Tort Law Changes Won't Reduce Malpractice Premiums

For Immediate Release: October 29, 2009

Contact: Ray De Lorenzi, American Association for Justice
202-965-3500 x369
AAJ Press Room

New Data Shows Tort Law Changes Won’t Reduce Malpractice Premiums

Insurance companies lobby to limit patients’ legal rights,
yet never pass savings onto physicians or consumers

Washington, DC—Tort law changes have failed to reduce malpractice insurance costs, and states with caps on damages often have higher premiums than states without caps, according to an analysis of just-released liability data.

While insurance companies have claimed tort law changes would lower physicians’ premiums, this has not been the case. There is either no difference in rates between cap and non-cap states, or cap states actually have higher premiums – underscoring how a state’s liability laws play no role in lowering insurance or overall health care costs. Doctors’ premiums rise and fall based on the insurance cycle, totally unrelated to the legal system.

The new data shows:
• Average liability premiums across internists, general surgeons and OB/Gyns are nearly identical for states with or without caps.
• Average liability premiums for OB/Gyns are nearly identical for states with or without caps.
• Average liability premiums for general surgeons are 9.3% higher in states with caps.
• Average liability premiums for internal medicine are 9.9% higher in states with caps.

“Malpractice insurers promised tort law changes would lower premiums, yet it has not happened,” said American Association for Justice President Anthony Tarricone. “While these companies make record profits off the backs of doctors, patients injured through no fault of their own are often unable to seek recourse. This information comes at an important time in the health care debate – providing clear evidence that tort law changes won’t decrease costs.”

The above statistics were derived from data released this month in Medical Liability Monitor. More information and charts on this data can be found at www.justice.org/clips/premiums2009.pdf.

As part of its ongoing series on the topic, AAJ earlier released Medical Negligence: A Primer for the Nation’s Health Care Debate, The Truth About “Defensive Medicine,” and The Insurance Hoax: How Doctors and Patients Pay for the Huge Earnings of Medical Malpractice Insurers, all of which can be located at www.justice.org/medicalnegligence.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

True Stories of Corporations that Knew their Products were Dangerous-- Even Deadly

The American Association for Justice released an incredible report yesterday--- They all Knew and Failed to.... The report details how lawsuits keep us safe.

Listed in the report are numerous examples of companies that knowingly and willfully released products that harmed or even killed consumers. It describes the case of a company that discovers rat droppings are contaminating its food products but insists that the products be recooked, boxed up, and sold anyway. Then there is the example of a company that discovers its bulletproof vests are defective but still sells them to law enforcement agencies and the military-- putting those that protect us at grave risk.

Toys to Toxic Waste

For Immediate Release: October 28, 2009

Contact: Jennifer Fuson
202-965-3500 x369
AAJ Press Room

Toys to Toxic Waste: New Report Details Corporations that Skirt Responsibility and Shun Consumer Safety to Save Money

Washington, DC—As the U.S. Chamber Institute for Legal Reform holds their annual summit – an event dedicated to championing corporate misconduct and evading accountability – a new report released today details true stories of corporations that knew their products were dangerous, yet failed to act and protect consumers.

“They Knew and Failed To” details numerous examples of medical devices, prescription drugs, and other consumer products that remained on the market after critical safety concerns had been raised within the company, while using all means necessary to avoid being held accountable for their misconduct.

In one example, police officer Tony Zeppetella of Oceanside, Calif. had paid $313 to “upgrade” his standard bullet proof vest. The Ultima body armor Zeppetella had purchased was widely used by law enforcement, military personnel, and even worn by the President and Mrs. Bush. Unfortunately, Zeppetella was shot and killed on a routine traffic stop in June 2003, when a bullet penetrated his vest.

Second Chance, the manufacturer, had known as early as 1998 that heat and sunlight caused the material to degrade, making the vests penetrable. Internal corporate memos from 2001 revealed an executive at the company had recommended notifying customers about the products’ defect, saying, “Lives and our credibility are at stake.” It was not until September 2003 that the company eventually recalled 130,000 vests, three months after Zeppetella was shot. The company had known for five years there were problems with their vests, but failed to notify consumers, putting law enforcement and service members’ lives at risk. Several years later, Second Chance recalled another 98,000 vests.

“While most businesses act in good faith to serve their customers and communities, unfortunately some corporations recklessly put lives at risk for the sake of profit,” said American Association for Justice President Anthony Tarricone. “While front groups like the Chamber stage events practically celebrating corporate misconduct, this new report convincingly illustrates the importance of holding wrongdoers accountable.”

The full report, “They Knew and Failed To,” is available at: www.justice.org/clips/TheyKnewAndFailedTo.pdf.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

Mom amputee after medical malpractice

From CNN:

Six years ago, shortly after arriving at the ER at Memorial Hospital West in the Fort Lauderdale suburb of Pembroke Pines, Strong says she told a nurse she thought she was having a problem with a kidney stone. She had had difficulties with stones.

But miscommunication between doctors and different diagnoses eventually led to her being discharged without having the kidney stone treated. That led to a rare tissue inflammation called "the line of demarcation," seen as a darkening of the skin in the extremities that slowly creeps upward.

"My fingers were turning black and curling. They looked charred," she said. "My toes were turning blue and black. It wouldn't stop. I had no idea what was happening to me," she recalled.

Strong said she was told she had no choice but to have her arms and legs amputated to save her life.

AAJ Women's Caucus Reception

AAJ announces their Women's Caucus Networking Reception on Thursday, October 29th in Washington DC.

Hot Coffee the movie

Join us tomorrow night at the LandMark Theaters in Midtown for a screening of the documentary Hot Coffee. Contact Rebecca DeHart for more information.

From the website www.hotcoffeethemovie.com:


What’s the most famous legal case in American history?

Marbury v. Madison, Brown v. Board of Education, Roe v. Wade? Ask anyone in the U.S. or abroad and they will likely tell you about a woman who spilled coffee on herself and collected millions of dollars. The McDonald’s coffee case became the poster child for frivolous lawsuits in America. Jerry Seinfeld did an entire episode where Kramer sued Java World after spilling a café latté on himself while trying to get a seat in a movie theater. Jay Leno, David Letterman and other comedians have made the case the punch line for jokes; there are even the “Stella Awards” (for Stella Liebeck), given each year to the most outrageous and frivolous lawsuits. But if this case was so ridiculous, why did a jury award $2.9 million dollars to this 79 year old after a seven-day trial in 1994? Did McDonald’s not have good lawyers? And how did this case gain such notoriety and remain in the minds of so many people after so many years?

The McDonald’s coffee case has been routinely cited by the media as an example of how citizens have taken advantage of the legal system. In this documentary, you will learn what really happened to Stella, meet her grandson, who was driving the car, and hear from her doctor, the lawyers, McDonald’s quality assurance manager, and the jurors. Was the media’s portrayal of this case fair or was there an agenda by tort-reform groups to create a public perception that lawsuits were out of control. How did it become the poster child for tort reform, what is tort reform and how does it affect everyday Americans?

We will show how this case became so popular in the media (along with other examples of “frivolous” lawsuits), who funded the effort and to what end. We will interview political scientists, law school professors and consumer advocates who have spent years analyzing media coverage of the tort system and who controlled the message. We will show how the media was used and continues to be used for a political agenda to prevent access to the court system and immunize corporations from civil liability. We will educate the audience about caps on the amount of money that victims can receive in court in most states, how the federal government has enacted laws to prevent people from their day in court, and how the small print on credit card and real estate contracts, for example, prevent people from being able to get into the court system, denying access to justice. We will explore judicial races in states where tort reform measures have passed and then were later found unconstitutional by the State’s Supreme Courts. In many of these states there were major public relations campaigns established by tort reform groups to unseat pro-consumer justices and replace them with pro-business justices. We will interview representatives from the American Tort Reform Association, the U.S. Chamber of Commerce (who even recently started a new website called “Faces of Lawsuit Abuse”) and even Phillip Morris, to find out what their involvement was in keeping this story alive and the motivations behind it.

We will let the audience decide who really profited from spilling hot coffee.

Medical malpractice insurers earning more than ever

For Immediate Release: October 6, 2009

Contact: Ray De Lorenzi, American Association for Justice
202-965-3500 x369
AAJ Press Room

Medical Malpractice Insurers Earning More Than Ever

10 biggest malpractice insurers have average profits
higher than 99% of Fortune 500 companies

Washington, DC—As Congress debates nationwide health care reform, a new analysis reveals malpractice insurers have long-played a cruel hoax on legislators and the public. By systematically distorting profits and losses, insurers created phony “financial crises,” so lawmakers would limit the legal rights of injured patients. Today, while premiums and health care costs skyrocket, malpractice insurers have average profits higher than 99 percent of Fortune 500 companies.

The key findings of the report, which analyzes the annual financial statements of the 10 largest U.S. medical malpractice insurers, include:

• The average profit of these insurance companies is higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period.
• Malpractice insurers have seen their profit margins range from 5.9 percent to 74.8 percent, with an average of 31.2 percent.

Medical malpractice insurers have underestimated profits and overestimated losses, creating overblown insurance “crises” to garner support for limiting patients’ legal rights. Then years later after the “crises” abated, revised filings show the companies were never in the financial peril they claimed.

• After overestimating losses, insurers have since reported that losses over the last five years have been approximately 13.5 percent lower than initially reported.
• By overestimating losses, companies have underestimated profits. Insurers averaged about 5.1 percent higher profits last year and 12.4 percent higher profits two years ago; these levels of profits will likely rise as upward revisions are made.
• Medical negligence laws were passed under false pretenses. Overblown reported losses were used by the insurance industry to justify new measures restricting the rights of those injured by medical negligence.

“Insurance companies are gouging doctors on their premiums to mislead lawmakers. And today, injured patients are often left with no avenue to pursue justice, while health care costs continue to skyrocketing,” said American Association for Justice President Anthony Tarricone, managing partner at Kreindler & Kreindler LLP.

“As Congress looks to overhaul our nation’s health care system, it’s clear that limiting the legal rights of patients won’t lower health care costs or cover the uninsured,” continued Tarricone. “The focus should be on eliminating medical errors that injure or kill tens of thousands of Americans every year. Insurance companies clearly don’t need another handout.”

As part of its ongoing series on the topic, AAJ earlier released Medical Negligence: A Primer for the Nation’s Health Care Debate and The Truth About “Defensive Medicine.” These reports, as well as The Insurance Hoax: How Doctors and Patients Pay for the Huge Earnings of Medical Malpractice Insurers, can be located at www.justice.org/medicalnegligence.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

New Ad Campaign Tells Congress to "Put Patients First"

For Immediate Release: September 22, 2009

Contact: Ray De Lorenzi, American Association for Justice
202-965-3500 x369
AAJ Press Room

New AAJ Ad Campaign Tells Congress: “Put Patients First”

Calls On Congress to Improve Health Care by Reducing 98,000 Annual Deaths from Preventable Medical Errors - Like Two 727s Crashing Every Day for an Entire Year

Washington, DC—The American Association for Justice (AAJ) today launched the first phase of a nationwide ad campaign to educate lawmakers about the epidemic of preventable medical errors and how tort law changes won’t lower costs or cover the uninsured. The ads are running in opinion-leading Washington publications and influential online news sites.

According to the Institute of Medicine, 98,000 people are killed annually by preventable medical errors. “That’s like two 737s crashing every day for a whole year,” says the ad, which will initially run in Beltway publications and web sites nationwide. The ad concludes by posing the rhetorical question, “Would we blame the passengers or the airlines?”

“Our health care system is clearly broken, and if we are serious about improving it, we need to fix preventable medical errors,” said AAJ President Anthony Tarricone. “This new ad campaign gives Congress 98,000 reasons why they should put patients’ health first – before the profits of insurance companies. If we work to improve our health care system and reduce medical errors – rather than strip people of their rights – there would be far fewer victims that need legal recourse.”

The ads are an extension of AAJ’s efforts to improve the nation’s health care system by addressing preventable medical errors instead of trying to take away long-established Constitutional rights.

The Government Accountability Office and Congressional Budget Office have both said taking away patients’ rights will not significantly lower health care costs and found no evidence of so-called “defensive medicine.” Nonetheless, the insurance industry, political opponents of reform and others members of the health care industrial complex have continued to use patients’ rights as bargaining chips during this debate.

“Americans deserve health care reform that will actually fix our broken system, not force them to give up their legal rights,” said Tarricone. “Let’s focus on preventing errors in the first place, not targeting those injured through no fault of their own.”

To learn more about AAJ’s ad campaign and the role of medical negligence in the health care debate, visit www.98000reasons.org.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

Caps undermine accountability and don’t deliver cost savings.

GTLA member and Communications Committee Chairman Andy Childers wrote the following piece appearing in the AJC today:

Caps undermine accountability and don’t deliver cost savings.

By C. Andrew Childers

We’ve been told for so long that lawsuits and large jury verdicts are the reason for our excessive health care costs that, despite the absence of any factual basis for such an allegation, some still think it’s true.

Supporters of so-called tort reform claim that the threat of lawsuits forces doctors to order unnecessary or excessive tests and procedures to protect themselves — a phenomenon they call “defensive medicine.”

In reality, both the Congressional Budget Office and the Government Accountability Office under President George W. Bush cast serious doubts as to whether defensive medicine even exists.

The town of McAllen, Texas, may illustrate this point best, as it is the home of the most expensive health care in the nation. Despite having caps on damages an injured victim may recover, doctors in McAllen still routinely order excessive testing and procedures. They don’t do so out of fear of lawsuits — Texas law already immunizes them.

They do so because the fee-for-service structure set up by the health insurance industry actually encourages doctors to order them. The more tests and procedures doctors perform, the more they get paid. After Texas capped damages, allowing negligent doctors to harm patients without the fear of lawsuits, the number of medical malpractice complaints to the Texas State Medical Board actually rose from 2,942 to 6,000 in just one year.

During the debate over reforming our health care system, tort reform — and more specifically, caps on damages a victim may recover no matter how badly he or she is injured — has been slyly added to the mix by the those out to derail health care reform at any cost. The facts prove that placing arbitrary limits on medical negligence verdicts would have little or no impact on the overall costs of health care.

The New England Journal of Medicine published a study concluding that “portraits of a malpractice system that is stricken with frivolous litigation are overblown.” The National Bureau of Economic Research found that tort reform laws do not avert physician shortages nor do they lead to better patient care.

Data from the American Medical Association shows that the number of practicing physicians has actually been increasing across the board for many years. And the number of physicians is significantly higher in states without caps on damages.

In most states, malpractice premiums have continued to go up, while the number of malpractice claims filed has remained stable or has gone down. Less than 1 percent of all civil cases are malpractice cases, and 48 states already have malpractice limits. And yet, the cost of health care continues to skyrocket.

In the U.S., preventable medical errors are the leading cause of accidental death — and the sixth leading cause of death. A study by the Institute of Medicine found that 98,000 Americans die each year as a result of this preventable negligence. Just 6 percent of doctors are responsible for nearly 60 percent of negligent care — and the courts are the only effective means of holding them accountable. But capping damages a victim may recover undermines this accountability.

Our forefathers devised a fair and just way for citizens to seek justice when someone harms them — through a trial before a jury. They didn’t believe that government should predetermine the outcome of a trial by limiting how juries assess individual cases. Taking away patient rights — by capping damages and limiting their 7th Amendment right to trial by jury — does not improve the quality of our health care system or produce cost savings. Health care reform should be about making sure that every American has access to quality, low-cost health care, not about limiting the constitutional rights of innocent patients harmed by preventable medical negligence.

C. Andrew Childers, an attorney with Childers & Schlueter, is a member of the Georgia Trial Lawyers Association.

Editorial in the Marietta Daily Journal

Joe Kirby, Editorial Page Editor of the Marietta Daily Journal pens a great column:

No Miracle Cure
by Joe Kirby
Columnist
September 20, 2009 01:00 AM

Let's say you go to the doctor or surgeon for what is supposed to be a routine procedure, like a colonoscopy or facelift. But thanks to the doctor's or hospital's negligence or ineptitude, the outcome is anything but routine. For a Marietta woman whose case was heard last week by the Georgia Supreme Court, the outcome was horribly disfiguring facial scars - scars so severe her lawyers describe the photographs of them as too gruesome for public distribution.

"Too bad," say tort reform-minded lawmakers around the country about the victims in such cases.

They are pushing to put caps on damage awards in malpractice lawsuits brought in the wake of such cases. In fact, the Georgia Legislature already imposed such caps back in 2005 shortly after the Republicans took control of that body for the first time in more than a century. They capped "pain and suffering" awards (as opposed to economic damage awards) at just $350,000.

I'm sure that $350,000 is more than enough to ease the pain of a mangled face. Aren't you?

And what about the case of an unfortunate Fulton County infant, who, thanks to a botched circumcision in 2004, will go through life missing a third of his penis? I'm sure that every last one of the males reading this column feels that $350,000 would be more than adequate compensation for spending the rest of their life missing a third of his penis. Especially any tort reform-minded congressmen or state legislators, apparently.

Many tort reformers in Georgia and around the country are enamored with the notion that malpractice reform should be the cornerstone of any effort to improve the nation's health care system. They want to make it much harder to pursue meritorious medical malpractice lawsuits and want to cap awards at ridiculously low levels in order to try to dissuade people from filing them, and attorneys from taking them.

The 2005 Georgia General Assembly was on the cutting edge of med-mal reform back in '05, you might say. The law it passed, with its $350,000 cap on non-economic damages, is so severe - so hard-hearted - that if your stay-at-home spouse, or your young child (i.e., anyone who is not employed or who lacks an earnings history), is inadvertently killed or maimed for life by a doctor, the most the plaintiff can hope to ever recover via a jury trial is that $350,000.

The state Supreme Court last week heard arguments in the case brought by Betty Nestlehutt, now 75, of Marietta, whose doctor inadvertently shut off nearly all of the flow of blood to the skin of her face during plastic surgery, causing gaping wounds to later open up across the lower half of her face as the skin died.

After hearing all the evidence, the 12-person jury found her pain and suffering damages were worth $900,000. Her doctor's lawyer argues that that amount should be automatically reduced to $350,000. The Supreme Court must decide on the constitutionality of the caps - that is, whether, as Justice Carol Hunstein wondered aloud last week, the caps have turned the right to trial by jury into a "hollow right."

Tort reform advocates argue that soaring malpractice insurance fees are driving doctors out of Georgia and into retirement; hence the need for the caps. Yet in Georgia, doctors are not required to even carry malpractice insurance. All I know is that the phone book is still overflowing with listings for doctors - just as it was before the awards were capped - and that WellStar Kennestone Hospital's "footprint" atop the hill on Church Street keeps getting bigger and bigger.

Those pushing for med-mal reform like to portray it as "jackpot justice." And yes, there have been abuses, such as John Edwards' shamelessly over-the-top - and eventually extremely lucrative - summations to juries in a string of lawsuits on behalf of babies who he claimed suffered cerebral palsy because their doctors failed to perform Caesarian deliveries.

And Republicans also argue, credibly I think, that the fear of lawsuits has caused doctors to practice "defensive medicine" - ordering multitudes of expensive but often unnecessary tests, mostly for "CYA" reasons in case they are later sued.

Yes, we should be very wary of the pitfalls of Obamacare, but be ware as well of tort reformers' claims that malpractice reform is the miracle cure that will, almost by itself, cure all that ails the country's medical system.

There has to be a better way of protecting doctors from frivolous lawsuits than by the kind of arbitrary, one-size-fits-all jury-award caps passed by the Georgia General Assembly. Those caps have nothing to do with the evidence of the case and serve only to hurt catastrophically injured patients whose claims have already passed muster by a judge and jury.

If you don't believe me, just ask Ms. Nestlehutt - or wait a few years, and ask that poor kid from Fulton County.

Joe Kirby is Editorial Page Editor of the Marietta Daily Journal and author of "The Bell Bomber Plant."