Pro I-330

By Mary Spillane

Physicians, health care professionals, and other supporters from across Washington gathered in Olympia on December 28 to celebrate a victory in their battle to increase access to affordable health care and bring greater fairness to the state’s health care liability system. They delivered more than 315,000 signatures in support of their initiative to the legislature, Initiative 330, the Health Care Access Initiative, easily surpassing the number of signatures required to qualify the measure.

Why I-330 was Launched

For several years, physicians and other health care providers have been warning that excessive costs and an unfair tort liability system have been threatening their ability to practice, placing health care access at risk, and driving up health care costs. According to the Washington State Medical Association, a 2004 survey of Washington physicians confirmed that:

• 40% of respondents said there were fewer physicians in their community than four years ago.
• 81% said their community was having difficulty recruiting physicians, including neurosurgeons, obstetricians, orthopedic surgeons, and family practice doctors.
• 51% said they were less willing to perform procedures with potentially greater liability.
• 44% said they have stopped certain high-risk procedures.
• 51% said some patients had to leave their practice to get high-risk services.
• 75% said their practice of defensive medicine had increased.
• 76% said they consciously factor the possibility of being sued into all or some of their practice decisions.

I-330 proponents believe that the current liability system is arbitrary and does not prevent negligence, as there is no correlation between good and “bad” physicians and claims, payments appear to be based more on the severity of outcome than the existence of any negligence, and the “blame and sue” environment interjects a major roadblock to improving patient safety and reducing medical errors.

I-330 proponents see a need for a liability system that is reliable, consistent, and fair, and that provides adequate and reasonable compensation to patients injured by medical negligence, promotes patient safety and error reduction, and preserves access to care by reducing excessive costs that drive insurance premiums upward.

Frustrated by the lack of legislative action on meaningful health care liability reform, physicians launched I-330 to try to break the gridlock and bring about sensible reform. With I-330, which is modeled in part after tort reform measures that have worked in other states, but also contains provisions unique to Washington State, its proponents seek to restore fairness and balance to the liability system so that physicians and other health care providers can continue to practice medicine, serve their patients and communities, and preserve access to affordable health care services.

The Key Components of I-330

The following are the key components of I-330, many of which have already proven successful in other states in bringing about meaningful reform:

1. I-330 Increases Patient Recovery by Limiting Attorney Contingency Fees
I-330 would return a greater portion of any recovery to the injured patient by limiting attorney contingency fees as follows:

• 40% of the first $50,000 recovered.
• 33-1/2% of the next $50,000 recovered.
• 25% of the next $500,000 recovered.
• 15% of any amount over $600,000 recovered.

Today, an attorney would typically receive up to a 50% contingency fee, or as much as $500,000 on a $1,000,000 recovery. Under I-330, the attorney would still receive a $220,000 contingency fee on a $1,000,000 recovery, an amount that I-330 proponents believe fairly compensates the attorney for the contingent risk, while providing the patient with a greater portion of the damages recovery.

Although the plaintiffs’ bar complains that contingency fee limitations will negatively affect the ability of patients to bring claims, that has not been the case in California, a state where such fee limitations are already in place.

2. I-330 Provides Full Compen-sation for Actual (Economic) Damages

I-330 in no way limits recovery of economic damages. It guarantees full and fair compensation for all past and future economic damages.

3. I-330 Limits Recovery of Noneconomic Damages

In cases based on the alleged wrongful conduct of one or more health care professionals, I-330 permits the claimant to recover up to $350,000 noneconomic damages. In cases involving claims of corporate negligence against health care institutions, I-330 also permits the claimant to recover a maximum of $350,000 to $700,000 noneconomic damages (depending on the number of health care institutions involved).

Claimants cannot obtain more than one recovery of noneconomic damages by splitting causes of action or bringing separate causes of action against multiple defendants for the same patient injury, and the noneconomic damages of all persons claiming them as a result of the patient’s injury are included within the noneconomic damages limitations.

4. I-330 Allows for Periodic Payment of Future Damages

Under I-330, in cases where future damages exceed $50,000, either party may obtain a judgment requiring periodic payment of those future damages. When the judgment creditor dies, the judgment is subject to modification to eliminate future periodic payments of damages awarded for future medical treatment, care or custody, loss of bodily function, or future pain and suffering, future damages the deceased judgment creditor will not sustain. Damages awarded for loss of future earnings may not be reduced or terminated after the judgment creditor dies, but the judgment may be modified to award and apportion any of those unpaid future damages to whomever the judgment creditor owed a duty of support.

5. I-330 Prevents Double Payments

I-330 allows any party to present evidence of past and future compensation received for the injury from collateral sources. Except as provided by any superseding federal law, it also prevents collateral sources from obtaining subrogation or reimbursement of such compensation from the claimant’s recovery.

6. I-330 Amends Joint and Several Liability and Apportionment of Fault Laws

Under I-330, health care professionals remain personally liable for their own negligence, but are not vicariously liable for fault of others who were not acting under their direct supervision and control.

Hospitals remain liable for the negligence of their actual agents and employees, but are not liable for fault of others under “apparent” or “ostensible” agency theories. Except where there was concert of action or a person was acting as an actual agent or under a party’s direct supervision and control, the liability of health care providers is several only, even in cases where plaintiff is not at fault.

7. I-330 Fosters the Use of Arbitration and Mediation

I-330 promotes more prompt resolution of cases by strengthening the mediation process, and allowing health care providers and their patients to enter voluntary binding arbitration agreements.

8. I-330 Requires Notice of a Claim

Under I-330, a patient must give 90 days’ notice before filing a claim.

9. I-330 Eliminates Recovery of Fees in Vulnerable Adult Litigation

Under I-330, plaintiffs in vulnerable adult litigation, like all other patients alleging injuries from health care, will receive payment for actual damages, but not attorney and expert witness fees.

10. I-330 Shortens the Time for Filing Suit

Under I-330, with limited exceptions for fraud, intentional concealment, or foreign body cases and minors under age six, plaintiffs must file health care liability suits within the earlier of three years from the date of the act or omission alleged to have caused the injury or one year of the date the patient or his or her representative or custodial parent or guardian actually or constructively discovered that the act or omission caused the injury. Suits for injuries to children under the age of six must be filed within the later of three years of the act or omission alleged to have caused the injury or before the child’s eighth birthday.

Why WSTLA’s Proposal, I-336, Is Not the Answer

WSTLA has presented signatures for its own initiative, I-336, many provisions of which I-330 proponents believe will only exacerbate the problems plaguing the current liability system and further hinder access to care and increase costs.

Although some I-336 provisions may seem superficially attractive, they carry heavy hidden (and not so hidden) costs, without actual benefit to the patient or the public. For example, I-336’s provisions for a state-run secondary insurer would require physicians to pay two premiums instead of one, and likely would not lower the cost of premiums without massive taxpayer subsidies.

Many provisions in I-336 divert discussion of liability reform to peripheral or non-germane issues, like certificates of merit requirements when attorneys are already obliged not to file frivolous suits, or cumbersome and costly public hearing requirements for insurance rate increases over 15% when the Insurance Commissioner already has the authority to approve rates, or adding two more (there are currently four) citizen members to the Medical Quality Assurance Commission when that will not help a disciplinary process that needs expertise. Even I-336’s provision for reporting judgments or settlements over $100,000 is unnecessary as current federal law requires reporting of all indemnity amounts paid.

Other provisions of I-336, such as those for reporting of claims (even when no indemnity is paid), for investigation of providers with three or more paid claims over $50,000 in five years, for revocation of licensure for three or more judgments in ten years, or for disclosure of very broadly defined “adverse events,” seem designed more to preserve revenue streams for the plaintiffs’ bar, to induce more lucrative settlements, and to disadvantage physicians and other health care providers in defending against claims.

The “three strikes you’re out” provision, in particular, will force settlement without regard to the merits of a case, as a physician cannot risk a trial and the possibility of an adverse judgment. It will also negatively impact the ability to recruit physicians in high-risk specialties such as obstetrics. Even I-336’s provision concerning expert witness limitations will disadvantage defendants in cases with multiple defendants and ignores that trial courts already limit experts on a case-by-case basis.

For these and many other reasons, the proponents of I-330 feel strongly that I-336 is not the way to go.

What Happens Next?

The legislature will have to consider both I-330 and I-336 in this legislative session. It can reject, enact, or propose alternatives to either or both initiatives. If the legislature rejects or proposes an alternative to either initiative, then that initiative will go before the voters at the next general election. The stage is thus set for airing the issues, breaking the gridlock, and allowing Washington’s voters to have their say on sensible and meaningful health care liability reform.