Response to Lombana Article

Attached an Op-ed I have submitted to the Miami Herald in response to the Lombana article.


Med-mal crisis: Working Towards A Solution

Doctors in South Florida faces the highest professional liability insurance premiums in the nation. With rapidly increasing premiums threatening the economic viability of many physicians and restricting access to needed medical care, organized medicine four years ago launched a campaign to preserve the practice of medicine in Florida. After a contentious and costly fight the Legislature responded by limiting the amounts malpractice victims can win in lawsuits – about $500,000 per doctor in most cases. Voters changed the state constitution to cap how much victim’s lawyers can get paid in contingency fees: 30 percent of the first $250,000 won (that's a maximum of $75,000) and 10 percent above that. Subsequently, the measures helped stabilize and even reduce the malpractice premiums paid in Florida. According to the state Office of Insurance Regulation Rates dropped 3 percent on average last year, but for may this is still a drop in the bucket.
Even though, the majority of medical liability claims are closed without payment to the plaintiff the physicians who win at trial still have large fees to pay for their defenses. Average defense costs were $93,559 per claim in cases where the defendant prevailed at trial. And in cases where the claim was dropped or dismissed, costs to defendants averaged $18,774.
In the daily medical practice the threat of a lawsuit hangs like a sword of Damocles over physician’s heads. This has unintended consequences including limited access to specialists in rural areas and medical residents’ growing concerns about liability issues may cause them to avoid choosing high-risk specialties or practicing in a crisis state. Forty-eight percent of students in their third or fourth year of medical school indicated the liability situation was a factor in their specialty choice, which will adversely impact the already shrinking physicians supply in a crisis state such as Florida.
According to a U.S. Department of Health and Human Services report medical liability adds billions to the cost of health care each year – which means higher health insurance premiums and higher medical costs for all Americans.
We need to find an alternative to the current litigation system, which is threatening health care quality for all Americans as well as raising the costs of health care for all Americans.

In the search for alternatives we must adapt new paradigms of thinking and abandon trench warfare in which doctors oppose lawyers and insurance companies.


Problem solving approaches requires cooperation instead of confrontation and should include the following:

1. The trial bar and organized medicine should jointly develop an alternative to the current litigation system that may include features of a no-fault approach and specialized medical courts.

2. Insurance companies must do a better job of rate setting during good markets in order to minimize steep rate hikes during bad ones. Most did the opposite during the 1990s. They underpriced policies and relied on investment gains to offset underwriting losses. Insurance regulators must be vigilant in monitoring the premiums charged policyholders. In monitoring companies' financial health, state officials should focus on underwriting profits and losses, independent of the company's investment income.

3. Insurance companies should change the way they rate individual policyholders, from a focus on specialty, risk, and location to a focus on actual claims history rewarding doctors with high skill levels of care.

4. Create a national reinsurance plan that includes all US companies that write malpractice insurance. The insurers would cede certain premiums to the plan, and, in return, the plan would assume responsibility for all claims over a set catastrophic amount. This would prevent excessive premium fluctuations.
These are just a few suggestions that may help to reform our flawed medical liability system.

Most importantly we must create a system that effectively and fairly compensates injured patients, deters poor quality medical care, and encourages the adherence to the highest standards of care for all Floridians.

The time is running out and we have to act NOW!

Bernd Wollschlaeger,MD,FAAFP
President-Elect, Dade County Medical Association
E-mail: info@miamihealth.com


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Posted on Mon, Jan. 14, 2008
Future of med-mal caps in doubt

BY HECTOR LOMBANA
Five years ago, following a well-documented battle between insurance companies and patient rights groups,
Florida capped statutory damages on medical malpractice insurance awards. Recent news suggests that the future of these caps may be in jeopardy.

One Florida court ruled the caps unconstitutional; another court ruled them constitutional. The issue is expected to return to the spotlight as the cases are appealed to the state's Supreme Court.

Medical malpractice lawsuits are declining nationwide, even in states without caps, while in Florida insurers earn record profits. It appears the medical malpractice ''crisis,'' propagated by the insurance and healthcare industries' campaign of fear, may have been vastly overstated.

Medical liability claims filed against healthcare providers continue to fall nationwide because of more patient-safety programs created by hospitals, according to a recent study by AON Corp. in conjunction with the American Society for Healthcare Risk Management. The annual report concludes the frequency and severity of hospital claims are at new lows, resulting in a loss-cost trend that is the lowest in the study's eight-year history.

The authors of the report said that hospitals are creating patient-safety programs for emergency rooms and obstetric departments. They predict hospitals will spend less on liability judgments, and many will realize lower liability expenses in 2008.

The news that malpractice claims are diminishing nationwide is not a surprise to medical malpractice attorneys. Lawsuits involving mishandled deliveries have helped to force hospitals to focus more on fetal heart monitoring and high-risk deliveries, and improvements in the assessment of patient symptoms in emergency departments can also be traced to successful malpractice cases.

As lawyers have argued for years, the ''free market'' of meritorious litigation has forced healthcare providers to react. The reduction of claims means lives are being saved and disabilities prevented, which results in a significant positive impact for our society and economy.

Additionally, a report from the Florida Office of Insurance Regulation indicates the number of claims has declined, and the state's seven largest medical malpractice insurers (covering two-thirds of the entire market) had net income of $2.2 billion in 2006, compared to $700 million in 2005. All but one of these insurers noted a decline in the percentage of premiums allocated to claims and expenses.

The health of the market led seven new companies to enter the state's medical malpractice insurance marketplace in 2006, and the increased competition and profitability of all of the insurers yielded a 3 percent rate reduction for the average physician in the state. In addition, four of the seven largest insurers filed to lower their rates in 2007, but some did not change their rates despite paying less in claims.

While the medical and insurance industries along with their legions of ''Big Business'' lobbyists will claim that the numbers reflect positive results of the med-mal reforms in Florida and many other states, the attorneys who represent the victims of negligent medical care understand that they truly illustrate how the caps on damages have prevented attorneys from taking on many meritorious but difficult cases.

The role of medical malpractice attorneys is to help victims of medical negligence acquire justice and recover just compensation for their pain and suffering as well as economic loss. However, the current caps on damages in Florida make it impossible for qualified lawyers to take on some of the most meritorious and severe cases.

By their very nature, these cases require expensive investigations by experts in order to determine their validity, and lawyers will refuse to take them on if they believe that the injured individual will go through the hardships and emotional toll of a trial only to receive little or nothing in return.

The caps have effectively denied many injured patients their day in court, and that has fueled the increased profits that the medical malpractice insurance companies are now enjoying.

After nearly five years of caps in Florida, the hoax of a supposed med-mal crisis based on a campaign of fear that falsely attributed the rising costs of healthcare to lawsuits has been exposed and is now starting to unravel. The caps on damages have only proven that they are able to enrich the insurance companies to the detriment of the injured, and the future of these caps in Florida and other states now appears to be very much in question.

Hector Lombana is a partner with the Coral Gables-based law firm of Gamba & Lombana P.A., which focuses on medical malpractice, commercial law and litigation.