­tients who doc­tor shop for nar­cotic pre­scrip­tions by check­ing a data­base be­fore writ­ing such pre­scrip­tions, and they would face manda­tory drug test­ing af­ter an un­ex­pected pa­tient death or se­ri­ous in­jury.

The pro­posed Cal­i­for­nia bal­lot ini­tia­tive mea­sure is named af­ter the young son and daugh­ter of Bob and Car­men Pack, who were killed by a driver im­paired by pre­scrip­tion drugs. Though the driver went to prison, Bob Pack ar­gued that the physi­cians who wrote her mul­ti­ple pre­scrip­tions were not held ac­count­able.

The bal­lot mea­sure pa­per­work was filed July 25. The state has 45 days to process the re­quest, then sup­port­ers will have five months to gather sig­na­tures.

In an in­ter­view, Bob Pack said a voter referendum is the only way to change the cur­rent sys­tem to pro­mote pa­tient safety and pro­tect vic­tims’ rights be­cause the physi­cians’ lobby has so much sway over law­mak­ers.

Show­ing eco­nomic losses

Sup­port­ers of Cal­i­for­nia’s Med­i­cal In­jury Com­pen­sa­tion Act of 1975, led by physi­cians and li­a­bil­ity in­sur­ers, ar­gue that while the state lim­its noneco­nomic dam­ages, in­jured pa­tients still can be awarded un­lim­ited eco­nomic dam­ages such as care costs and lost wages. But cap op­po­nents, led by plain­tiff lawyers and pa­tient ad­vo­cacy groups, note that it’s dif­fi­cult for chil­dren, se­nior cit­i­zens or home­mak­ers to show eco­nomic losses, and that at­tor­neys of­ten refuse to take their cases be­cause with­out the po­ten­tial for re­cov­er­ing pain and suf­fer­ing dam­ages, the costs ex­ceed the pay­off.

The health­care re­form law cre­ated a pro­gram to let states test al­ter­na­tive ways of re­solv­ing med­i­cal mal­prac­tice cases, such as judgedi­rected ne­go­ti­a­tions, and full-dis­clo­sure/quick-set­tle­ment-of­fer pro­grams. But none of th­ese have gained broad trac­tion in Cal­i­for­nia or other states, where the de­bate con­tin­ues to fo­cus on caps and other lim­its on law­suits.

Since Cal­i­for­nia led the way, 25 other states have passed noneco­nomic dam­age caps. This in­cludes Kansas, which fol­lowed Cal­i­for­nia’s lead and capped pain and suf­fer­ing dam­ages at $250,000.

Texas caps dam­ages at $250,000 per physi­cian and $250,000 per in­sti­tu­tion with a $500,000 limit on all in­sti­tu­tions com­bined. Sev­eral states have es­tab­lished a to­tal cap for all types of dam­ages. While Cali- for­nia’s cap has re­mained un­changed for 38 years, Mary­land’s cap is ad­justed for in­fla­tion.

“If $250,000 was fair in 1975, the equiv­a­lent amount ad­justed for in­fla­tion should be fair to­day,” said J.G. Pre­ston, press sec­re­tary for the Con­sumer At­tor­neys of Cal­i­for­nia trial lawyer as­so­ci­a­tion.

But op­po­nents of the bal­lot mea­sure ar­gue that even if the dam­age cap were in­creased only to $500,000, it would pro­duce a $9.5 bil­lion in­crease in health­care costs in Cal­i­for­nia.

“It’s a law that has worked very well for a long time,” said Dr. Paul Phin­ney, pres­i­dent of the Cal­i­for­nia Med­i­cal As­so­ci­a­tion. “It bal­ances the need to com­pen­sate in­jured pa­tients with the need to make the sys­tem work.”

Caps do not trans­late into sav­ings

Re­searchers, how­ever, have found no ev­i­dence that states with caps have lower to­tal health­care costs. A 2008 study by re­searchers at the Univer­sity of Alabama at Birm­ing­ham and pub­lished in the jour­nal Health Ser­vices Re­search con­cluded that caps on noneco­nomic dam­ages and other lim­its on med­i­cal mal­prac­tice suits “have not trans­lated into in­sur­ance sav­ings” for con­sumers.

The cur­rent med­i­cal li­a­bil­ity sys­tem in 2008 cost the U.S. about $55.6 bil­lion a year, or 2.4% of to­tal health­care spend­ing, ac­cord­ing to a study pub­lished in Health Af­fairs in 2010. That in­cluded $45.6 bil­lion in “de­fen­sive medicine” costs.

Michelle Mello, Har­vard Univer­sity pro­fes­sor of law and pub­lic health who co-au­thored that re­port, said there is strong ev­i­dence that caps have a “mod­est but sta­tis­ti­cally sig­nif­i­cant” im­pact on li­a­bil­ity pre­mi­ums, re­duc­ing them by 6% to 13% over time. A Medi­care Pay­ment Ad­vi­sory Com­mis­sion re­view she led found there also is ev­i­dence that caps lower de­fen­sive medicine-re­lated uti­liza­tion rates and mod­estly in­crease the sup­ply of physi­cians in a state. On the other hand, a Health Af­fairs study she co-au­thored this month found that physi­cians in states with caps or­der cer­tain ser­vices as­so­ci­ated with de­fen­sive medicine at higher rates than those in states with­out caps. “Physi­cians al­ways feel un­der the gun, even with that pro­tec­tion,” she said.

Phin­ney said there has been an on­go­ing ef­fort in Cal­i­for­nia by the med­i­cal pro­fes­sion to com­pre­hen­sively ad­dress pa­tient safety with­out re­sort­ing to the le­gal sys­tem. “When er­rors do oc­cur, they should be dis­closed, and mis­takes need to be ac­knowl­edged openly and quickly,” he said. “But from the trial lawyers’ per­spec­tive, it’s been a non­stop de­bate about caps since 1975.”

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