by Pat Dunnigan
Updated 11 months ago
They were paying premiums that had nearly doubled each year for the past four years. Doctors who performed specialty procedures were paying as much as $72,000 a year for insurance. The average price of coverage had grown to about $56,000 per physician, says Brad Reid, the practice's administrator.
In addition, their carrier, Mag Mutual, had put the practice on notice that it probably wouldn't extend coverage beyond the next six months. The insurer cited mammography as the largest source of liability costs. The procedure is a lifesaving tool, but it will miss some number of cancers -- and therefore poses, for some insurers, an unacceptable risk of lawsuits.
To Peterson, the message was clear: If she continued to offer mammography, she'd lose her insurance coverage.
Peterson knew of the Florida Medical Association's efforts to pass a constitutional amendment capping lawyers' fees, which the FMA touts as a way to stem insurance costs, but she wasn't really comfortable with the idea of asking her patients to sign the petition to put it on the ballot.
Still, she wanted to do something. And she knew someone who might be able to help. Peterson telephoned state Rep. Carole Green, whose breast cancer Peterson had diagnosed a year earlier after a routine mammogram. Early detection had left Green with an excellent prognosis and a good relationship with Peterson.
"She called me in December, quite upset," Green recalls. "They couldn't afford to do mammograms anymore. Their insurance rates were going through the roof."
The result of the conversation was House Bill 1087, which proposed immunity for all Florida radiologists from malpractice lawsuits arising from mammograms, except in cases of "gross negligence" -- a legal standard that involves proving reckless or intentional disregard.
It was a radical, if narrow, protection that its supporters justified as a way to save women's lives. Lawsuits against radiologists, the argument went, would force them to stop providing mammograms and lead to a rash of undiagnosed breast cancers. "That bill is very personal for me," Green says.
Ultimately, House Bill 1087 was amended to create a work group to study the issue. But HB1087 wasn't the only narrowly drawn bill that was intended to limit lawsuits in some fashion. Lawmakers drafted at least 24 more like it last session -- attempts to create customized tort reform for everyone from paintball concessionaires to car dealers.
Some bills were drafted to affect the outcome of still-pending cases. Other proposed laws singled out individual businesses for protection.
Though only a handful of the proposals actually became law, the efforts highlight important trends in the tort reform battle as that conflict enters its fourth decade.
First, despite murky evidence, it's now an unquestioned article of faith among medical and business interests that lawsuits are driving higher insurance costs -- and that limiting the ability to sue, by whatever means, is the solution.
Second, while constitutional amendments get the big headlines, much of the war will likely be waged in a multitude of smaller skirmishes and micro-legal efforts, law by law, rule by rule.
"It's like World War I," says Peter Lake, a professor of law at Stetson University College of Law in Gulfport. "The trenches are moving by inches, and both sides claim major victories."
In Lake's view, lawmakers increasingly will use "tinker-tailor" laws to address every court decision that leaves someone unhappy with the outcome. It's "an attempt to adjudicate very particular issues," he says. "It's the Legislature deciding to codify everything in the courtroom."
Tort reform has been a perennial theme in Florida politics for at least 30 years. Business, insurance and medical interests have sought to correct what they see as an out-of-control system that produces windfall profits to plaintiffs lawyers and their clients without fairly or consistently reconciling legitimate fault with legitimate damages.
Recent momentum has been largely on the side of those who want to limit the ability to sue. Since the 1980s, state legislators have passed four packages of tort reform provisions that have chipped away at the ability of Florida residents to use the courtroom to settle their grievances.
Some reforms, including limits on punitive damages and caps on non-economic damages like pain and suffering, are designed to restrain jurors' generosity.
Another changed the rule that allowed a plaintiff to recover all of his damages from any defendant who could pay. That change was designed to cut down damages for the deep-pocket defendant in cases where fault is divided among multiple defendants. In 1986, the Legislature abolished such "joint and several liability" for the payment of non-economic damages. In 1999, lawmakers added caps on economic damages based on a defendant's percentage of fault.
Other reforms are designed to stop liability lawsuits from being filed in the first place. They include things like shortened deadlines for filing product liability cases and malpractice lawsuits and the creation of stronger defenses against premises liability and product liability cases.
Other provisions have created pockets of immunity for groups like emergency room doctors and healthcare providers under contract to state or local government.
Less visible, but no less dramatic, is the increasingly pervasive use of tools like arbitration clauses to restrict lawsuits. Consumers now routinely sign away their right to sue when they sign contracts for everything from insurance coverage to credit agreements. Businesses like arbitration because it saves money, both in defense costs and by limiting damages and costs associated with pretrial investigation.
There is also growing interest in creating specialized arbitration panels whose members are drawn from the industry using them. Such approaches are similar to the system used to arbitrate disputes against stockbrokers.
Trial lawyers have mounted challenges every step along the way, in the Legislature, in the courts and in the voting booth. In 1988, they defeated a push by the Florida Medical Association to impose a $100,000 cap on non-economic damages.
But not all of their victories have been defensive. In 1990, trial lawyers successfully lobbied for a new law that extended the right to sue for wrongful death to allow adult children and the parents of adult children to bring survivor claims. The medical lobby was able to wrangle an exemption for medical malpractice deaths.
The Nursing Home Patients Bill of Rights has also been a dramatic success for trial lawyers in creating new damages and the recovery of attorney fees for neglected or mistreated nursing home patients.
The result is a hard market during which premiums, particularly for malpractice insurance, have spiked even though claims -- adjusted for inflation and for the number of doctors -- have been relatively flat over the past 15 years.
For doctors, the premium spike has been compounded by Medicare and HMO reimbursement schedules that haven't kept up with costs. "It hurts a lot more in this cycle," Hunter says.
Hunter also cites the result of a 1999 study to determine the relationship between insurance rates and the level of tort reform provisions in 51 states. The results surprised everyone. "We found no correlation between tort reform and rate changes," Hunter says.
That doesn't mean it couldn't be done, he adds. "I don't have any doubt that you could design tort reform that would lower costs. It depends on how draconian you want to be."
For example, caps have little effect because the lowest cap adopted anywhere is $250,000 while the average malpractice claim is about $30,000, Hunter says.
Facts and anecdotes?
Whatever you believe about who's gained the most ground in the tort reform war, it's clear that many in the business and medical communities are immovably entrenched in their belief that lawsuits continue to proliferate and spin more and more out of control.
They are not without anecdotal evidence. Thanks to a sophisticated network of legal education seminars and shared information, even small firm lawyers can take on big corporate defendants. Every successful lawsuit leaves behind a roadmap for others to follow. When a key defense witness flounders on the stand or makes a damaging admission in a deposition, it's on the internet quickly.
Meanwhile, various individual cases take on iconic status as validating the need for reform: Auto insurers still fume over the 1997 case of Heidi Kraengel, who sued State Farm Mutual Auto Insurance Co. for coverage for jaw injuries she said she suffered in a car accident. Kraengel won her case and was awarded $12,000 in medical expenses, but a provision of tort law meant State Farm got stuck paying her attorney fees. The tab: $554,850.
Meanwhile, the trial Bar fires back with its own anecdotal evidence -- egregious cases of serious injury or death as a result of corporate indifference or medical malfeasance -- and cloaks its members as defenders of individuals' legal rights and crusaders for public health and safety.
Longwood trial lawyer Mark A. Nation, who represented Kraengel in her case against State Farm after another lawyer declined it as too risky, has a favorite opener when speaking to groups about trial lawyers: "How many of you drove a Ford Pinto to get here?" he asks. "When you drive by a gas station at night, look at how bright the lights are. That's because of plaintiffs lawyers."
Beyond the anecdotes, however, things get fuzzy. Many numbers are surprisingly unavailable. No one can calculate the exact cost of liability lawsuits because most lawsuits are resolved out of the courtroom. The Department of Insurance's database tracks the insurance companies' "closed claim" information but relies on the industry to supply the numbers. For some type of liability, like automobile, closed claim information does not segregate lawsuits from ordinary claims for repairs filed by policyholders.
The numbers that are available do not make a clear-cut case for litigation reform. The number of tort suits in Florida -- 37,369 -- is not increasing, for example; there were 2,568 fewer last year than the year before, according to statistics kept by the Office of State Courts.
By comparison, there are more than 100,000 lawsuits a year filed for such things as property and contract disputes and debt collection.
"Every business and corporation jealously guards its right to file suit against anyone and everyone in the universe," notes Paul Jess, the Academy of Florida Trial Lawyers' general counsel.
As for the claim of ever-climbing jury awards, studies of verdicts are skewed by what study sponsors leave in or leave out. A 2002 study by the Academy of Florida Trial Lawyers reported that the average medical malpractice award in Florida was $250,000, for example. A similar study commissioned by the Florida Medical Association came up with $3.5 million.
Why the disparity? The FMA study looked only at reported jury verdicts. The trial lawyers tracked all verdicts, including non-jury verdicts, through appeals, settlements and court-ordered reductions.
Often, the most vitriolic tort reform advocates simply don't have data to back up their anecdotal evidence. The Florida Medical Association can't say, for example, whether the number of malpractice lawsuits against doctors in Florida is actually increasing or whether verdicts or judgments against doctors are getting bigger.
"I can't answer that," says FMA Communications Director Lisette Gonzalez-Mariner. "What we're talking about is through anecdotal information," Mariner says. "There are no hard numbers."
Such was the case with HB 1087: Rep. Green acknowledges she filed the bill without knowing, for example, whether other radiologists around the state were refusing to offer mammograms or whether mammography errors account for a disproportionate number of malpractice suits. Neither the insurance industry nor the FMA could provide solid data on whether medical liability insurers were paying out huge mammography-related claims. "I never could get them to say that," Green says.
Last year, when the Senate Judiciary Committee took the unusual step of placing speakers under oath, advocates of medical tort reform backed off several key contentions. Among them were assertions that "frivolous" lawsuits were a problem, that Florida was losing doctors and the high cost of insurance had shut down emergency rooms and trauma centers.
Robert E. White Jr., president of the state's largest malpractice insurer, First Professionals Insurance Co., testified that it made more money in Florida than any other state and said damage caps weren't necessary for his firm to remain profitable.
Some insurance companies, however, were sending a different message to physicians about the efficacy of tort reform in holding down insurance rates. Florida Medical Association President Carl "Rick" Lentz, a Daytona Beach plastic surgeon, says insurance industry representatives have "hinted" and "suggested" that the constitutional amendment could reduce doctors' malpractice premiums by as much as 30%. That's not enough, Lentz says, but "it would stop the bleeding."
Lawyers say the insurance companies are playing the doctors for fools. Whether that's true, or whether the doctors simply hate trial lawyers more than they distrust their insurance companies, the FMA's leadership remains unswerving in its belief that litigation is driving the price of premiums. Insurance companies are paying out $1.48 in claims for every dollar paid in premiums, Lentz says. "They have to raise the rates."
Lentz acknowledges that tort reform is personal for doctors. "I come from a time when (as a doctor) you're a hero," he says. Lawsuits, he says, are destroying doctors and not making patients safer. "The discipline of physicians has not been accomplished by lawsuits," he says. "Medical liability lawsuits are only about money. It's not bad doctors; it's bad results."
Meanwhile, insurance industry news-letters and marketing materials don't portray an industry crippled by the weight of litigation costs.
"A steep decline in underwriting losses and premium growth that nearly hit double digits sent net income for property casualty insurers soaring to $29.9 billion last year -- almost 10 times the $3 billion recorded in 2002," National Underwriter magazine reported in April.
David Lewis, an insurance industry analyst with SunTrust Robinson Humphrey in Atlanta, acknowledges that the property and casualty insurance industry is in the midst of a rebound. But he says the severity of lawsuits has risen, no matter what courthouse statistics show. Enormous verdicts ripple through the industry regardless whether they are uncommon, he says, because cases like the recent $1.03-billion Texas verdict against drugmaker Wyeth set a new benchmark for future juries and influences insurance companies' decisions whether to cut a check or fight.
"The megajury awards have been significant over the past 10 years," Lewis says.
Trial lawyers argue that while the big numbers capture the headlines, routine reductions of such awards go unnoticed. In Texas, for example, no one expects Wyeth to pay anything near a billion dollars in damages because Texas law caps punitive damages -- which account for $900 million of the Wyeth verdict -- at no more than twice the amount of economic damages, plus $750,000.
The next big clash on the tort reform horizon is the FMA-sponsored constitutional amendment that would reduce lawyers' percentage of contingency fees in medical malpractice cases. Wrapped in language that emphasizes a bigger share of damages for the client, its real intent is to make some medical malpractice cases so unprofitable that attorneys will not take them in the first place.
As of May, about 360,000 signatures had been collected toward the 488,000 verified signatures required to put the measure on the ballot. "We fully expect to be on the ballot in November," says associate general counsel Jeff Scott.
But unlike in 1988, when the FMA's damage cap amendment caught the trial Bar off guard, the lawyers have no intention of playing strictly defense this year. They've countered with three proposed amendments of their own. One would strip a doctor of a license to practice in Florida after three malpractice judgments. Another would make public "adverse incidents" and peer review reports of medical incidents. A third would require doctors to charge all patients the same rate for any given service.
A late spring Mason Dixon poll showed the first two measures are "overwhelmingly popular" with voters, with about 75% of those who responded indicating they would vote to approve, says Jess, the Academy of Trial Lawyers' general counsel.
By comparison, the same poll shows the doctors' amendment getting a 47% approval rating, he says.
Back in Fort Myers, Dr. Peterson is among the stakeholders who watch as the battle lines move by inches. Peterson, an old-fashioned doctor who insists on meeting personally with each patient whose mammogram she reads, knows firsthand that doctors get sued for things like the known and disclosed side effects of a particular treatment. She knows that being a good doctor is not necessarily a good defense. And she believes that uncontrolled liability insurance costs will end up costing some patients their lives.
But Peterson says she ended up not quite ready to endorse the proposed law she inspired. "I don't think immunity for mammography is a good idea either," she says, pausing to weigh how much she should say. "I've seen a lot of screw-ups. I don't think that's safe. I think that would allow a looseness that could be detrimental to patients."