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Health care threatened by malpractice awards by Dick Peterson Public Relations If quality health care for South Carolinians is the state’s golden egg, the goose that presents it faithfully day after day is in critical condition, a victim of the devastating malpractice awards and accelerating insurance premiums that are killing it. A bill pending in the South Carolina Legislature may be the cure. But is the Medical Malpractice and Patient Safety Reform Act a pill the state’s citizens, its health care establishment, personal injury attorneys and politicians will swallow? Vice president for medical affairs and dean of MUSC’s College of Medicine Jerry Reves, M.D., certainly hopes so. “The College of Medicine is acutely aware of the malpractice crisis, and we are greatly concerned with its impact on quality medical care around the state,” Reves said. Characteristic of the crisis throughout the state, MUSC has suffered a 125 percent increase in malpractice payouts in the past three years, Reves said. As a result, malpractice insurance premiums have skyrocketed some 75 to 100 percent in two years and show no sign of abating. In addition to the huge rise in payouts, insurance companies, who profit most by investing the money they collect in premiums, have been hit hard by the recent downturn in the economy. Adding to the crisis are the Sept. 11, 2001 attack on New York City and numerous other disasters worldwide. Major insurers are international in scope, and large payouts affect premiums internationally.  Like one domino toppling another, some insurance companies, in turn, refuse to provide malpractice insurance, or if they do, physicians can’t afford the high premiums. To place South Carolina physicians in still greater financial jeopardy, large managed care contracts have driven down reimbursement rates. Federal Medicaid and Medicare reimbursement has been cut to as much as 40 percent for some specialties for the past five years, and state reimbursement, 30 percent, said Bruce Elliott, M.D., president of University Medical Associates, MUSC physician’s practice plan. Most physicians barely recover the cost of practicing medicine and some face bankruptcy. “We see a growing disaster on the horizon,” Elliott said. “People can no longer afford to buy health insurance. It’s a vicious cycle. The cost of insurance is rising exponentially, in large part driven by the exploding cost of litigation. This forces people or their employers to forego health insurance, which only adds to the costs for those with insurance. It’s a spiral that has to stop. I know physicians in this state who can no longer afford to take Medicare patients, because their costs exceed their reimbursement.”  Consequently, specialists in internal medicine and family medicine, especially, are re-evaluating whether they can afford to take any new Medicare or Medicaid patients. “Other specialties, including obstetrics, neurosurgery, vascular surgery, orthopedics and trauma surgery have already left many states and are now re-evaluating, and in some cases leaving, their practices in South Carolina,” Elliott said. “We consider the health of all South Carolina citizens our responsibility,” Reves said, “and we’re gravely concerned. We have to understand how important this legislation is to all our citizens.” HB 4464, which has already passed the S.C. House, and its companion bill in the S.C. Senate, SB 948, would place a $300,000 cap on punitive damages awarded in medical malpractice lawsuits. “These are what we call non-economic damages,” said Lisa Kindy, J.D., director of MUSC’s Office of Clinical Risk Management. “The cap does not apply to damages awarded to cover expenses that are the result of medical errors.” She cited lost wages, even a lifetime of therapy, if needed, as examples that would still be covered. “Medicine is not perfect. Some things that happen are inexcusable, but medicine has come so far. We have procedures that are less invasive and drugs that make us think everything is curable. But we still haven’t left the real world, and in the real world there are complications,” she said. “And the real world cries.” Kindy said that somehow there has to be a way to stabilize medical malpractice claims and stabilize the environment so premiums won’t go up in this litigious society. “Our quality of care depends on it,” she said. Whichever side people take on the issue of malpractice reform, she said, they all have a stake in keeping the state’s health care system healthy and the quality of health care up for themselves and their families. In defense of the health care delivered by MUSC, Kindy represents the institution and its physicians in malpractice suits and works to head off issues before they arise by teaching physicians and nurses how to communicate with patients and patient families about risks and possible complications.  A list of points covered by the Medical Malpractice and Patient Safety Reform Act, House Bill 4464 and Senate Bill 948: Mandatory Claims Adjusting—After a claim for damages is filed against a health care provider, the provider’s insurance carrier shall commence a full evaluation of the potential liability. The carrier has 180 days to make final disposition of the claim by adjusting, compromise or claim rejection. Medical Claims Review—Establishes a Medical Claims Review Office (MCRO) in the Department of Insurance, which shall convene a panel to review all claims against health care providers for damages allegedly resulting from medical malpractice. Mediation—(1) Mandatory mediation before a medical malpractice action is brought to trial. (2) If both parties agree, binding arbitration will be provided. Expert Witness—If a judge finds an expert health care provider in a medical malpractice action engaged in any unjustifiable conduct when testifying as an expert, the judge shall report to the state entity that licenses the expert’s profession. The state entity is authorized to investigate the reported conduct, hold hearings, and impose sanctions. Damages for Pain and Suffering—Cap set at $300,000 for pain and suffering, not economic damages. The cap excludes (1) permanent disability; (2) disfigurement or scarring; (3) paralysis; and (4) loss of limb or any organ. (S-948 has $300,000 cap without exclusions.) Comparative Faulty (Joint and Several Liability)—Each defendant is liable to the claimant only for the defendant’s proportionate share of the recoverable damages. BOME Investigations—The Board of Medical Examiners is authorized to set licensure fees sufficient to generate revenue to enhance capabilities by increasing investigative staff and conducting inquiries, which result from opinions provided by the Medical Claims Review Office. Deductibles—An insurer issuing a medical malpractice insurance policy shall offer as part of the policy or as an optional endorsement to the policy, deductibles and policy limits optional to the policy holder. JUA/PCF—A person serving on the JUA or PCF boards is prohibited from being employed in any manner and this prohibition continues for one year after the person ceases to be a member of the board. Frivolous Lawsuits—Every lawsuit filed must be signed by an attorney constituting that the attorney read the document and believes there is good grounds to support it and that it is not frivolous. Transfer to PCF—The Patient’s Compensation Fund will be managed by its board and will no longer be under the State Treasurer’s Office.   Catalyst Online is published weekly, updated as needed and improved from time to time by the MUSC Office of Public Relations for the faculty, employees and students of the Medical University of South Carolina. Catalyst Online editor, Kim Draughn, can be reached at 792-4107 or by email, catalyst@musc.edu. Editorial copy can be submitted to Catalyst Online and to The Catalyst in print by fax, 792-6723, or by email to petersnd@musc.edu or catalyst@musc.edu. To place an ad in The Catalyst hardcopy, call Community Press at 849-1778.