Evidence increasingly supports the medical profession’s claims that the increasing costs of litigation and threats of outrageous verdicts are contributing to a shortage of specialists in areas such as obstetrics and neurology. Obstructionist Tactics Only Strengthen the Case for Medical
Malpractice Reform

For the third time in the past year, Senate Democrats last week successfully filibustered an attempt to bring medical malpractice reform legislation to a vote. But apparently the obvious refusal of these senators to even consider the issue is not enough for some reform opponents, who are calling yet again for Senate Majority Leader Bill Frist (R-Tenn.) to recuse himself from voting on any bills affecting the healthcare industry.

The California-based Foundation for Taxpayer and Consumer Rights sent a letter last week to the Senate Select Committee on Ethics requesting an investigation into Frist’s financial connections to the healthcare industry. Senator Frist, the only medical doctor in the Senate, has for many years held a sizable investment in the hospital chain HCA, which was founded by his brother and father and wholly owns subsidiary malpractice insurer Health Care Indemnity (HCI).

There’s nothing new about this conflict of interest allegation. Voters have known about the connection ever since the Majority Leader’s Democratic opponent took every opportunity to criticize his investment ties during the doctor’s first Senate bid in 1994. Upon Frist’s election to Senate, the ethics committee informed him there was no conflict because neither he nor any of his immediate family members owned a controlling interest in any healthcare company. Frist nonetheless took the precautionary step of placing all his holdings in a blind trust to avoid even the mere appearance of impropriety.

The Senate Ethics Committee remains perfectly aware of the alleged conflict and has repeatedly determined that it does not exist; voters remain perfectly aware of Majority Leader Frist’s ties to the healthcare industry and have repeatedly elected him anyway.

During his tenure as senator, Frist’s holdings in HCA have remained substantially the same and are publicly disclosed, so little is likely to come of the Foundation’s complaint. But the repeated allegation and the Senate’s continued obstructionist tactics provide a more telling insight — that opponents know medical malpractice reform could have a real impact.

As the Foundation pointed out in its letter to the ethics committee, the proposed legislation might financially benefit both hospitals and their insurers, i.e., it might do exactly what it is intended to do. Evidence increasingly supports the medical profession’s claims that the increasing costs of litigation and threats of outrageous verdicts are contributing to a shortage of specialists in areas such as obstetrics and neurology. By freeing up hospital funds and decreasing the threat of litigation against these specialists, bills like last week’s proposed legislation could provide an effective incentive for doctors to continue to practice these specialties and for hospitals to continue employing such specialists at sufficient levels.

Ethics complaints and filibusters aren’t the only diversionary tactics employed in the battle against medical malpractice reform. Opponents commonly argue that caps on recovery hurt patients who stand to lose the most — such as the permanently disabled or infants injured at birth — through costs of ongoing medical care and inability to earn a future living. This argument is wholly without merit, though, given that the proposed $250,000 cap would only apply to non-economic damages, namely pain and suffering. Thus, juries would face no limits when awarding damages in categories including ongoing medical expenses, past and future earnings loss, cost of obtaining domestic services, and loss of business or employment opportunities.

Opponents are often also quick to notice but slow to point out to the public that any caps initiated by state legislation — whether higher or lower — will preempt the federal caps. So if enough trial lawyers can convince their state to pass a bill with a higher damages cap than $250,000, plaintiffs can continue to recover at whatever amount that state deems appropriate. Further, states would then remain free to determine whether insurance regulation or malpractice caps are a more effective way to curb their own costs of expanding litigation.

Despite being one of the most vocal groups in opposition to most reform efforts, trial lawyers also have little to say about their conflict of interest — the plaintiffs’ bar certainly would fare better financially without the limits on attorneys’ fees that medical malpractice reform would impose. As the Wall Street Journal pointed out regarding the conflict claim against Frist, the Foundation for Taxpayer and Consumer Rights is in a somewhat precarious position as an advocate for "consumer rights" given that its own founder is a lawyer.

The most revealing statement in the Foundation’s complaint is its accusation that "Frist’s current involvement in the medical malpractice debate rises beyond the level of general concern for health issues." That’s exactly what makes Majority Leader Frist and the reform advocates so dangerous: not only have they identified a real problem, but they have taken the extraordinary measure of actually creating legislation that, while probably not a permanent solution, at least takes a step in the right direction. Nothing could be more threatening.

April 15, 2004
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