President Seeks Cap on Verdicts
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WASHINGTON – President Bush revived the administration’s offensive against tort lawyers yesterday, calling on Congress to cap jury awards in medical malpractice lawsuits by the end of the year.
The president will extend the push today, when he is to meet with members of Congress from both parties to resuscitate legislation that would curb class action lawsuits. Tomorrow, he is expected to travel to Michigan to call for limits on the growing numbers of asbestos-related lawsuits.
Trial lawyers, Democrats, and other critics of the malpractice proposal are fighting back with a publicity campaign highlighting the horrors of medical errors and disputing assertions that jury awards to victims are to blame for rising health care costs. One television ad features a woman who had both breasts removed in a mistaken cancer diagnosis.
Critics are also trying to shift the blame for rising insurance premiums from trial lawyers to insurance companies, which they say should be more closely regulated.
Mr. Bush said yesterday that his reelection demonstrated Americans agree with his view that litigation is contributing to growing health-care costs and that they endorsed his plan to limit noneconomic damages in medical malpractice suits to $250,000.
“I talked about it nearly everywhere I went on the campaign trail, and I believe the voters made their position clear on Election Day about medical liability,” he said.
The costs of medical malpractice insurance are driving doctors out of business and increasing health care costs around the country, Mr. Bush said.
“This liability system of ours is, I’m telling you, is out of control,” Mr. Bush said during a speech in Madison County, Ill., which the American Tort Reform Association last year called “judicial hellhole” because of its reputation for having a history of huge plaintiffs’ awards.
To underscore his contention that almost half of all American hospitals lost physicians or reduced services because of medical liability concerns, Mr. Bush was joined by several local physicians and patients, including a neurosurgeon who closed his trauma practice after his premiums doubled, and an obstetrician who left the state in search of lower premiums.
Critics said Mr. Bush is “faking” a litigation crisis, and they urged Congress to target insurance companies instead.
The senior Democrat on the Judiciary Committee, Senator Leahy of Vermont, said yesterday he plans to introduce a bill that would reduce medical malpractice insurance rates and modify the industries’ exemption from federal anti-trust laws.
“By ignoring the central truth of this crisis – that it is a problem within the insurance industry, not the tort system – the administration has proposed a plan that punishes victims by capping non-economic damages,” Mr. Leahy said in a statement.
He said a special exemption prevents enforcement officials from investigating whether insurers are colluding to keep rates high. A coalition of advocacy groups, the Americans for Insurance Reform, said caps on jury awards would not reduce insurance premiums that are high for unrelated reasons.
“The causes of the problems are the business and accounting practices of the insurance industry, and the fact that they have lost investment income due to dropping interest rates which began a few years ago, and are taking it out on doctors and policyholders,” said the founder of the coalition, Joanne Doroshow.
The coalition was organized by the Center for Justice and Democracy, which received seed money from a filmmaker and critic of the president, Michael Moore.
The president of the Association of Trial Lawyers of America, Todd Smith, said the president is “perpetuating myths” and diverting attention from the rising costs of drugs, hospitals, and “record insurance profits that increased 1,000% last year.”
But the insurance industry vehemently disputed the accusations, and it is fighting to keep the debate centered on lawsuits.
The chief economist for the Insurance Information Institute, a trade organization, Robert Hartwig, said insurance industry profits have been high in areas such as auto insurance, but medical malpractice insurers have been losing money.
Medical malpractice insurers have paid out $1.30 to $1.50 for every dollar they collected in premiums in recent years, according to the association.
“The insurance industry was profitable last year in spite of the disastrous medical malpractice industry, not because of it,” Mr. Hartwig said.
While insurers enjoy a limited exemption from anti-trust laws, the exemption does not affect malpractice premiums, he said.
“It is not legally permissible, and never has been, for insurers to collude on rates,” Mr. Hartwig added, noting that insurance rates are closely regulated by states.
Mr. Bush said the risk of costly lawsuits leads physicians to practice what he called “defensive medicine,” which increase health care costs. “That means they’re writing prescriptions or ordering tests that really aren’t necessary, just to reduce the potential of a future lawsuit,” he said.
Dr. Harvey Wachsman, president of the American Board of Professional Liability Attorneys, which certifies specialists for the American Bar Association, said defensive medicine is a myth.
Lawsuits are growing because malpractice is increasing, said Mr. Wachsman, who is a neurosurgeon as well as a lawyer. He blamed the trend on health maintenance organizations that limit patient care.
“The reason the malpractice goes on is that HMOs have denied physicians any opportunity to take time with the patients,” he said.
He argued that insurers are raising rates because they lost money on investments when interest rates declined in recent years.
Although tort law has traditionally been left to the states, Mr. Bush said it should be regulated at the federal level because rising insurance premiums cost the federal government an additional $28 billion each year in Medicare, Medicaid, and veterans’ benefits.
“Medical liability reform is a national issue and it requires a national solution,” Mr. Bush said.
The House of Representatives has passed the proposed cap, but the proposal has failed repeatedly in the Senate. Last April the Pregnancy and Trauma Care Access Protection Act of 2004, which would have limited medical malpractice liability under some circumstances, was defeated on a vote of 49 to 48. Senators Clinton and Schumer voted against the measure.