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June 2002
Volume 66 |
Number 6
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VENTILATIONS
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| America the Suable |
Mark J. Lema, M.D., Ph.D.
Editor
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Mark J. Lema, M.D., Ph.D. Editor
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Perhaps we are witnessing the beginning of the end of capitalism.
Big business is violating the public trust. Politicians are representing
lobbies rather than constituents. Trial attorneys are out of control.
In the era of only one superpower, which is the most powerful
and technologically advanced country to ever exist on the planet,
a growing state of uneasiness exists. Americans suffering post-9/11
depression are more conservative and tentative when investing,
traveling and purchasing. Recession recovery has been stalled.
Can anything reverse this downward economic spiral? The obvious
place to start would be tort reform. Litigation costs are so astronomically
high that the very roots of society are being rotted. As physicians,
we are witnessing the exodus of obstetricians, orthopedic surgeons
and neurosurgeons out of Mississippi, Nevada, Pennsylvania and
West Virginia. A malpractice insurance crisis seems imminent,
and most states are apt to be affected. The driving force that
has increased rates beyond the breaking point involves the abandonment
of St. Paul companies in underwriting malpractice insurance. Other
companies also have dropped this line of business. Their reasoning
is simple economics – one does not spend $1.99 in payouts
for every $1 collected. The remaining companies willing to provide
coverage are expected to increase rates as much as 300 percent
over the next 20 years. St. Paul handled 25 percent of the malpractice
market covering 42,000 physicians and 750 hospitals in 12 states.1
With their departure, malpractice costs for neurosurgeons and
obstetricians could reach $400,000 annually!
With the rapid egress of doctors from West Virginia, Pennsylvania,
Nevada and Mississippi, their state legislatures are deliberating
over tort reform legislation. However, this issue is time-critical
because once doctors leave, it is hard to replace them, especially
considering the looming doctor workforce shortage. Las Vegas –
the city of opportunity for many new settlers – is losing
42 percent of their obstetricians, leaving 78 physicians to cover
23,000 births in a population of 1.5 million! When queried, 76
percent of all obstetricians have been sued, and 40 percent have
been sued three times or more.
Another horrifying trend is emerging in rural areas. It seems
that it is cheaper to let the patient die than to expend resources
and incur legal exposure by attempting heroic medical care. Hospitals
are closing emergency rooms, maternity wards or ceasing neurosurgical
coverage because of high malpractice costs. In Bisbee, Arizona,
closure of the only maternity ward within 4,000 square miles has
forced pregnant women to travel 60 miles to the next labor and
delivery suite. In Mississippi, a $5 million malpractice suit
awarded because a neurosurgeon failed to obtain a CT scan on a
27-year-old who tripped in a movie theater (he had a "slow"
subdural hematoma) has resulted in no neurosurgical coverage in
one out of every four days in the hospital's emergency room. No
physician is willing to move into Mississippi because it is too
tort-friendly. As a consequence, if someone has head trauma on
the no-coverage night, it will take at least one hour to transport
the patient to the nearest neurosurgeon.
I do not wish to give you the impression that avaricious, unscrupulous,
"carpe diem" trial attorneys are preying only on doctors.
These omnivores are crippling the business sector with asbestos
litigation, construction claims, director/officer liability lawsuits
and, of course, drug company cases.
With respect to pharmaceutical lawsuits, Americans have an Alice-in-Wonderland
perception. As an example, if a drug can save or prolong 1,000
lives for every person who might die from a reaction, most individuals
would gladly take the medication if afflicted with the disease.
However, if a person dies from the medication, society, as is
evident in recent court awards, believes that the survivors should
collect at least $5.7 million.2 Recent medical
articles have estimated that 100,000 people die from drug-related
incidents in the United States. If each person's estate received
$5.7 million, the total cost would be $570 billion, or twice the
combined revenues of the 12 largest pharmaceutical companies!
It is no wonder that "wonder" drugs, vaccines, orphan
drugs and off-patent drugs (? droperidol) will no longer be manufactured
for fear of company-bankrupting lawsuits. If a corporation wanted
to price the cost of an essential orphan drug that had a 1-percent
fatality based on current claims, the cost would be $57,000 per
dose.
To place the entire tort craze in perspective, here are a few
facts garnered from a recent Forbes article by Michael Freedman.3
- According to Tillinghast-Towers Perin, tort costs increase
twice as fast as the economy and will comprise 2.4 percent of
the gross domestic product by 2005, totaling $298 billion.
- Tort costs per person in the United States rise 4.3 percent
yearly and will reach $1,000 per person in 2005.
- The average malpractice award was $1.1 million in 1994 and
is now $3.5 million in 2001.
- Asbestos insurance payouts will hit $130 billion, or three
times the estimated payout for the 9/11 World Trade Center attacks.
- Nationwide, 12 percent of all jury awards exceed $1 million
except in Mississippi, New York and Pennsylvania, where 20 percent
exceed $1 million.
- Of the total dollar payout:
20 percent goes for economic loss
22 percent goes for noneconomic loss
25 percent goes for legal administrative costs
16 percent goes for defense costs
17 percent goes for claimant's attorney's fees
If tort reform is not seriously addressed in this country, doctors
will not practice in rural areas or tort-friendly states, pharmaceutical
companies will not make essential but less profitable drugs, executives
will not sit on corporate boards and construction workers will
stop building low-cost housing. It is obvious that aggressive
trial attorneys born without a conscience or soul will not reign
themselves in. Moreover, it is unlikely that politicians will
enact tort reform when the 56,000 trial lawyers expend $1.4 million
annually in political action committee monies supporting (mostly
Democrats') campaigns. So must we wait until the economy collapses
before action is taken?
I usually offer a few suggestions that might reverse this process,
but the only solution is a serious change in the way we regard
retribution for damages caused to individuals. Caps on noneconomic
losses and emergency funds that bypass the court system (such
as the September 11 fund) to quickly compensate victims will be
part of the solution. Legislation banning lawsuits for administration
of orphan drugs or special procedures will encourage drug companies
and doctors to expand the health care horizons. Perhaps closing
a couple of hundred law schools also might help the cause. The
media could exercise some self-restraint in spectacularizing commonly
known side effects of drugs or procedures so the sue-crazy mentality
of many Americans can be changed. Finally, it might be worthwhile
to advertise to all Americans the impact of the tort system on
their lives. In this way, the next time one slaps a friend on
the back for receiving a $1 million settlement in a frivolous
lawsuit, he or she might reflect that $600,000 went to the attorney
and associates and that $1,000 came out of his (her) own pocket
in the form of increased product prices.
– M.J.L.
References:
1. Freedman M. The Tort Mess. Forbes. 2002; May
13:92.
2. Ibid. pg 92
3. Ibid. pg 93-4
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