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Missouri Tort Reform and Medical Malpractice

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					                  Quality, Affordable Health Coverage
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Missouri Tort Reform and Medical Malpractice




                  Spring 2012
                                                                                                                                                                                                                                                        Cover Missouri Publication



Table of Contents
Introduction . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .4

What’s .the .Problem?  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .4
  Nationally .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .4
  Missouri  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5

What .are .Missouri’s .Tort .Reforms? .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5
  Harder to Sue  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5
  Harder to Collect Large Damage Awards  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .6

Federal .Medical .Malpractice .Reform . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .8

What .is .the .Impact .of .Reforms? .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .9
  Evidence from Studies  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .9
  Missouri Data .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .10
  How are Plaintiffs Affected?  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .11

Conclusion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .12

Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14




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Acknowledgements
This paper was written by Jeffrey Herman, JD for the Missouri Foundation for Health.




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Introduction
A tort is the right to sue for injury to one’s person or property. Medical malpractice is a tort brought
against a health care professional, usually based on negligence. Traditionally, all torts are created
by state courts and left to them to change. However, state legislatures can also change tort law
by passing statutes. Medical malpractice reform is based on a belief that the malpractice system
significantly increases the costs of health care (e.g., too many claims are made, frivolous claims
prevail, damage awards are excessive, liability insurance is too expensive, and physicians practice
defensive medicine).

This report discusses: (1) the background on medical malpractice at the state and national
levels; (2) what Missouri’s reforms are; (3) a proposed federal law; and (4) the impact of
reforms. It ultimately concludes that medical malpractice reforms may reduce total health
care spending by about 0.5 percent, reduce the number of claims and lawsuits, and increase
the supply of physicians by around 2 percent. In Missouri, the only clear impacts have been
a large drop in the number of claims and lawsuits and a much more profitable malpractice
insurance industry. The burdens of the reforms likely fall disproportionately on the young,
economically disadvantaged, and those who suffer the most severe injuries.



What’s the Problem?
Nationally
Between 1950 and 2009, total U.S. tort costs—including damages, defense costs, and administrative
expenses—rose from $1.8 billion (about $106 a person and 0.62% of GDP) to $248.1 billion (about
$808 per person and 1.74% of GDP).1 In particular, medical malpractice costs increased from
$1.16 billion in 1975 to $29.95 billion in 2009.2 If the costs of defensive medicine are added, the
total might be as high as $55.6 billion, about 2.4 percent of total health care spending.3 Though
the costs of torts are high, there is strong evidence that:

•   Medical errors harm patients in between 1.4 and 1.8 percent of hospitalizations, and the number
    of people who die from medical errors each year is higher than the number of people who die
    each year from car accidents, breast cancer, and AIDS;4

•   Only about 5 to 10 percent of negligently injured patients sue their physician or hospital, and
    only about 40 percent of those ever receive some form of compensation for their injuries;5

•   Plaintiffs win medical malpractice cases just 19 to 27 percent of the time, compared to
    52 percent of the time with other torts;6

•   Frivolous claims are far less likely to receive payment than legitimate claims;7

•   Under-compensation is more typical than overcompensation, especially for the most
    severe injuries;8

•   Overall, liability payments and administrative expenses in medical malpractice cases were
    $9.85 billion in 2008, about 0.4 percent of total health care spending;9 and




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•   Defensive medicine (i.e., when physicians order unnecessary tests or avoid risky patients
    or procedures) likely accounts for a small portion of total health care spending, around
    1.96 percent.10

Missouri
Before the first medical malpractice reforms passed in 1986, there was “an array of evidence that
both supports and refutes the existence of a ‘crisis’ in medical malpractice premiums—enough
evidence, in fact, that at the very least, it is a debatable proposition that such a crisis does in fact
exist.”11 There is similarly little evidence of a medical malpractice crisis before Missouri passed
its latest medical malpractice reforms in 2005:

•   The numbers of tort lawsuits and malpractice lawsuits filed were stable;

•   The total numbers of claims made against physicians and hospitals as reported by malpractice
    insurers were stable;

•   The percentage of claims resulting in lawsuits increased slightly, but the percentage of
    plaintiffs receiving any payment remained stable, and the percentage of claims resulting
    in a court verdict for the plaintiff steadily decreased;

•   The average amount paid on claims by malpractice insurance companies fluctuated a large
    amount year-to-year, but steadily increased from the low- to mid- $100,000s to the low- to
    mid- $200,000s (not adjusted for inflation);

•   Malpractice insurers had unprofitable years in 2002 and 2003, but paid out less than 50 percent
    of their premiums on claims in 2004 and 2005; and

•   The average economic and noneconomic damages paid after a court judgment fluctuated too
    much between 2001 and 2005 to draw any conclusions.

Whether the problems of torts and medical malpractice are real or not, Missouri and many other
states have enacted tort reforms to address them.



What are Missouri’s Tort Reforms?
Missouri’s 1986 and 2005 medical malpractice reforms were based on concerns that medical
malpractice lawsuits were increasing the costs of health care and threatening the stability of the
health care system.12 Accordingly, Missouri’s reforms are designed to make it harder to sue and
harder to collect large damage awards.

Harder to Sue
Less Time to Sue: For most torts, a person must bring a lawsuit within two or five years after
the harm is reasonably discoverable.13 For medical malpractice, however, a person has two
years from the date the wrong is committed, which means a person can lose the right to sue
before his or her injury is even discoverable.14 Moreover, a person can lose the right to sue
while mentally incapacitated.15




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Harder to Sue Hospitals: Before reform, a hospital could be liable for a physician’s malpractice
if the physician was an employee or appeared to be acting on the hospital’s behalf (making the
physician the hospital’s “agent”).16 Now, hospitals and other health care providers can only be
liable if the physician was an employee, not merely an agent.17 As a result, hospitals and other
providers can avoid liability for their physicians’ malpractice simply by hiring them as agents,
not employees.

Health Care Provider’s Opinion Required to Sue: A plaintiff seeking damages must get a health
care provider’s written opinion that the defendant acted negligently and contributed to the plaintiff’s
damages.18 The health care provider giving the opinion must be licensed and in the same profession
and specialty as the defendant.19 This requirement has been upheld as constitutional.20

Lawsuits Can Be Brought in Fewer Places: A plaintiff can sue a person for medical malpractice
only in the county in which the plaintiff first received treatment by any defendant for any medical
condition at issue.21 This definition means a plaintiff no longer has a choice of where to bring the
lawsuit, even if there are multiple defendants and injuries.

Harder to Collect Large Damage Awards
$350,000 Cap on Noneconomic Damages: Noneconomic damages include pain, suffering,
mental anguish, disfigurement, and the loss of capacity to enjoy life.22 The American Tort
Reform Association “believes that the broad and basically unguided discretion given juries
in awarding damages for noneconomic loss is the single greatest contributor to the inequities
and inefficiencies of the tort liability system.”23 Twenty-one states have put caps on non-
economic damages, while caps have been found unconstitutional in six states.24

In Missouri, a plaintiff in a medical malpractice case cannot ever get more than $350,000 in total
non-economic damages, even if there are multiple defendants or lawsuits.25 Moreover, the
amount of the cap is no longer increased with inflation.26 A prior version of the cap was upheld
as constitutional in 1992, but some members of the Missouri Supreme Court believe the current
cap is unconstitutional by violating the right to trial by jury and equal protection clauses in the
Missouri Constitution.27

Seven Limits on Punitive Damages: Punitive damages are designed to punish a defendant and
deter similar conduct by the defendant and others. As of February 2011, 32 states have reformed
punitive damages, while reforms in another two states were found unconstitutional.28 Missouri
has limited punitive damages in seven ways:

•   They must be proved by clear and convincing evidence;29

•   In a medical malpractice case, a plaintiff must prove “willful, wanton or malicious misconduct”
    on the defendant’s part, which will be difficult in a negligence case;30

•   At any party’s request, punitive damages are awarded in a two-stage trial.31 The jury
    determines a defendant’s liability for punitive damages in the first stage, and the amount
    of punitive damages in the second stage, and it is only at that point the jury can learn the
    defendant’s net worth;32

•   The amount of punitive damages is capped at $500,000 or five times the amount of other
    damages awarded, whichever is greater;33



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•   After trial, the defendant can have a punitive damages award reduced by punitive damages
    he has already paid in other cases based on the same conduct;34

•   The State keeps 50 percent of any punitive damages award, except for those awarded in medical
    malpractice claims.35 The Missouri Supreme Court has upheld this provision against attacks on
    state and federal constitutional grounds;36 and

•   Defendants are responsible only for their own punitive damages, not those of other defendants.37

Damages for Medical Treatment are Lower than Full Cost of Care: When a plaintiff seeks
damages for medical treatment, the cost of that treatment is presumed to be the amount the
health care provider accepts as full payment.38 This amount will usually be lower than the full
price the provider might otherwise charge, as most health insurers negotiate for discounted
rates, and providers often provide discounted or free care to the uninsured. However, any party
can get more or less than the presumed amount by providing “substantial evidence” of the real
value of medical treatment, which can include medical bills and amounts actually paid.39

Plaintiffs Collect Less of Their Future Damages: If a plaintiff wins more than $100,000, the
defendant can choose to pay any future damages (money for future losses) in multiple payments
over time, rather than in one payment up front.40 This is good for the defendant. He or she has
more time to pay the plaintiff and can earn interest on the money before it is paid. Moreover,
interest is only added on to future medical damages, which means inflation is constantly
reducing the value of every dollar the plaintiff gets for his or her non-medical damages.41 The
Missouri Supreme Court upheld the periodic payment system from constitutional attack.42

No Interest on Damages: For other torts, interest is added on to a plaintiff’s damages beginning
on the date ordered and ending when they are finally paid, and the beginning date can go back
to when a settlement offer was rejected if the defendant ends up owing more than the offer.43 In
contrast, a plaintiff in a medical malpractice case gets no interest as a matter of course or with
the rejection of a settlement offer.44 Fifteen other states have limited the ability of plaintiff’s to
collect interest before damages are ordered.45

No Increase or Decrease of Jury Awards: Statutes giving courts the power to increase or decrease
the amount of damages awarded by a jury do not apply in medical malpractice cases.46 Thus, courts
cannot give a plaintiff more than he or she won, but also not less.

Harder to Collect From Multiple Defendants (Fair Share Rule): Under “joint and several
liability,” a defendant responsible for any damages can be forced to pay all of the plaintiff’s
damages, and the defendant’s only option is to sue co-defendants for their shares.47 This
makes it a lot easier for plaintiffs to get paid, but is potentially unfair to defendants. As of
February 2, 2011, 39 states have reformed joint and several liability, while Pennsylvania’s
reforms were found unconstitutional.48

In Missouri, only a defendant who is responsible for at least 51 percent of the damages can be
forced to pay all the damages; otherwise, the defendant is responsible only for his or her share.49
This is called a “fair share” rule. Further in Missouri, defendants can never be forced to pay
co-defendants’ punitive damages, and juries are never told about any of these rules, which
prevents them from adjusting their verdicts to make it easier for plaintiffs to get paid.50




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No More Double Recoveries: Under something called the “collateral source rule,” a plaintiff
can get paid twice for the same loss: once by his or her insurance company, and once by the
defendant. This is because the rule prevents defendants from showing the jury the plaintiff
was paid by insurance, and prohibits such payments from reducing the plaintiff’s damages.
The purposes of the rule are to adequately deter defendants, as otherwise they would not be
responsible for the full harm they caused, and to encourage people to buy insurance. But the
rule has been criticized for allowing double recoveries, and 24 states have reformed the rule in
some way, while reforms in two states were found unconstitutional.51

In Missouri, a defendant can sometimes get around the collateral source rule. First, if the
defendant or their insurer has already paid the plaintiff for their injuries, the court will reduce
the plaintiff’s damages by that amount Second, if the defendant pays the plaintiff’s “special
damages” (like medical expenses), the defendant can introduce evidence these damages have
already been paid by someone.53 Defendants get to choose which way they get around the
collateral source rule, but they cannot do both.



Federal Medical Malpractice Reform
The Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act of 2011 (introduced
in Congress but not yet voted on) would make some laws governing medical malpractice
lawsuits the same across states.54 However, it would not apply over state laws that better protect
health care providers, or over state laws that specify the amount of damages plaintiffs can
collect. As a result, the HEALTH Act would not significantly change Missouri laws if passed.
The following would be the noteworthy changes:

•   Even Less Time to Sue: Lawsuits must be brought within one year after the plaintiff discovers (or
    reasonably should have discovered) the injury, but never more than three years after the injury.55

•   Stricter Fair Share Rule: No defendant can ever be forced to pay the damages owed by
    another defendant, just his or her own share.

•   Cap on Contingent Attorneys Fees: Attorneys fees are capped at 40 percent of the first
    $50,000; 33 1/3 percent of the next $50,000; 25 percent of the next $500,000; and 15 percent of
    any additional compensation. Missouri currently has no cap on attorneys fees.

•   Two More Limits on Punitive Damages: The HEALTH Act contains numerous provisions
    limiting punitive damages. Most of these are the same as or very similar to Missouri law.
    However, two limitations would be entirely new to Missouri:

    –   Parties can ask for punitive damages only after the court finds there is a “substantial
        probability” the party will win punitive damages;

    –   Punitive damages can only be ordered if compensatory damages are also ordered;

•   Insurance Companies Cannot Collect from Defendants or Plaintiffs: Companies that
    pay money to a plaintiff for his or her injuries, such as insurance companies, cannot sue
    defendants in order to recover amounts they paid to the plaintiff, and neither can they
    take any of the plaintiff’s winnings.


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At most, only a handful of Missouri laws would change. The provisions of the HEALTH
Act were deliberately chosen to match a group of reforms studied by the Congressional
Budget Office (CBO), showing that they can lower certain health care costs. These reports are
discussed below.



What is the Impact of Reforms?
Evidence of impact comes from studies that have not focused specifically on Missouri, as well as
from limited Missouri data.

Evidence from Studies
A group of tort reforms adopted together, similar to the HEALTH Act (i.e., a one year statute of
limitations for adults and three years for children, a $250,000 cap on noneconomic damages, a cap
on punitive damages of $500,000 or two times the economic damages, eliminating the collateral
source rule, and a fair share rule) can do the following:56

•   Reduce all medical malpractice costs by about 10 percent;

•   Reduce medical malpractice liability insurance by about 10 percent;

•   Reduce defensive medicine, saving 0.3 percent on total health care costs a year;

•   Reduce federal spending on mandatory health care services by $41 billion between 2010
    and 2019;

•   Generate $13 billion in new federal tax revenues between 2010 and 2019; and

•   Reduce total health care spending by about 0.5 percent.

The effect on health outcomes is inconclusive, as some studies find an increased mortality rate
from increased medical errors, while other studies find no effect.57

Individually, most medical malpractice reforms have no effect on total state health expenditures.
In a CBO study, the only effect found was an increase in spending due to a fair share rule.58
A fair share rule may lead to increased spending because physicians are more scared of being
personally financially responsible for their medical errors, leading to more defensive medicine.59
A fair share rule was also found to increase Medicare spending.60 A cap on noneconomic damages
reduced Medicare spending to a smaller degree.61

Other studies have examined other effects of tort reforms:

•   The Robert Wood Johnson Foundation found there is a “high” amount of evidence that:

    –   Caps on noneconomic damages reduce average payouts by 20 to 30 percent and modestly
        reduce defensive medicine,

    –   Limits on attorney fees have no effect on claim frequency, claim costs, or malpractice
        premiums,




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    –   Joint and several liability reforms have no effect on claim costs,

    –   Collateral source rule reforms have no effect on claim costs or defensive medicine;

•   Caps on noneconomic damages may make malpractice insurers more profitable;62

•   Damage caps may reduce malpractice insurance premiums;63

•   States with certain reforms—damage caps, eliminating punitive damages, limits on
    prejudgment interest, or collateral source rule reform—increase the supply of physicians
    by 2.4 percent, compared to states without any of those reforms;64

•   A cap on noneconomic damages can reduce the number of lawsuits against physicians in a
    state by 10 to 13 percent and reduce the average damages award against physicians by 65 to
    74 percent;65

•   A fair share rule can reduce the number of lawsuits against physicians in a state by 8 to
    9 percent;66 and

•   An unpublished study shows that tort reforms might increase health insurance coverage for
    the self-employed and young single individuals by up to one percentage point.67

Thus, reforms can save a small amount of money for the health care system, reduce the number
of claims and lawsuits against physicians, and slightly increase the supply of physicians, but
there is inconclusive evidence on how it will impact health outcomes.

Missouri Data
Some conclusions about the impact of reforms in Missouri can be drawn:

•   Anticipating the reforms, plaintiffs tried to get their claims and lawsuits in before the
    reforms took effect or eliminated their rights to sue, as the number of claims and lawsuits
    jumped dramatically in 2005 and 2006, respectively;

•   Most claims and lawsuits have dropped since reform:

    –   Claims against physicians are down about 24 percent, from an average of 847 in the four
        years before reform to an average of 643 after reform;

    –   There was no drop in claims against hospitals, as the average number of claims increased
        after reform from 367 to 376;

    –   Tort lawsuits are down about 23 percent, from an average of 19,165 in the four years before
        reform to an average of 14,819 after;

    –   Malpractice lawsuits are down about 35 percent, from an average of 864 before reform to
        an average of 575 after;

•   Despite a small drop in 2006, the number of claimants receiving any compensation has
    remained steady around 30 percent, and the percent of all claims resulting in a court
    verdict for the plaintiff has remained steady around 1 percent;




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•   Medical malpractice insurers have become more profitable, using less than a third of the
    premiums they collect to pay actual liability claims;

•   The average amount of economic damages awarded in court fell nearly two-thirds in 2007,
    but has increased every year since to levels higher than before tort reform; and

•   The average amount of noneconomic damages awarded in court has fluctuated too much to
    draw any conclusions.

With claims and lawsuits down, state malpractice costs may have decreased, but the benefits
may not have resulted in reduced premiums for physicians, since insurers now keep a greater
percentage of their premiums, and plaintiffs are getting payments and winning in court at the
same rates as before.

How are Plaintiffs Affected?
Missouri Supreme Court Justice Michael A. Wolff believes the drop in Missouri malpractice
cases since 2005 disproportionately affects the elderly, the disabled, and those who do not work
outside the home (mostly women).68 Judge Teitelman agreed, writing that:

       [T]he impacts of the caps will fall disproportionately on the young and economi-
       cally disadvantaged. Young people, because they will have to live with their
       injuries and disabilities the longest, bear the brunt of [the cap on noneconomic
       damages]. Similarly, those with generally more limited economic prospects—the
       poverty-stricken, the physically and mentally disabled, single mothers, wounded
       veterans, the elderly, and others—are impacted disproportionately by the arbitrary
       limits on non-economic damages…Few lawyers will take a complex case of medi-
       cal negligence on behalf of a poor person whose damages are disproportionately
       non-economic. For the young and economically disadvantaged, [the cap] will act…
       [as] a padlock on the courthouse door. As compelling as the state’s interest in qual-
       ity health care is, I cannot see the necessity of providing that care on the backs of
       the most disadvantaged victims of medical negligence.69

This argument is supported by studies showing that caps on noneconomic damages dispro-
portionately affect children and the most severely injured plaintiffs. For example, a study of
California’s $250,000 cap showed that noneconomic damages make up 98 to 99 percent of the
damages in child wrongful death cases, and 58 to 75 percent of damages in adult injury and
wrongful death cases.70 Future economic damages for children are usually too speculative to
collect (e.g., it is uncertain what a child might have earned in his or her lifetime), and juries
may adjust by awarding larger non-economic damages. As a result, the cap on non-economic
damages reduced the average award in child wrongful death cases by 81 percent, and the
average award in adult injury and wrongful death cases by 12 to 51 percent. For example, a
plaintiff whom the jury awards $2 million for the death of a child may get only $380,000 after
the cap is applied.




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Conclusion
There is debate as to whether there has ever been a crisis with medical malpractice nationally
or in Missouri, but regardless, the State has responded with numerous reforms designed to
make it harder to sue and harder to collect large damages. The federal HEALTH Act, currently
before Congress, would not change these laws much. As a group, the reforms may reduce total
health care spending by about 0.5 percent, reduce the number of claims and lawsuits against
physicians, and increase the supply of physicians in the state by around 2 percent. In Missouri,
the only clear impact has been a drop in the number of claims and lawsuits made and a more
profitable malpractice insurance industry, while other indicators remain largely as they were
before reform. Ultimately, the burdens of the reforms likely fall disproportionately on the
young, economically disadvantaged, and those who suffer the most severe injuries.




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                                                 Outcomes of Medical Malpractice Torts in Missouri

                                                                             Percentage    Percentage         Average                      Avg.      Avg. Non-
                         All                                 Percentage                                                   Malpractice
         All Torts                 All Claims   All Claims                    of Closed   of All Claims      Insurance                   Economic    Economic
                     Malpractice                               of Claims                                                   Insurance
         Filed in                   Against      Against                       Claims     Resulting in      Indemnity                    Damages     Damages
                     Torts Filed                              Resulting                                                    Company
         Missouri                  Physicians   Hospitals                     Receiving   Court Verdict    Payment per                  After Court After Court
                     in Missouri                             in a Lawsuit                                                 Loss Ratios
                                                                            any Payment    for Plaintiff   Closed Claim                 Judgment Judgment

 1990                                                                                                        $86,314

 1991                                                                                                       $130,883

 1992                                                                                                       $122,957

 1993                                                                                                       $160,607

 1994                                                                                                       $120,952

 1995                                1021         433           71.9                           1.7          $128,213         50.5

 1996                                840          430           70.8                           1.4          $155,317         95.3

 1997                                756          389           58.4                           2.4          $161,835         53.2

 1998                                744          378           43.8                           2.9          $149,933         54.4

 1999                                824          311            73             33             1.5          $135,016          73

 2000    19,061         784          989          359           72.5           27.9            1.7          $211,039         70.7

 2001    18,627         777          830          346           73.1           33.1            1.4          $171,244         81.4        $191,706    $142,479

 2002    19,485         871          968          386           79.9           33.7            1.1          $205,432        107.6        $172,972    $313,637

 2003    20,109         965           918         363           75.7           30.9             1           $211,850         96.7        $274,192    $132,964

 2004    18,718         839          834          383           79.6           28.2            1.2          $237,925         49.7        $158,112    $271,357

 2005    18,347         780          1,635        593           82.6           27.2            0.9         $266,066           46         $148,411    $284,365

 2006    24,980        1,232         586          341           86.2           21.8            1.4         $229,225          33.7        $234,559    $136,052

 2007    14,669         502          659          384           83.7           30.9            0.9          $186,851         12.2         $84,234    $162,552

 2008    14,050         516          591          357           81.4           29.4            0.9          $199,460         15.9        $109,373    $194,339

 2009    14,702         604          692          360           79.9           28.3            1.5          $245,853         29.5        $262,810    $205,153

 2010    15,853         676          689          436            76            29.9            1.2          $191,344         30.5        $284,169    $139,597

SOURCES: The numbers of torts and malpractice torts filed in Missouri are available in the Missouri Courts’ Annual Statistical Report –
Supplement for each year, at http://www.courts.mo.gov/page.jsp?id=296. All other statistics are found in or calculated from data found in the
Missouri Department of Insurance, Financial Institutions & Professional Registration’s annual Medical Malpractice Insurance Reports, available at
http://insurance.mo.gov/reports/medmal/.




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Endnotes
1   Towers Watson, U.S. Tort Cost Trends: 2010 Update at 5-6, 8 12 (2010), available at http://www.towerswatson.com/assets/
    pdf/3424/Towers-Watson-Tort-Report-1.pdf. These costs include all torts, whether settled before or after a lawsuit is filed, or
    resolved through a trial verdict. Id. at 2.
2   Id. at 14.
3   Michelle M. Mello et al., National Costs of the Medical Liability System, 9 Health Affairs (Sept. 2010), available at http://www.
    ncbi.nlm.nih.gov/pmc/articles/PMC3048809/?tool=pubmed.
4   Linda T. Kohn et al., To Err is Human: Building a Safer Health System: Executive Summary, at 1 (1999) (citing studies),
    available at http://www.csen.com/err.pdf.
5   David A. Hyman & Charles Silver, Medical Malpractice Litigation and Tort Reform: It’s the Incentives, Stupid, 59 Vanderbuilt
    L. Rev. 1085, 1089 (2006); Brian K. Chen, Defense Medicine Under Enterprise Insurance: Do Physicians Practice Defensive
    Medicine, and Can Enterprise Insurance Mitigate Its Effect?, at 9-15 (2010), available at http://papers.ssrn.com/sol3/papers.
    cfm?abstract_id=1640955.
6   Hyman and Silver, supra note 5 at 1107.
7   Id. at 1094 (“a strong correlation exists between the likelihood of receiving payment and the merits of malpractice claims;” and
    “[t]he HMPS, the only study to find the contrary, is unreliable on this point”).
8   Id. at 1112.
9   See Mello et al., supra note 3.
10 See id.
11 Adams v. Children’s Mercy Hosp., 832 S.W.2d 898, 904 (Mo. 1992)
12 H.B. 393, 93d Gen. Assembly, 1st Reg. Sess. (Mo. 2005) (medical malpractice reforms); Mahoney v. Doerhoff Surgical Services,
   Inc., 807 S.W.2d 503, 507 (Mo. 1991) (“It is readily understood [the 1986 medical malpractice reforms were a] response to . . .
   public concern over the increased cost of health care and the continued integrity of [the health care] system”). More general
   tort reforms not specific to medical malpractice reform were passed in 2004. S.B. 1211, 92d Gen. Assembly, 2d Reg. Sess. (Mo.
   2004) (numerous tort reforms); H.B. 1115, 92d Gen. Assembly, 2d Reg. Sess. (Mo. 2004) (Commonsense Consumption Act).
13 Rev. Stat. Mo. §§ 516.100, 516.140 (two years for intentional torts), 516.120(3) (five years for other injuries).
14 § 516.105 (three exceptions to the limitation).
15 Rev. Stat. Mo. § 516.170 (excluding medical malpractice from tolling of the statute of limitations). See also Hodges v. Southeast
   Mo. Hosp. Ass’n, 963 S.W.2d 354, 359 (Mo. Ct. App. W.D. 1998) (explaining the same). The only way for an adult victim of
   medical malpractice to toll the statute of repose is by continuing to receive care and treatment essential to recovery from
   the allegedly negligent provider. See Hooe v. St. Francis Med. Ctr., 284 S.W.3d 738, 739-40 (Mo. Ct. App. S.D. 2009) (citing
   Montgomery v. South County Radiologists, Inc., 49 S.W.3d 191, 194 (Mo. 2001)).
16 Bost v. Clark, 116 S.W.3d 667, 675 (Mo. Ct. App. W.D. 2003); George v. Lemay Bank & Trust Co., 618 S.W.2d 671, 674 (Mo. Ct.
   App. E.D. 1980).
17 Rev. Stat. Mo. § 538.210.2(3).
18 Rev. Stat. Mo. § 538.225.1. The Missouri Supreme Court found the provision manifested the legislature’s intent to eliminate
   strict liability for medical malpractice actions. Budding v. SSM Healthcare System, 19 S.W.3d 678 (Mo. 2000).
19 § 538.225.2 (actively practicing in the same specialty or within 5 years of retirement from doing so).
20 Mahoney v. Doerhoff Surgical Services, Inc., 807 S.W.2d 503 (Mo. 1991).
21 § 538.232. A plaintiff can sue a person for a tort only in the county where the plaintiff was first injured. § 508.010.4. A lawsuit
   that is not brought in the right place can be transferred or dismissed. § 508.010.10.
22 538.205(7).
23 American Tort Reform Association, Tort Reform Record, at 32 (2010), available at http://www.cirt.org/Resources/Documents/
   ATRA_Record_122010.pdf.
24 Id. at 2-3.
25 Rev. Stat. Mo. §§ 538.210.1, 538.210.2(2).
26 See H.B. 393, 93d Gen. Assembly, 1st Reg. Sess. (Mo. 2005).
27 See Adams v. Children’s Mercy Hosp., 832 S.W.2d 898 (Mo. 1992) (rejecting challenges based on the Missouri Constitution).
   In a concurrence in Klotz v. St. Anthony’s Medical Center, Judge Wolff expressed his opinion that the cap violates the right
   to trial by jury in the Missouri Constitution, and may unconstitutionally usurp judicial power. Klotz v. St. Anthony’s Med.
   Ctr., 311 S.W.3d 752, 773-81 (Mo. 2010) (J. Wolff, concurring). Judge Teitelman agreed and also believes the cap violates
   the equal protection clause of the Missouri Constitution by “discriminati[ng] against the small number of unfortunate



                                                                     14
                                                                                                                       Cover Missouri Publication


    individuals who suffer the most debilitating, painful, lifelong disabilities as a result of medical negligence.” Id. at 782-83 (J.
    Teitelman, concurring).
28 ATRA, Tort Reform Record, supra note 23, at 2-3.
29 Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 111 (Mo. 1996).
30 Rev. Stat. Mo. § 538.210.5. In other cases, they are available if the defendant acted with an “evil motive,” which can be shown
   by wanton, willful, or outrageous acts, or by a reckless disregard for an act’s consequences. Burnett v. Griffith, 769 S.W.2d 780,
   787 (Mo. 1989).
31 § 510.263.1.
32 § 510.263.2, 3.
33 § 510.265.1 (plus exceptions)
34 Rev. Stat. Mo. § 510.263.4. See also § 510.264.4, 5 (exceptions).
35 § 537.675.2. The State contributes 74 percent of its share to the Uncompensated Tort Victims Fund (see below) and 26 percent to
   help fund civil legal services for low-income individuals. §§ 537.675.5, 537.678.1.
36 See Fust v. Atty. Gen. for the State of Mo., 947 S.W.2d 424 (Mo. 1997); Hoskins v. Bus. Men’s Assurance, 79 S.W.3d 901 (Mo.
   2002).
37 § 537.067.2.
38 § 490.715.5(2). See also § 490.715.5(1) (any party has right to introduce evidence of the value of medical treatment received by
   any party).
39 Id. See also Deck v. Teasley, No. SC90628 at 7 (Mo. 2010).
40 Rev. Stat. Mo. § 538.220.1, 2.
41 § 538.220.2.
42 See Adams v. Children’s Mercy Hosp., 832 S.W.2d 898 (Mo. 1992).
43 §§ 408.040.2, 3.
44 § 538.300.
45 ATRA, Tort Reform Record, supra note 26, at 2-3.
46 Rev. Stat. Mo. § 538.300.
47 § 537.060 (right to contribution).
48 ATRA, Tort Reform Record, supra note 23, at 2-3.
49 Rev. Stat. Mo. § 537.067.1 (two exceptions).
50 § 537.067.2, 3.
51 ATRA, Tort Reform Record, supra note 23, at 2-3, 14 (stating that “35% of total payments to medical malpractice claimants are
   for expenses already paid from other sources,” but providing no source for the statistic).
52 Rev. Stat. Mo. §§ 490.710.1, 2.
53 §§ 490.715.2, 3; Murphy v. S.S. Kresge Co., 205 S.W.2d 252, 256 (Mo. Ct. App. 1947) (special damages include medical expenses).
54 H.R. 5, Rep. No. 112-39, 112th Congress, 1st Session (2011), available at http://www.govtrack.us/congress/billtext.
   xpd?bill=h112-5. There are also numerous federal laws that supersede state tort law in specific circumstances. See, e.g., ATRA:
   Federal Laws Addressing Liability, http://www.atra.org/reforms/federal/ (last visited Sept. 15, 2011).
55 The HEALTH Act also provides that the time to bring an action is tolled if there is fraud, intentional concealment, or a foreign
   object is left inside the body. If a person is a minor under age 6, the lawsuit must be brought within three years of the injury’s
   manifestation, but in no case earlier than the day before the minor’s eighth birthday. This provision would be much stricter
   than Missouri law, which gives minors at least until their 20th birthday to file suit, and would preempt state law.
56 Letter to Senator Orrin G. Hatch, from Douglas Emendorg, Director, CBO, at 2-5 (Oct. 9, 2009), available at http://www.cbo.
   gov/ftpdocs/106xx/doc10641/10-09-tort_reform.pdf. See also Randall R. Bovbjerg, Malpractice Reform and Healthcare Costs, in
   IOM, The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary at 326 (2011), available
   at http://www.iom.edu/Reports/2011/The-Healthcare-Imperative-Lowering-Costs-and-Improving-Outcomes.aspx (literature
   review arguing that total health care savings of up to 0.9 percent are plausible).
57 Letter to Orrin Hatch, supra note 56, at 5-6.
58 Congressional Budget Office, Medical Malpractice Tort Limits and Health Care Spending, at 22, 25 (Apr. 2006), available at
   http://www.cbo.gov/ftpdocs/71xx/doc7174/04-28-MedicalMalpractice.pdf.
59 Letter to Senator John D. Rockefeller IV, from Douglas W. Emendorf, Director, CBO, at 3, (Dec. 10, 2009), available at http://
   www.cbo.gov/ftpdocs/108xx/doc10802/12-10-Medical_Malpractice.pdf.



                                                                       15
    60 CBO Report 2006, supra note 58, at 23.
    61 Id.
    62 CBO, The Effects of Tort Reform: Evidence from the States, at viii (2004), available at http://www.cbo.gov/ftpdocs/55xx/doc5549/
       Report.pdf.
    63 Leonard J. Nelson III et al., Damages Caps in Medical Malpractice Cases, 85 Milbank Quarterly 259, 269-274 (2007), available at
       http://ww.cfah.org/HBNS/ARCHIVES/viewSupportDoc.cfm?supportingDocID=406.
    64 Daniel P. Kessler et al., Impact of Malpractice Reforms on the Supply of Physician Services, 293 JAMA 2618, 2621-22 (2005),
       available at http://www.seeph.pro.mcg.pl/files/Resources%20Articles/Health%20Policy/H-policy-3.pdf (three years after
       adoption, the effect was 3.3 percent). See also David A. Matsa, Does Malpractice Liability Keep the Doctor Away? Evidence
       from Tort Reform Damage Caps, at 2, 21-27 (Jan. 19, 2007), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_
       id=920846 (caps on damages in medical malpractice cases can increase the supply of specialist physicians in rural areas by
       10-12 percent).
    65 Romen Avraham, An Empirical Study of the Impact of Tort Reforms on Medical Malpractice Settlement Payments, 36 J. Legal
       Studies S183, S206, S208 (2007), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=912922.
    66 Id.
    67 Ronen Avraham & Max Schanzenbach, The Impact of Tort Reform on Private Health Insurance Coverage, February 2010, at
       3 (May 12, 2010), available at http://www.law.northwestern.edu/searlecenter/papers/Schanzenbach_tort_reform_and_health_
       insurance.pdf.
    68 Klotz v. St. Anthony’s Med. Ctr., 311 S.W.3d 752, 773 (Mo. 2010) (J. Wolff, concurring).
    69 Id. at 782-83 (J. Teitelman, concurring).
    70 J. Clark Kelso & Kari C. Kelso, Jury Verdicts in Medical Malpractice Cases and the MICRA Cap (Aug. 5, 1999), available at
       http://www.micra.org/preserving-access/docs/clark_kelso_mcgeorge.pdf.




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