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Brainwashing the Citizens about Health and Tort Reform

Friday, May 15 2009 @ 03:37 AM CDT

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The Truth About Health Care and Tort Reform

by Barbara O'Brien

"Tort reform" is the Right's favorite cure for the health care crisis. Experience reveals the "cure" is a ripoff.

Preface: As the fight for health care reform heats up this year, we’re going to be hearing a lot about “tort reform.” Just as “tax cuts” are the Right’s one-size-fits-all answer to all economic problems, “tort reform” is the Right’s favorite magic bullet for fixing the health care crisis.

Very generally, tort reform refers to a range of legal measures that limit the ability of an individual to sue for damages for personal injury. For example, tort reform laws may place limitations on jury awards and attorney’s fees or raise the burden of proof needed to win a case.

This post is the first of a series looking at real-world results of tort reform in several states. I also want to investigate what impact malpractice litigation really might have on health care, either cost or quality. Other questions: What’s really making health care costs go up? What percentage of malpractice suits turn out to be frivolous? Who’s behind the “tort reform” movement?

Tort reform laws impact a broad range of personal injuries, including injuries to employees from unsafe working conditions and injuries to consumers from unsafe products. This post is the first of a series series focusing on on tort reform affecting medical malpractice.

“Tort reform” is a mantra of the Right, along the lines of “tax cuts,” “supply side,” and “drill baby drill”; a simplistic answer to several complex problems. One hears that frivolous malpractice cases are a major cause of rising health care costs. Tort reform advocates say fear of litigation also causes physicians to perform unnecessary tests and procedures, a practice called “defensive medicine.” It is claimed that the high cost of medical malpractice insurance causes physicians to move their practices to states with more favorable tort laws, or close their practices altogether. Thus, tort reform should benefit patients by lowering health care costs and providing more doctors.

That’s the theory, anyway. Since 1986 more than half of the 50 states have enacted some kind of tort reform. For example, 34 states have legal limits on punitive damages, and 23 states have capped “non-economic” damages. By now we should be able to measure the real impact of tort reform.

We find in several states that tort reform has significantly reduced rates of medical malpractice insurance paid by physicians. This in turn has helped some states attract more physicians, especially physicians in high-risk practices, such as surgery.

However, we also find, in state after state, that the passage of tort reform laws does nothing to reduce overall health care costs. Health care costs and patient insurance premiums continue to increase at the same rate as before, if not faster. And the promised cost reductions from less “defensive medicine” never materialize.

Further, tort reform does nothing to make medical care safer. And patients whose lives have been devastated by malpractice find it much more difficult after “tort reform” to seek justice in courts.

Unfortunately, the American public has been so thoroughly saturated with the Right’s misinformation and unsupported claims about tort reform that they are accepted as gospel. Just start a conversation about health care costs with co-workers or family members, and it’s a near certainty that someone will bring up tort reform as the prime solution.

And even after most of the promised benefits of tort reform have failed to materialize in states that implement it, the Right continues to make the claims. As with “supply side economics,” it doesn’t matter to proponents how many times the theories fail to pan out in the real world. It’s still their final answer.

Let’s start by looking at a very recent example of tort reform myth tripping over tort reform fact.

Out of Luck in Las Vegas

In January 2008, the Health District of Southern Nevada noticed a cluster of hepatitis C cases in Clark County. Normally there are two new cases of the dangerous liver disease a year in the county. Suddenly there were three, then four, then six. And all infected patients had been treated at the Endoscopy Center of Southern Nevada in Las Vegas. In fact, five of the six patients had been treated at the clinic on the same day.

Researchers learned that for at least four years the clinic had been injecting medication from single-dose vials into more than one patient, sometimes re-using syringes as well. This is a serious breach of standard medical practice. If ever there was an open-and-shut case of medical malpractice, this was it.

The Health District sent notices to 40,000 patients who had been treated at the Endoscopy Center to be tested for hepatitis C and B. Eventually more than 100 patients were found to be infected.

According to the Center for Disease Control, although sometimes hepatitis C is a short-term illness, most often it becomes a chronic condition that can lead to cirrhosis of the liver and liver cancer. Symptoms sometimes do not develop for weeks or months. Some patients feel no symptoms even for several years, until cirrhosis of the liver develops. Some patients are severely debilitated for the rest of their lives.

Unfortunately for the infected patients of the Endoscopy Center of Southern Nevada, Nevada’s “tort reform” laws limit the compensation they might receive from court. Further Nevada law provides such a short statute of limitations that it is possible some of the infected patients already may have waited too long to file.

What Nevadans Got From Tort Reform

In 2004 Nevada passed its current medical malpractice law, called the Keep Our Doctors in Nevada Act, or KODIN for short. As the name suggests, the KODIN Act was sold to Nevada as the solution to the state’s chronic physician shortage. However, according to a report by J. Patrick Coolican of the Las Vegas Sun, five years after the passage of KODIN there is still a physician shortage.

Also, like the rest of the country, Nevada still faces rising health care costs and increasing numbers of uninsured citizens. Today Nevada Governor Jim Gibbons wants to cut state employees’ health benefits because the state can’t keep up with the cost.

Partly in response to the hepatitis C infections, the Nevada legislature is considering revising state malpractice law in cases of gross negligence.

But as soon as the Nevada legislature began to discuss rolling back some of 2004 tort reform provisions, an organization called Keep Our Doctors in Nevada came forward to warn that changes in the malpractice law would leave Nevada with a serious shortage of doctors and rising medical costs — in other words, exactly what Nevadans have without changing the malpractice law.

The Frist Connection

The Keep Our Doctors in Nevada PAC was formed in 2002 to campaign for the passage of tort reform law in Nevada. The biggest contributor to the PAC, to the tune of $75,000, was Sunrise Hospital and Medical Center of Las Vegas. Sunrise is owned by the for-profit Hospital Corporation of America (HCA), based in Nashville, TN.

HCA was founded by the Frist family, of which former Republican Senator Bill Frist is a member. HCA made multi-millionaires of the Frists. At the time the KODIN PAC was selling the people and legislature of Nevada on tort reform, the Senator’s shares of HCA were in a blind trust, while his father and brother were running the company. However, as John Nichols wrote in The Nation (November 29, 2006),

By blocking needed health care reforms, pushing for tort reforms that would limit malpractice payouts and supporting moves to privatize Medicare, Frist pumped up his family’s fortunes at the expense of Americans who lacked access to health care.

This is not meant to disparage Sunrise Hospital, which has a good reputation. But the story of the infected endoscopy patients is representative of the broader story of tort reform. Tort reform is packaged and sold as a benefit to everyone. In reality, tort reform amounts to citizens giving up much of their rights in court in exchange for … well, nothing.

The Scope of the Problem

Yes, at times lawyers have milked the tort system to enrich themselves. I don’t claim that older tort laws were perfect. There are a number of thorny questions presented by specific types of personal injuries, such as disease resulting from asbestos exposure and even extraordinary rendition, that will require careful review if the law is going to be fair to both complainants and defendants. However, we cannot have sensible discussions about these issues until we separate tort myths from tort facts.

Next in the Series: Who's Behind Tort Reform?

**************************************************************

How -- and why -- powerful special interests manipulate public opinion on many issues, including tort reform.


In 1992, tort reform found its poster child in a product liability suit — Liebeck v. McDonald’s Restaurants, more commonly known as the McDonald’s Coffee Case. The complainant, 79-year-old Stella Liebeck, spilled a cup of McDonald’s coffee on herself and suffered third-degree burns serious enough to require skin grafts.

Initially, Liebeck asked McDonald’s for $20,000 to cover her medical expenses, but McDonald’s offered only $800. Liebeck’s attorney discovered that McDonald’s required its franchises to serve coffee at a scalding hot temperature, and that other customers had received serious burns. A jury eventually awarded Liebeck $2.7 million in punitive damages, which was slashed to a little more than $600,000 by the judge. Liebeck eventually settled for an undisclosed amount less than $600,000 after appeals.

The Right seized upon this story as an example of greedy lawyers and litigation-crazed loonies who clog up courts with frivolous suits. The extent of Liebeck’s injuries or the facts of the case didn’t seep into the public consciousness; all most people knew is that some woman got millions of dollars for spilling hot coffee.

I bring this up because the McDonald’s Coffee Case still seems to haunt us. For example, this diatribe from Rush Limbaugh is from March 2009:

So you, you’re in McDonald’s. You order some Chicken McNuggets. They don’t have to any. You call 911. This happened in Port St. Lucie, Rio Linda East. You go to McDonald’s, you order some Chicken McNuggets, they don’t have any, you call 911, you call 911 not once, you call 911 not twice, you call 911, you call the cops and the fire department because McDonald’s doesn’t have Chicken McNuggets. Call Obama. The answer to this problem, call Obama. Okay, so this person that calls 911 three times over no Chicken McNuggets, some fast moving lawyer sees the story, calls her up and says, “I’ll take your case on contingency. We’ll sue McDonald’s for $25 million for misrepresentation in advertising, menu and so forth. They didn’t have what they promised, they wanted to charge you for it nevertheless, and you were so distraught you had to call the cops.”

Rush’s point? The diatribe is titled “Tort Reform Is Key Health Care Fix.” If those greedy litigants and their ambulance-chasing trial lawyers would stop filing nonsense suits, everyone’s health care costs would go down.

And the American public seems to have bought this. No one likes the greedy woman who got millions of dollars from McDonald’s just because she spilled her coffee. That’s not what happened, but ask around — that’s what many people think happened.

And because the McDonald’s Coffee Case has seeped into national consciousness, Rush Limbaugh doesn’t have to come up with examples of real-world litigation to make his point. He just has to evoke McDonald’s. Perhaps someone did call 911 because a restaurant didn’t have what she wanted, but that bit of silliness has nothing whatsoever to do with tort reform.

Who Is Behind Tort Reform?

Who’s really behind the disinformation campaign seeling tort reform? Rush Limbaugh didn’t begin it. He’s just one of the water carriers, albeit a prominent one.

Let’s start by asking, Who benefits? As I said in Part I, when a state enacts tort reform measures, often substantial cuts in medical malpractice insurance costs do result. However, there is evidence these savings are passed on to the medical consumer or have any impact whatsoever on overall health care costs within that state.

It’s not hard to see that business interests — insurance companies, tobacco companies being sued by emphysema patients manufacturers of asbestos-related products being sued by mesothelioma patients– came up with tort reform as a way to protect themselves from lawsuits. But these interests have very powerful allies with a broader agenda.

For an indispensable guide to Who’s Behind Tort Reform, please read “The Attack on Trial Lawyers and Tort Law” by Dave Johnson of the Commonweal Institute. Johnson documents how a small group of extremely wealthy, and extremely right wing, family foundations built a mighty propaganda machine to sell their agenda to the American Public. These foundations include the Lynde and Harry Bradley Foundation, the Koch Family foundations, the John M. Olin Foundation, the Scaife Family foundations and the Adolph Coors Foundation.

These foundations in turn fund a vast network of organizations — more than 500 at the time Johnson wrote this report — that work in concert to influence public opinion. Among these are groups that try to pass as part of a “grassroots” movement, such as American Tort Reform Association (ATRA) and Citizens Against Lawsuit Abuse (CALA). There are also a number of “think tanks” in the movement, such as the Heritage Foundation, the Washington Legal Foundation, the Cato Institute and the American Legislative Exchange Council.

These organizations pretend to be separate from each other, but in fact they are interconnected, and their messaging often is coordinated. Because they appear to be independent, they give each other an aura of credibility when they site each others’ “research,” which, unremarkably, contain much of the same data and reach the same predetermined conclusions. Dave Johnson writes,

The majority of the “conservative” experts and scholars writing newspaper op-ed pieces, books and magazine articles, and even the organizations that generate the “talking points” and position papers used by TV pundits and radio talk show hosts, are directly funded by, work for organizations supported by, or receive some form of support from this core group of funders.

Regarding “tort reform,” the strategy includes circulating of false lawsuit scare-stories, defaming and diminishing trial lawyers in the public mind, and even disseminating anti-lawyer jokes and cartoons.

Thus, it is widely believed a woman got millions of dollars from McDonald’s just because she spilled her coffee.

Bush and His Brain

Karl Rove is another major player in the tort reform story. In the 1980s, when he was gaining a reputation in Texas as a killer political consultant, Rove began to push tort reform as a winning wedge issue for Republicans. Trial lawyers usually were Democratic Party supporters and so could be demonized without penalty to Republicans. And the interests lining up in favor of tort reform had very deep pockets. Win/win!

Tort reform was a major plank in George W. Bush’s gubernatorial campaign in 1994, and he signed a sweeping tort reform bill into law in 1995. When Bush ran for president in 2000, the Bush campaign claimed tort reform as one of the governor’s great successes. Most of the alleged benefits of the bill can be explained by other factors; for details, see Richard A. Oppel Jr. and Jim Yardley, “Bush Calls Himself Reformer; the Record Shows the Label May Be a Stretch,” The New York Times, March 20, 2000.

I might mention that the claims made by the Bush campaign in 2000 are still being repeated on the website of the American Tort Reform Association.

The Bigger Picture

Dave Johnson writes that the ultra-conservative interests behind the tort reform movement have two major goals:

1. Weakening constraints on corporations and financial institutions, such as insurance companies;
2.
3. Limiting the income of trial lawyers, which limits their ability to lobby and contribute money to the Democratic Party and progressive causes.
4.
I would add one more:

5. Tax relief for the wealthy.

Part of this picture is the extreme Right’s total opposition to government health-care programs, even for the poor, the retired, and children, never mind a national health care program for everyone. For years, tort reform has been pushed as the magic bullet that will solve the health care crisis without raising taxes. Expect to hear more of the same over the next few months.

Part III will focus on the tort reform message the Right is generating today.

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How tort reform advocates are lying to you.

“Tort reform” proposals include a range of changes in personal injury liability laws, such as caps on the amount of damages the injured person can be awarded in a court. In a later post I will go into more detail about the effect these caps have had on injured individuals.

I am not arguing that personal injury law in the U.S. is perfect, or that it is never abused. Further, there are a number of thorny issues that need to be resolved regarding specific types of claims, such as mesothelioma resulting from decades-past asbestos exposure, if the law is going to be fair to both complainants and defendants.

My argument, however, is that before citizens allow state and federal legislatures to reduce their rights to take grievances to court, we all need to clearly understand the arguments being made for tort reform. Some of those arguments have some validity, but many of them are just flat-out false.

For example, recently Alan Miller, CEO of Universal Health Services, Inc., wrote a “guest blog” for CNBC promoting tort reform. Let’s take a look at his arguments.

Without much-needed reforms to limit jury awards for non-economic damages, the cost of malpractice insurance will continue to rise. That, in turn, will increase the exodus of physicians from states without limits. And large jury awards make healthcare needlessly expensive for all Americans.

This statement is partly true and partly not. It is true that where states have put caps on non-economic damages awarded to juries, the rates of malpractice insurance premiums have gone down. It is also true that at least some states with lower malpractice insurance premiums attract new doctors, especially those at the beginnings of their careers. But are significant numbers of doctors with established practices packing up and moving to other states with lower malpractice insurance?

The American Association for Justice — yes, a trial lawyers’ association — looked at the recent “Physician Characteristics and Distribution” report from the American Medical Association. The data show no correlation between capping malpractice awards and attracting more doctors to a state. In fact, “Using data from 2007, the analysis concludes that states without caps actually have more doctors per 100,000 (319) than states that set limits (283), a difference of 13%.”

CEO Miller’s claim that large jury awards make health care needlessly expensive for all Americans is simply not true. Medical malpractice payouts are less than one percent of total U.S. health care costs. See also “Faulty Data and False Conclusions: The Myth of Skyrocketing Medical Malpractice Verdicts” by Lewis L. Laska, J.D., Ph.D. and Katherine Forrest, M.D., M.P.H.; and “Quick Facts on Medical Malpractice Issues” by Public Citizen.

Miller continues,

Physicians from states without malpractice reform have either abandoned or restricted their practices or moved to states with lower rates for malpractice insurance. In either case, the result is that residents of states that have not enacted tort reform have fewer physicians to provide treatment, and have higher expenses for their healthcare.

That’s a claim one hears a lot — that citizens of states that have enacted “tort reform” enjoy better access to physicians and lower costs for healthcare. But it is not true. Of the many states that have enacted tort reform laws over the past several years, not one has shown reduced overall health care costs, or can even document that health care costs have increased at a slower rate. Health insurance premiums have continued to go up in these states.

Miller:

Malpractice reform will do more than lower costs for physicians. It will help lower the overall cost of healthcare for everyone and help physicians provide better care for patients.

A recent survey by the Massachusetts Medical Society and the University of Connecticut Health Center revealed that among physicians surveyed, 83 percent reported that they had practiced defensive medicine. That study showed that an average of 28 percent of tests, procedures, referrals and consultations were ordered for defensive reasons. The study also concluded that 13 percent of all hospitalizations ordered by physicians were ordered for defensive purposes.

You can find no end of studies that suggest tort reform ought to reduce medical costs. The study cited above is a prime example. But it doesn’t happen. For example, a 2008 study by the MIT Quarterly Journal of Economics that looked at vital statistics of millions of births concluded “it does not appear to be true” that tort reform reduces “defensive medicine” cost.

Other studies that have looked at the results of tort reform say they find no evidence that physicians change “defensive” practices. Physicians may sincerely believe they would not order so many tests or procedures if they weren’t concerned about legal liability, but in practice, it doesn’t happen. See also Jim Landers, “Malpractice damage caps not a cure for high health care costs,” Dallas Morning News, April 21, 2009.

This is the kind of messaging I’m seeing lately from tort reform advocates. They have seized upon the one measurable effect of tort reform — that it lowers the cost of medical malpractice insurance — and imply that all manner of other benefits must flow from that, in particular lower health care costs and an improved supply of doctors. But cheaper malpractice insurance is the only objectively measurable, beneficial effect of tort reform that we can find in states that have enacted it. The other effects amount to empty promises that are never fulfilled.

By the way, CEO Miller’s company, Universal Health Services, Inc., enjoyed a 17 percent increase in first quarter 2009 earnings, at a time in which many other businesses were struggling and going under. Make of that what you will.

**************************************************************

How "tort reform" punishes the innocent to protect the guilty.

This part of the series is about the rights and protections citizens lose because of “tort reform.”

In brief, the word “tort” generally refers to personal injury. If Sally did something that caused John to be injured, John can sue Sally for damages. Tort law is vast and complicated. Certain situations present difficult issues, such as mesothelioma resulting from decades-past asbestos exposure, that are difficult to determine fairly.

On the other hand, you can read in Part I about residents of Las Vegas who contracted hepatitis C because of a clinic’s malpractice. It is possible some plaintiffs who tested positive for the hepatitis C virus may be unable to sue because the statute of limitations ran out before they developed symptoms.

But depriving citizens of the right to sue is more than unfair. Some tort reform laws amount to violations of the 7th Amendment — “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, ….”

Tort reform puts limits on both the ability to sue and the amount of damages the plaintiff can be awarded. People are told the reform will reduces “frivolous” or “junk” lawsuits, which sounds grand. But tort reform blocks legitimate lawsuits as well, and sometimes takes away a citizen’s right to sue.

No Remedies in Texas

As explained in Part II, in the 1980s Karl Rove identified tort reform as a winning Republican issue. His client, George W. Bush, made tort reform a big part of his platform when he ran for governor of Texas and president of the United States. One of his first acts when he became governor in 1995 was push for a massive overhaul of Texas tort law.

This overhaul amounted to gutting Texas consumer protection law. Among the first people to be hurt by the change in law were homebuyers, especially people who had used their life savings to build new homes. Texans who found their new homes had serious construction flaws were shocked to find out they could not sue the builders. The law stipulated their only recourse for compensation was through private arbitration. But the arbitration system was expensive and set up to favor the builders. So, people who paid hundreds of thousands of dollars for homes they could not live in were mostly out of luck. (See David Savage, “The Race for the White House: Texans Still at Odds Over Bush’s Legal Reforms,” The Los Angeles Times, September 22, 2004.)

Damage Caps

One of the most common features of tort reform law is a cap on “non-economic” damages. Let me explain:

Economic damages are out-of-pocket expenses caused by the injury. These can include medical expenses, lost income, and the cost of replacing or repairing damaged property. These are usually calculated from bills, receipts and estimates.

Non-economic damages can be awarded for subjective, non-monetary losses, such as pain and suffering, disability, disfigurement, the loss of the use of something, or mental anguish.

It is sometimes thought that non-economic damages are less necessary, because they don’t represent out-of-pocket expenses so the plaintiff doesn’t really need the money.

But consider the story of 53-year-old David Fitzgerald, who lost both legs and both arms because of an infection contracted while he was in a hospital for ulcer surgery. The hospital simply did not treat the infection — which was treatable — promptly or aggressively enough, and eventually Fitzgerald’s limbs had to be amputated to save his life.

In March 2009 a jury awarded Fitzgerald $6.72 million in economic damages and $11 million for pain and suffering. But the $11 million immediately was reduced to $250,000, because Texas law puts a cap on non-economic damages.

You might think $7 million is still a lot of money. But some of that goes to Fitzgerald’s lawyers. And consider he is still a middle-aged man who needs constant assistance just to clean, dress and feed himself, never mind the cost of whatever prosthetics or rehabilitation are possible now or might be possible in the future.

Remember, economic damages usually are limited to expenses the plaintiff can document at the time of the trial. In cases of genuinely catastrophic injury, such as Fitzgerald’s, the plaintiff’s real expenses for the years of his life after the trial may be impossible to calculate. For these plaintiffs, the non-economic awards are not just a frill. One of the purposes of so-called non-economic awards is to recognize the effect of an injury on the rest of the injured person’s life.

Some states not only cap non-economic damages; in many cases they also limit economic awards to the amount of receipts or bills the plaintiff can produce at the time of the trial. It should be noted also that a few states are re-thinking rigid, one-size-fits-all caps and giving judges and juries discretion to lift them if a case involves permanent physical injury, some kind of catastrophic injury or gross negligence or recklessness.

Also, note that punitive damages are not considered to be the same thing as non-economic damages, because punitive damages are intended to punish the guilty party, usually for reckless or malicious behavior, and deter others from the same behavior.

Benefits to Society?

As I’ve documented in the previous parts of this series, the one tangible, beneficial effect of “tort reform” is lowering physician malpractice insurance costs. For this reason, if you do a web search for “non-economic damages” you can find argument after argument for capping them, often written from a physician’s point of view.

But in no state have such caps reduced health care costs or lowered the rate of health insurance premiums, as advocates promise they will. For this reason, I think we ought to consider some other remedy for physician malpractice costs, rather than punishing injured people like David Fitzgerald.

http://www.alternet.org

Barbara O'Brien is the owner/proprietor of The Mahablog. She writes about Buddhism for About.com and and now blogs on behalf of the Mesothelioma and Asbestos Awareness Center on their new mesothelioma blog. She has guest blogged at the Take Back America Conference and for Crooks and Liars.






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