JIM LEHRER: The malpractice story: Susan Dentzer of our health unit begins with this report on the day's events. The unit is a partnership with the Henry J. Kaiser Family Foundation.
SUSAN DENTZER: President Bush traveled to southern Illinois today to blast what he called a medical liability crisis, and tout his prescriptions for sweeping legal reforms.
PRESIDENT GEORGE W. BUSH: Lawyers are filing baseless suits against hospitals and doctors. That's just a plain fact. And they're doing it for a simple reason: They know the medical liability system is tilted in their favor. Jury awards in medical liability cases have skyrocketed in recent years. It's a system that is just not fair, it is costly for the doctors, it's costly for small businesses, it's costly for hospitals; it is really costly for patients.
SUSAN DENTZER: The president described Illinois's Madison County, where he spoke, as an epicenter of the crisis due to aggressive local attorneys and courts.
PRESIDENT GEORGE W. BUSH: Over the past two years, the liability crisis has forced out about 160 physicians in Madison and St. Clair Counties alone. When doctors move or close their practices guess who suffers? The patients. The people who live in these good towns in this part of the world.
Pregnant women have to travel longer distances for checkups, accident victims lose critical minutes in transit to far away emergency rooms. New residents, people you're trying to get to come and live in your communities have a hard time finding doctors willing to accept extra patients. And that causes the quality of life in your community to deteriorate.
SUSAN DENTZER: The president called on Congress to enact legislative reforms that would create new federal standards for medical liability cases; those traditionally have been governed by state law. The legislation the president has previously backed includes tight limits on the fees that can be charged by plaintiffs' attorneys, and a $250,000 cap on so-called "non-economic damages," those are compensation for pain and suffering awarded in a given malpractice case.
PRESIDENT GEORGE W. BUSH: Caps on non-economic damages work. It's a good idea. And the Congress ought to adopt them.
SUSAN DENTZER: The president's preferred reform legislation also includes limits on so-called punitive damages, aimed at punishing doctors or hospitals in especially egregious malpractice cases. These would be capped at whatever number is greater: $250,000, or twice the amount of so-called economic damages awarded for medical costs and lost wages.
And for lawsuits involving medical devices and prescription drugs, punitive damages would be prohibited altogether. That would especially benefit pharmaceutical manufacturers like Merck. The company now faces a multibillion-dollar legal liability over its formerly best-selling painkiller, Vioxx, it's off the market now due to heightened risks of heart attacks and strokes.
This week, the nation's premier group of trial lawyers charged the president with manufacturing a fake malpractice crisis. And an advocacy group, U.S. Action, aired this anti- reform commercial, featuring a Wisconsin malpractice victim, Linda McDougal.
LINDA McDOUGAL (ad): You may have seen the ads attacking lawyers. It wasn't lawyers who switched my test, told me I had cancer and amputated both of my breasts. I will never be the same. President Bush, I'm former military. Why are you trying to take away my rights?
SUSAN DENTZER: Following the president's speech today, Republican leaders in Congress said they would take up medical liability reform soon.
GWEN IFILL: Now, two views on the reasons behind soaring medical costs. Dr. Robert Hamilton, the past president of the Madison County Medical Society, attended the president's speech today. He retired three years ago, in part, he says, because of rising malpractice premiums.
And Joanne Doroshow is the executive director of the Center for Justice and Democracy, a consumer advocacy group. They oppose President Bush's plan.
Dr. Hamilton, the president said today that the medical liability system is tilted in favor of lawyers, he called it defensive medicine. Has that been your experience?
DR. ROBERT HAMILTON: Well, because of the high risk of being sued for anything that could possibly go wrong, many of us in fact all of us are practicing defensive medicine all the time. And it's become so ingrained that many of the things that we are doing today that we think we have to do, I'm sure that subconsciously we don't even stop to think that really what we're doing is practicing defensive medicine, and the cost of that is extremely high, and is mostly unnecessary.
GWEN IFILL: Ms. Doroshow, how high is the risk and how high is the cost?
JOANNE DOROSHOW: Well, there's an awful lot of malpractice, sadly, that goes on in hospitals, up to 98,000 people die every year in hospitals due to medical errors and that's just the people that die. There are hundreds of thousands of injuries.
The White House yesterday released a report that it had commissioned, which basically says that it's incompetent doctors, a small number of incompetent doctors, that are responsible for most of the malpractice and if those doctors were simply weeded out of the system, not only would malpractice -- incidents of malpractice be significantly reduced, but lawsuits would come down too. So there are ways of dealing with this problem without taking away the rights of patients.
GWEN IFILL: Dr. Hamilton let's talk about those root causes that Ms. Doroshow alluded to. Are we talking about a small percentage of doctors who are not practicing the profession as well as they could be? Or are we talking about a small percentage or a large percentage of very litigious patients who are just waiting for an opportunity to sue you?
DR. ROBERT HAMILTON: Well, I think it's a small number of patients who are waiting for an opportunity to sue. And this is fomented by an aggressive plaintiffs' bar of attorneys. As far as who gets sued, I think you have to look at who is paying the most malpractice premiums; malpractice premiums are assessed on the basis of risks.
Who pays the highest premiums: Neurosurgeons, obstetricians, anesthesiologists, orthopedists, general surgeons, vascular surgeons, people who do the most high-risk procedures, these are the people that are being sued most often -- not the incompetent.
The incompetent physician often finds a way to skirt about, around the more difficult cases, and they really, there are occasional cases that, where it's the incompetent physician who's part of the problem, but the most serious risks are those assumed by the best physicians and the most highly-trained.
GWEN IFILL: Ms. Doroshow, if as you have argued, this is actually a phony crisis, then how is it that in Madison County and St. Clair County where Dr. Hamilton practiced, that the president said I think today that there were 160 physicians who left the practice in the last, or moved away in the last year or so, in order to avoid these kinds of premiums?
JOANNE DOROSHOW: Well, we're not saying that there is no crisis. The crisis is with the insurance companies, the insurance rates that they're charging doctors, the excessive rates. It just so happens that Illinois has the weakest insurance regulation of any state in the country.
The only way you're going to solve that problem, bring down rates for all doctors, including the specialists, is to get control over the insurance industry through certain reforms that other states like California have enacted. Caps on damages don't work; they don't help doctors in terms of bringing down their insurance rates.
Time and time again states that have tried to do that have only seen their rates go up. So we strongly advocate regulation, strong regulation of the insurance industry is really the only solution to help doctors in this situation.
GWEN IFILL: Dr. Hamilton, why don't you respond to that, not only the question about regulation of the insurance industry but also about whether capping malpractice awards is the solution.
DR. ROBERT HAMILTON: Yes. If the problem were the insurance companies taking advantage of the physicians and of the patients, then I have to ask: why did almost all of the insurance companies leave this area?
They left this area because the risk of being sued, the number of suits being filed, the high awards being given and the high settlements required to keep these cases out of court, where we would have to face judges most of whom are heavily, heavily favor the trial attorneys, the plaintiffs attorneys, why did all of these companies leave? I think the answer is obvious.
They're in business. They can't make a profit in this, in an area like this. This isn't just Madison and St. Clair County where we've lost over 160 physicians. We lost four in Alton last week. It's all over the country. Chicago is not far behind us, as are several other counties in Illinois. Illinois is not the worst state in regard to malpractice risk.
GWEN IFILL: And how does capping the malpractice award judgments or ability, how does that solve the problem?
DR. ROBERT HAMILTON: Well, as President Bush explained so well today, none of us, I don't know of a soul who doesn't feel that if a person sustains say a $2 million injury, and that's the amount that it's going to cost to repair the injury to sustain them through any further loss of income, those kinds of things, people should receive full compensation for that.
It's the non-economic awards that have become astronomical. And, for example, a $5 million verdict, an estimate on a neurologically damaged child, when they added in the non-economic awards, turned into a $20 million award. That's the kind of thing that's going on.
GWEN IFILL: Let me ask Ms. Doroshow. Let me ask Ms. Doroshow to respond to that; that does sound like a lot of money.
JOANNE DOROSHOW: Well, look, the cap that's being proposed is $250,000 to take care of a child, a brain-damaged child in a wheelchair for the rest of his or her life. And by the way, that's the same amount of money that Bush is asking his fat cat donors and friends to pay at a party with him on inauguration weekend.
This is an extremely low level that would be catastrophic for brain-damaged children and their families that are trying to take care of these children for the rest of their life. It's not anywhere near sufficient amount of money, and what you don't want is some politician in Washington telling a local judge or jury who listens to the evidence in a case, is the only one who hears it, what a child in that situation needs to be compensated for, for the rest of their life.
GWEN IFILL: Dr. Hamilton why does this have to be a federal case?
DR. ROBERT HAMILTON: May I say first of all that completely misses the point. That child is not going to receive $250,000. They would receive $5 million or 7 million or whatever the estimate was going to be of economic need in the future, plus $250,000 economic award - non-economic award.
Now, why does it need to be federal law? We have six states in the United States who have passed effective malpractice or tort reform. California, New Mexico, Colorado, Louisiana, Wisconsin, and Indiana. The rest of the states are in varying degrees of crisis. This is something that affects every state.
It's a situation that was addressed, ironically, by James Madison in the 51st essay of the Federalist Papers in which he explains that the structure of government should be such that when injustice exists at a lower level of government, there must be redress at a higher level of government.
In states that have legislatures and governors and Supreme Courts who are heavily biased towards the plaintiffs' bar, it's impossible to get relief and yet those people in that state need care just as in the other states that's what's happening in our area.
GWEN IFILL: Let me allow Ms. Doroshow to respond to that.
JOANNE DOROSHOW: Now, there's absolutely no reason for the federal government to be involved in this. In fact, this is a massive intrusion into state power, with Congress telling local judges and juries what to do. It's incredibly hypocritical for anybody who supports states' rights to be supporting this kind of legislation.
But the main thing is that the solutions being proposed here, to take patients' rights away when the real issue here is an insurance industry out of control, an insurance industry that made more money last year than ever in its entire history, that is virtually unregulated in most every state, that's the culprit, that's what Congress or the states need to look at. Doctors can have, can focus on patients and legislatures can cap damages all they want.
It's not going to help doctors; it's not going to bring down the rates. The only way to do that is focusing on the insurance industry.
GWEN IFILL: Joanne Doroshow and Robert Hamilton, thank you both very much.