Nevada, Oregon and Wyoming take Med-mal Crisis to the Polls

On Nov. 2, citizens of three Western states will decide whether or not to limit damage awards in medical malpractice insurance cases. Nevada, Oregon and Wyoming will join Florida as the four states to consider placing caps on noneconomic awards in the upcoming election, according to the Associated Press. The four-state struggle is unprecedented.

According to the American Medical Association (AMA), caps on med-mal damages have been implemented in 27 states (including California, Colorado, Idaho and Utah) and 20 states face a med-mal crisis. Doctors in those states are retiring early, relocating to other states or limiting their services to their patients due to soaring medical liability insurance rates, according to AMA’s Web site.

AMA has lobbied for federal legislation that would enact a $250,000 cap on noneconomic damage awards, something that President Bush supports. Awards for emotional distress and pain and suffering would be limited, while economic awards such as medical costs and lost wages would not be affected by the legislation. The bill has passed the House but has stalled in the Senate, where trial lawyer allies have reportedly blocked it.

Doctors and insurance companies have lobbied hard to get the individual state measures on the ballot, while lawyers are campaigning for a “no” vote on the propositions. Physicians and insurance companies argue that access to essential medical care, especially in obstetrics and neurosurgery, will be limited in Nevada, Oregon and Wyoming if something is not done to drive down skyrocketing insurance rates. They believe that limits on damage awards in medical malpractice cases will help.

“Jury awards have gotten out of control and the trial bar’s abusive practices are hurting consumers and doctors who cannot serve their patients,” said Nicole Mahrt, director of public affairs for the American Insurance Association’s (AIA) Western Region. “It’s making it impossible for them to operate. I think the fact that four states are voting on this at the same time is significant because it shows that there is a crisis, that there is a real problem.”

Rita Nowak, assistant vice president, commercial lines, Property Casualty Insurers Association of America (PCI), agreed that the four ballot initiatives are significant.

“Medical malpractice insurance is so costly for the doctors, and it’s creating an access to care problem for the public, for women especially,” she said. “What we know is that in order to keep premiums at a reasonable level, we must change the loss trends, which are increasing significantly as a result of significant awards being given for noneconomic damages. In states where there are no caps on noneconomic damages, we’re seeing significant premium costs.”

Dr. Richard E. Anderson, chairman and CEO of medical liability insurance provider The Doctors Company, said that the high premiums are detrimental to doctors and patients alike. “Physicians nationwide live daily with the specter of malpractice lawsuits that threaten their livelihoods and their commitment to serve their patients,” he said. “The medical liability crisis threatens the availability of and access to health care services provided by community clinics, public and private hospitals, emergency rooms, women’s health care organizations and physicians. We are moving dangerously close to the time when patients will have to choose between medical care and legal counsel.”

In Nevada, the fight has become particularly heated. Lawyers again unsuccessfully attempted to remove the Keep Our Doctors in Nevada initiative, also known as Question 3, from the ballot. Nevada’s highest court sided with the Nevada Trial Lawyers Association in the suit and determined that Question 3’s language was inaccurate. The Supreme Court ruled that Secretary of State Dean Heller rewrite it because it did not fairly and accurately describe the initiative’s ramifications. Heller rewrote the language and new ballots were reportedly printed to reflect the changes.

Question 3, if approved by voters, would limit noneconomic damage awards in med-mal cases to $350,000 with no exceptions and limit fees for attorneys. Laws passed in 2002 also limited noneconomic damage awards to $350,000, but specified certain exceptions such as exceptional circumstances and gross negligence.

The lawyers also have their own initiatives appearing on the ballot in Nevada, according to the Las Vegas Review-Journal. Question 4 makes Question 3 null and void if it receives voter approval this year and in 2006. Question 4 also calls for rate regulation – cutting insurance rates by 20 percent – and removing any cap on damage awards.

Question 5, also supported by trial lawyers, would stop frivolous lawsuits and limits being placed on how much money lawyers can make for representing clients.

Oregon’s Measure 35 would place a cap of $500,000 on noneconomic damage awards in medical malpractice cases. Oregon previously had a cap from 1987 to 1999, but the Supreme Court ruled the cap as unconstitutional, according to the Mail Tribune. Physicians said that their insurance premiums, especially for obstetricians and neurosurgeons, went up as soon as the cap on noneconomic damage awards was removed.

Wyoming voters will decide whether or not to pass a proposed constitutional amendment intended to limit noneconomic damage awards in medical malpractice lawsuits. The amount of the cap has not yet been determined.

Mahrt said that if the measures in Nevada, Oregon and Wyoming pass, rates would eventually come down, but may take some time.

Nowak agreed that there would be an eventual decrease in rates if the ballot initiatives pass. “I think ultimately caps in a state will allow a more competitive environment and ultimately will bring in more insurers to write this coverage,” she said.

Anderson said that the reforms will increase rate stability. “Predictability in those states that pass reforms will benefit patients through increased access to care, physicians through lower insurance premiums, and the health care delivery system overall,” he said.

Nowak added that even if the ballot initiatives do not pass, there will continue to be legislative activity on the state level. About 300 medical malpractice bills were introduced across the states in the last year, but Anderson anticipated further national legislation on the issue.

“While we applaud the efforts for state-level reform, with 20 states currently in crisis, it is obvious that the medical liability crisis is a national problem and should therefore be addressed at a national level to ensure the most comprehensive and uniform solution benefiting all Americans,” Anderson said.
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Topics Legislation Oregon Nevada