Vermonters Duel Over Tort Reform

By | December 19, 2005

The Vermont Medical Society and a group of consumer advocates squared off last week with dueling news conferences that were a harbinger of a coming debate in the Legislature over medical malpractice reform.

“The cost of a broken medical liability system is borne by all Vermonters, not just physicians,” said Dr. Peter Dale, a Berlin internist and president of the Vermont Medical Society.

He said sharply rising malpractice insurance premiums, coupled with “defensive medicine,” in which doctors order extra tests for fear that deciding not to could be used against them in court, are driving up the state’s health care bill.

Consumer advocates immediately attacked one solution backed by doctors: a $250,000 cap on damages for pain and suffering in malpractice suits.

“Too many Vermonters’ lives are permanently harmed by medical malpractice,” said Martha Woodman, a lecturer in the University of Vermont business school. Woodman had lung surgery in 2000 and when she awoke from anesthesia had been rendered totally blind. She sued for malpractice and reached an out-of-court settlement. The amount of the settlement was kept confidential as part of the agreement.

“It is wrong to blame patients injured by malpractice for insurance woes; it is like pouring salt on our wounds,” Woodman said.

The state this year approved a 19.7 percent increase in malpractice rates from the largest carrier serving the state, and 7.2 percent for the second largest. Rates for some specialties are up by much larger margins.

The Medical Society is backing a range of reforms, including a “safe apology” system under which doctors and hospitals can acknowledge errors without having that acknowledgment used against them in court; and the cap on damages for pain and suffering.

Lawmakers in 2004 called for a special panel representing doctors, hospitals, lawyers, patients, the insurance industry and state regulators to draft recommendations after the Medical Society raised an alarm about rising malpractice costs.

The panel was closely divided on many issues. Of 30 questions put to a vote, 13 were decided 4-3.

The Medical Society endorsed the majority report, but the two lawyers’ representatives and the state health care ombudsman, who represents consumers, issued a “supplemental and concurring report” sharply criticizing the majority’s document.

“We are writing separately from the main report in order to express our concerns that several of the ‘non-consensus’ votes of the committee do not reflect conclusions drawn from the empirical evidence presented to the committee, but rather are the product of selected anecdotes in support of a particular agenda,” the minority report said.

Committee members included:

Deputy Commissioner J. Peter Yankowski of the state Department of Banking, Insurance, Securities and Health Care Administration.

Paul Harrington, executive vice president of the Medical Society.

M. Beatrice Grause, president and CEO of the Vermont Association of Hospitals and Health Care Systems.

Laura Kersey, assistant vice president of the American Insurance Association.

Thomas Sherrer of the Vermont Trial Lawyers’ Association.

John Evers of the Vermont Bar Association.

Donna Sutton Fay, the state health care ombudsman.

There were several areas of consensus, which the main committee report defined as policy statements it endorsed by more than a one-vote margin. Among them were:

The Legislature should require public involvement when state regulators review insurance company rate increase requests.

The Legislature should take steps to improve self-insurance opportunities. Both Fletcher Allen Health Care and the Dartmouth-Hitchcock Medical Center cover their affiliated physicians through self-insurance, which, committee members were told, is cheaper than malpractice insurance on the open market.

The Legislature should not set up a system of fixed payments for different types of malpractice.

In some instances, the main report appeared to agree with the criticisms voiced in the minority report by Evers, Fay and Sherrer.

The minority argued that payouts in malpractice cases need not be capped, because there is no evidence that the frequency or size of such settlements are up significantly.

The main report concurred. “If Vermont’s medical malpractice claims’ severity and frequency do not demonstrate any discernible upward trends, one then needs to ask what has driven the rate increases,” it said.

It said the rate increases were caused mainly by underpricing of malpractice insurance in the 1990s, as well as declines in investment income for the insurance companies.

The two sides’ arguments were bolstered by dueling statistics. The lawyer-consumer coalition argued that malpractice costs represent less than 1 percent of Vermont’s overall health care bill.

The Medical Society replied that the overall health care bill includes everything from prescription drugs to dental care. “A more meaningful measure of the impact of malpractice on physician practices is the premium as a percentage of their income,” it said. For obstetrician-gynecologists, malpractice insurance equaled from 19.3 percent to 30.4 percent of doctors’ wages, it said.

Topics Medical Professional Liability

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