H.R. 4600 and Medical Malpractice:Congress Should Act to Reduce Medical Errors,Not Reduce Compensation to Injured Patients

H.R. 4600 and Medical Malpractice:

Congress Should Act to Reduce Medical Errors,
Not Reduce Compensation to Injured Patients

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According to the Institute of Medicine, "At least 44,000 and perhaps as many as 98,000 Americans die in hospitals each year as a result of medical errors. Deaths due to preventable adverse events exceed the deaths attributable to motor vehicle accidents (43,458), breast cancer (42,297) or AIDS (16,516)."(1) The IOM estimates annual costs to the economy of medical errors between $17 billion and $29 billion. Congress would better serve the public with legislation that promotes patient safety, rather than overriding state-law deterrents that help prevent patient deaths and injuries.

Instead of reducing the costs of medical malpractice and defective products, H.R. 4600 would shift costs onto injured individuals, their families, voluntary organizations and taxpayers. Not only are the provisions unfair to victims, they also sacrifice the principles of market economics and private property long professed by the bill’s conservative advocates. H.R. 4600 has the following significant problems:

Broad scope: not just doctors are let off the hook. While sponsors say that H.R. 4600 is intended to benefit doctors, other special interests are along for the ride. Nursing home operators, medical device manufacturers, pharmaceutical companies, hospitals, and even HMOs are all covered by the bill’s definition of "health care liability claim" and would be equally insulated from liability.

Reckless Conduct No Longer Subject to Punitive Damages. Punitive damages are rarely awarded in medical malpractice cases, but the threat of punitive damages is important in deterring reckless disregard for patient safety by HMOs, nursing homes, and drug and medical device manufacturers. H.R. 4600 would reward these special interests with a benefit that even the conservative 104th Congress rejected—a complete ban on punitive damages for reckless conduct.

$250,000 cap on non-economic damages. Awards for non-economic loss (injuries such as lost child-bearing ability, disfigurement, and paralysis) compensate for the human suffering caused by medical negligence and defective medical products. These damages generally account for 35 to 40 percent of a jury’s award. Typically, such damages exceed $250,000 only in cases of NAIC Level 6 injury severity or higher—that is, cases involving permanent significant injuries. Thus, the cap will not affect patients with minor injuries; instead, it targets only victims of injuries such as deafness, blindness, loss of limb or organ, paraplegia, or severe brain damage.(2)Since the cap makes no allowance for inflation, its arbitrary limits become more unjust as each day passes.

Caps on attorney fees. Conservatives often say that "price controls reduce supply." In H.R. 4600 they practice what they preach. By limiting attorney fees, the sponsors hope to reduce the supply of representation for victims. These price controls will almost certainly succeed—they reduce the potential rewards of litigation that already carries with it high risks in terms of the expenses attorneys must advance and the sympathy that juries have for doctors. By drastically altering the risk/reward formula, H.R. 4600 will prevent many victims from obtaining legal counsel.

Leaves patients holding the bag when a doctor is insolvent. The doctrine of joint and several liability says that when two defendants, such as a doctor and a hospital, are both found liable for negligence, a plaintiff may collect the entire award from either of them if necessary. H.R. 4600 would change this rule, and leave patients with no recovery for the share of damages assigned to an uninsured, underinsured, or bankrupt defendant.

Lets defendants control payouts for future damages. By instituting a "periodic payment rule" for future damages over $100,000, the bill would allow defendants and insurance companies to string out payments for future damages over the life expectancy of the victim, rather than have to pay up front. This is money the jury has determined rightfully belongs to the plaintiff, yet defendants and insurers would be able to invest and earn interest on the vast majority of a plaintiff’s damage award. Victims would be left to cope with unexpected needs or changing medical costs and increased transportation and housing costs. The bill would provide no protection to the victim if his or her needs change, or if the insurance company becomes insolvent.

Jury may assign collateral source benefits to the defendant. Collateral source benefits are benefits paid by the plaintiff’s health or disability insurance and programs such as Social Security Disability that are funded by payroll taxes. Everyone knows that the premiums for these benefits are effectively paid by employees through reduced salaries and wages—yet H.R. 4600 allows these benefits to be stripped from a worker and transferred to the defendant. The bill also prohibits health insurers, most notably, the insurer of last resort—taxpayers—from recouping any benefits paid out due to negligence or defective medical products.

Shortened statute of limitations to one year after discovery of the injury. This severe limitation will extinguish many meritorious claims. Although in most cases an injury is immediately apparent, a victim may not know until much later whether the injury was caused by malpractice. The law in most states starts the limitation period running from the discovery of the malpractice, not discovery of the injury.

1 Institute of Medicine, To Err is Human: Building a Safer Health System (1999) pg. 26.
2 Institute for Legislative Practice, Jury Verdicts in Medical Malpractice Cases and the MICRA Cap (1999); "Jury Awards for Medical Malpractice and Post-Verdict Adjustments of Those Awards," 48 DePaul L. Rev. 265 (1998).