Pro I-336

By Karen K. Koehler

Imagine thousands of white-frocked doctors. Standing side by side they hold pickets which read: “we can’t practice due to frivolous lawsuits,” “trial lawyers are making us close our doors,” “the only way to lower our premiums is to cap damages.” Lurking behind the doctors are insurance companies trying to escape detection. They have a good hiding place. The line of doctors forms a fantastic human shield.

I-330 is an extreme measure developed by insurance companies to attack the heart of our state’s civil justice system. Generally it is limited to medical malpractice cases (but there are exceptions such as the attempted re-enactment of the Sophie cap in all cases). The measure strips away the right to a jury trial, slashes the statute of limitations, caps non-economic damages and much more. (See synopsis box at end of article).

While proponents trumpet the “malpractice insurance crisis” as justification for the radical evisceration of tort law as we know it; the truth is that the sky is not falling and Chicken Little needs to have its mouth washed out with soap. In fact:

• Malpractice filings declined nationally by four percent between 1995 and 2000;
• Medical errors are the fourth leading cause of death in the United States yet they comprise only five percent of personal injury filings;
• Less than four percent of tort actions are decided by juries (and we all know who demands the jury- and it isn’t the plaintiffs);
• Less than five percent of doctors are responsible for almost 50 percent of malpractice payouts;
• According to a 2004 study by the Congressional Budget Office, malpractice costs account for less than two percent of total health care spending.
• There is no correlation between capping damages and decreasing insurance premiums, according to surveys examining insurance rates from 1985 - 1998 and the severity of tort restrictions in the various states.

Yes, that’s right. No correlation. Instead the converse occurs. As doctors’ premiums “skyrocket,” so apparently do the profits of the insurers. According to public records, Physicians Insurance (the insurer arm of WSMA), has survived the latest insurance “hard” cycle (caused by declining interest rates and the September 11 attacks) with flying colors.

In 2003, Physicians Insurance was able to report $13 Million in profit and rebuilding of its reserves by another $10.8 Million. Final figures for 2004 exceed even the stellar performance of 2003. For 2005, Physicians Insurance is rolling back rates by an average of 7.7%, which, for the most part, equates with real dollar rates dropping below 1985 levels.

These record profits continue to roll in as the Administrative Office of the Courts confirms that lawsuit filings in medical malpractice cases are down, frequency of claims are down, and total payouts are holding steady. Recent studies and information by the Congressional Budget Office, Medical Liability Monitor (a medical malpractice industry publication) and the Rand Institute (a conservative insurance-funded think tank) likewise concede that no correlation can be shown that caps on damages result in lower premiums.

The proponents of I-330 have known all along that it will not impact premium gauging of doctors by insurers. Despite all the grandstanding, I-330 doesn’t include one word on the issue of lowering premiums.

I-330 is not really expected to “cure” any insurance crisis. It is meant to strike while the battle cry against a supposed “litigation explosion” resounds from the White House. It is designed to play upon public misperceptions so that the insurance industry can reap even greater profits.

The medical associations have been duped. Across the country they watch as citizens buy into this propaganda, give up their rights and enact damages caps. They cannot help but see that mere months after cap laws go into effect, rates continue to rise. Yet like puppets, their members allow others to pull their strings and mouth their given line: “caps are the answer.”

There’s no way to reason with people when they speak but refuse to see, hear or listen. The medical association and insurers have rebuffed the many attempts to hold conciliatory meetings or to achieve a workable compromise over the past several years. Angry with the legislature for not doing its bidding, the group has decided to bypass Olympia.

Because I-330 cannot pass rational scrutiny, they have increased the volume of disgruntled rhetoric, launched aggressive mean-spirited personalized attacks against the legal profession, and are hoping that the public will vote for I-330, if for no other reason than to lash out at lawyers.

Unfortunately, the people hurt most by this fanaticism, are those injured by preventable medical errors. As guardians of the law, we should bristle with indignation on their behalf. We should do everything possible to prevent these calculated attacks on a tort system that is rooted in the moral consciousness of our society.

I-336 is a balanced solution supported by many consumer groups and WSTLA including: Washington State Labor Council, Northwest Federation of Community Organizations, Center for Justice and Democracy, Washington Citizen Action, Puget Sound Alliance for Retired Americans, NOW of Washington, United Farm Workers, AFL-CIO, Teamsters Joint Council No. 28, New Care Concepts Nursing Agency, Washington ACORN, Washington State Council of Firefighters, Mothers Against Drunk Driving, and many others.

The difference between the initiatives is striking. I-330 punishes patients - I-336 operates on the principle that you don’t have to crush the downtrodden in order to fix the system. I-330 immunizes doctors so insurance companies can make more money - I-336 holds insurance companies, doctors, and lawyers accountable and provides solutions.

Because high premiums are the professed number one doctor concern, I-336 outlines insurance reform, including creation of an affordable supplemental insurance fund. Because five percent of doctors are responsible for half of the medical error claims, I-336 mandates that Medical Quality Assurance effectively police its own.

Because the public believes there are too many frivolous lawsuits, lawyers face fines and penalties if they file such claims. (See synopsis box at end of article).

The insurers and medical association detest I-336. They call it “evil” and “vindictive.” The insurers are outraged to see reform measures that require them to open their books to the public and justify rate hikes.

The medical association is incensed by the prospect of being required to scrutinize those who repeatedly commit preventable medical errors. (WSMA does not monitor its members in any way similar to that of WSBA, and it shows; Washington ranks near the bottom of all states in its discipline of errant doctors). Both are incredulous that I-336 tackles the topic of meritless lawsuits.

The ills of a medical system long beleaguered by inadequate reimbursement schemas and staggering bureaucratic burdens cannot be cured by playing upon prejudices to dismantle our tort laws. The optimistic even-handedness of I-336 provides stark contrast to the negative one-sided finger pointing of I-330.

Initiative 330 in a Nutshell

• $350,000 cap on noneconomic damages in health care claims with no increases for inflation.
• Severe truncation of the statute of limitations: one year from discovery or three years from the act or omission, whichever is sooner. This effectively imposes a “one year after discovery” statute. For minors under six it is three years - or before the child’s eighth birthday - whichever is later.
• Patients can be required to sign health care contracts with mandatory arbitration language that eliminate any right to jury trial.
• Broad definition of “health care” applies to nursing homes, HMOs, drug companies, etc. and those tangentially related
• Collateral source evidence is admissible.
• An award of $50,000 or more in future damages may be paid through periodic payments.
• Unilateral restriction of plaintiff attorney fees: 40% of the first $50,000; 33 1/3% of the next $50,000; 25% of the next $500,000; and 15% of any amount over $600,000.
• A 90-day prefiling notice requirement and mandatory mediation.
• Revision of the laws of agency and vicarious liability
• Deletes the attorneys fee provision in the vulnerable adult statute
• Abolishes joint and several liability unless the health care entities are acting in concert or as an actual agent or servant.
• Adds settling entities back into the RCW 4.22.070 equation - making them empty chairs.

I-336 in a nutshell

Better Safer Health Care

• Increases citizen members of Washington State Medical Quality Assurance Commission from four to six. Requires that at least two of the citizen members are patients or consumer advocates;
• Holds doctors accountable for preventable medical injuries that have resulted in three jury verdicts against them in ten years;
• Requires mandatory state investigation of doctors with three preventable medical injuries or death events;
• Outlaws secrecy agreements in medical malpractice lawsuits;
• Requires health-care professionals to disclose all malpractice history to patients and families upon request;

Insurance Reform

• Requires insurance companies to justify all major rate hikes and open their financial records to the public;
• Prevents premium spiking- requires mandatory public hearings for rate-hikes above 15 percent;
• Creates a supplemental insurance fund for clinics, hospitals and providers;
• Requires mandatory reporting of all medical malpractice payouts over $100,000 to the Department of Health.
• Insurance Commissioner’s Office tracks all malpractice claims and makes information available to the public.

Courts

• Establishes a frivolous lawsuit standard based on CR 11 that applies to all medical malpractice cases.
• Requires attorneys who file medical malpractice lawsuits to submit a certificate of merit verifying that a qualified medical expert says the lawsuit has merit. Failure to comply results in sanctions against and payment of defendant’s legal costs by the attorneys.
• Reduces costs of cases by limiting the number of experts bilaterally.