Medical Liability as a Campaign Issue

KWAME HOLMAN:

John Kerry worked to build his support among women during a campaign stop at the University of Wisconsin in Milwaukee this morning. After an introduction by Caroline Kennedy Schlossberg, the daughter of the late president, Sen. Kerry charged the Bush White House has turned its back on working women.

SEN. JOHN KERRY:

Everywhere I go, I meet women working two jobs, three jobs, just to get by. And the jobs that are replacing the jobs that are going overseas are jobs that are either part- time or jobs without benefits, and that's only the jobs that they're paid for. No one in the White House seems to be listening. The women I meet, they don't expect the government to do their jobs for them, but they do want leaders who are on their side as they try to do their jobs. We believe that the middle class is the backbone of this country and that hard-working women are the bedrock of our families in America. We believe that women deserve more than false assurances and empty promises from their president.

SEN. JOHN KERRY:

Sen. Kerry said he would boost the minimum wage, improve education and expand health care to help women struggling to care for their families, all issues polls show are important to women. Meanwhile, President Bush campaigned through two battleground states today. His first stop was a rally in Wilkes-Barre, Pennsylvania.

PRESIDENT GEORGE W. BUSH:

Thank you all for coming.

KWAME HOLMAN:

And this afternoon in Canton, Ohio, the president argued the need for medical liability reform, which he has called for repeatedly during the campaign.

PRESIDENT GEORGE W. BUSH:

The difference between some lawyers and personal injury trial lawyers. They're constantly out there trying to convert this legal system into what looks like a lottery. Guess who ends up paying for the ticket? The taxpayers and the people because the quality of health care is going down; if you've got a lawsuit or you think you're going to get sued, you're going to practice more medicine than is needed so you can defend yourself in a court of law. Secondly, because of the lawsuits, because many people just settle whether the suit has merit or not, premiums go up. And guess who pays the premiums? You do. And thirdly as a result of a lot of these lawsuits, people simply can't practice medicine anymore. This country needs medical liability reform now.

KWAME HOLMAN:

Medical liability reform also was a key issue during the recent debates. Norma-Jean Laurent brought it up during the town hall meeting in St. Louis.

NORMA-JEAN LAURENT:

Sen. Kerry, you've stated your concern for the rising cost of health care. Yet you chose a vice presidential candidate who has made millions of dollars successfully suing medical professionals. How do you reconcile this with the voters?

SEN. JOHN KERRY:

Very easily. John Edwards is the author of the patients' bill of rights. He wanted to give people rights. John Edwards and I support tort reform. We both believe that, as lawyers… I'm a lawyer, too. And I believe that we will be able to get a fix that has eluded everybody else because we know how to do it. Now, ladies and gentlemen, it's important to understand, the president and his friends try to make a big deal out of it. Is it a problem? Yes, it's a problem. Do we need to fix it, particularly for ob-gyns and for brain surgeons and others? Yes. But it's less than 1 percent of the total cost of health care.

PRESIDENT GEORGE W. BUSH:

He says that medical liability costs only cause a 1 percent increase. That shows a lack of understanding. Doctors practice defensive medicine because of all the frivolous lawsuits that cost our government $28 billion a year.

DEBATE MODERATOR:

Sen. Kerry, we got several questions along this line, and I'm just curious if you'd go further on what you talked about with tort reform. Would you be favoring capping awards on pain and suffering? Would you limit attorneys' fees?

SEN. JOHN KERRY:

A follow-up.

DEBATE MODERATOR:

Yes, a follow-up on this for…

SEN. JOHN KERRY:

Yes, I think we should look at the punitive and we should have some limitations.

PRESIDENT GEORGE W. BUSH:

You're now for capping punitive damages? That's odd. You should have shown up on the floor in the Senate and voted for it then. We passed it out of the House of Representatives. Guess where it's stuck? It's stuck in the Senate because the trial lawyers won't act on it. And he put a trial lawyer on the ticket.

KWAME HOLMAN:

That trial lawyer, of course, is Sen. John Edwards. And during his debate with Vice President Cheney in Cleveland, they took turns responding the question from our own Gwen Ifill.

GWEN IFILL:

Are you willing to say that John Edwards, sitting here, has been part of the problem?

( Laughter VICE PRESIDENT DICK CHENEY: Well, Gwen…

GWEN IFILL:

Mr. Vice President? (Laughter)

VICE PRESIDENT DICK CHENEY:

First of all, I'm not familiar with his cases. My concern is specifically with what's happened to our medical care system because of rising malpractice insurance rates, because we failed to adequately reform our medical liability structure. Now, specifically, what we need to do is cap non-economic damages, and we also think you need to limit the awards that the trial attorneys take out of all of this. Over 50 percent of the settlements go to the attorneys and for administrative overhead.

SEN. JOHN EDWARDS:

We do have too many lawsuits, and the reality is there's something that we can do about it. John Kerry and I have a plan to do something about it. We want to put more responsibility on the lawyers to require, before a case, malpractice, which the vice president just spoke about; have the case reviewed by independent experts to determine if the case is serious and meritorious before it can be filed; hold the lawyers responsible for that, certify that and hold the lawyer financially responsible if they don't do it; have a three- strikes-and-you're-out rule so that a lawyer who files three of these cases without meeting this requirement loses their right to file these cases. That way we keep the cases out of the system that don't belong in the system.

KWAME HOLMAN:

And as to the Bush campaign's constant reminder that Edwards once was a successful trial lawyer, the senator said he was proud of the work he did on behalf of children and families against big insurance and drug companies and big HMO's.

JIM LEHRER:

Margaret Warner looks further at the medical liability issue.

MARGARET WARNER:

Warner: As we just saw, medical liability is a big issue on the campaign trail. But how significant a problem is it? And which candidate has the better proposal to deal with it? We get two perspectives. Frank Sloan is a professor of health policy and economics at Duke University; and Philip Howard is a lawyer, and chairman of Common Good, a bipartisan coalition working for liability reform. Neither man is affiliated with either presidential campaign.

All right, gentlemen, let's start with the issue that they had a big argument about in their second debate, which is the cost which is the cost of medical liability lawsuits. Let me begin with Professor Sloan. We heard President Bush say it's a major factor driving health care costs. It's $28 billion to the government and in another debate he said it could be $160 billion total cost. Sen. Kerry said it is less than 1 percent. Who is right?

FRANK SLOAN:

In terms of premium, Sen. Kerry is right. What is paid in premiums at least historically has been 1 percent. Then you have this defensive medicine factor. But the problem is defensive medicine is very hard to define. There is no operational definition of defensive medicine. Is defensive medicine talking more to patients? Is defensive medicine ordering an additional test? Those tests may have some benefit. If they had absolutely no benefit, they wouldn't be any value in the courtroom.

MARGARET WARNER:

All right. And, Mr. Howard, your view on the cost; is it a hard thing to get a handle on?

PHILIP HOWARD:

It is a hard thing to get a handle on but not hard to understand that it has dramatically increased the cost. We commissioned a poll a couple years ago where four out of five doctors said they regularly ordered tests they did not think were necessary. If you visit any hospital and talk to administrators or doctors, you'll get a litany of the way they practice that drives up the cost of health care and it's a lot more than the total amount of the premiums.

MARGARET WARNER:

Back to you, Professor, is that really where the distinction lies here, whether you are talking about the cost of premiums and perhaps jury awards verses the costs that permeate the system throughout?

FRANK SLOAN:

These kinds of surveys of doctors are not very convincing. It doesn't mean that the doctors never ordered a test or maybe even the doctor has frequently ordered a test but we don't have any idea what the dollar value of what those tests are. The other thing is the income goes to the doctors. Tests are very profitable. If we did reduce a number of tests, it would cause a dramatic drop in physician income.

MARGARET WARNER:

Mr. Howard.

PHILIP HOWARD:

Well, I would agree there are mixed motives and this needs further study but there has been a lot of work that has gone into it and even though it is hard to quantify the pervasive sense of medicine is a reality. And, again, all you have to do is go to the hospital. Another thing we don't have discussion is the whole idea of cost containment. There is no discussion about the ethics of the end of life. A huge amount of money is spent there, often in inhumane ways when people are sent from a nursing home to an emergency care unit when they're about to die; very expensive, and you can't fix that without a reliable system of justice that people trust.

MARGARET WARNER:

All right. Let's stick with medical liability since this is the issue on the campaign trail. I'll stay with you, Mr. Howard. What effect does the fact of these lawsuits have on the quality of medicine? Advocates clearly say it keeps doctors and hospitals accountable.

PHILIP HOWARD:

Well, a system of justice should keep doctors accountable if it were reliable to distinguish ten mistakes and claims that don't involve doctors but the studies by the Institute of Medicine and the Harvard School of Public Health and others have demonstrated that distrust of the justice is causing thousands perhaps even more unnecessary errors constantly because doctors so distrust justice that they're afraid to be candid with each other so they don't say things like gee, are you sure that's the right prescription or right dosage or the like?

MARGARET WARNER:

Professor, is that happening? That it is having a counter effect?

FRANK SLOAN:

Well, I've reviewed the same studies and I just don't read them that way. I think that's maybe over interpreting what the studies show. In fat, there are studies that show there are many medical errors in the system. The problem is not so much that there is no error because there are errors. The question is the extent to which the tort system lowers errors. But clearly will are errors out there and, you know, so it's not like we don't have a problem and it's not just liability. We have many other problems with the health care system.

MARGARET WARNER:

All right. Let's go to the two men's proposals and I'll start with you, Mr. Howard. Let's talk about the question of damages. Neither man is proposing capping economic damages; that is, if were you damages by bad medical care but President Bush would cap non-economic damages, that is, pain and suffering at $250,000. Mr. Kerry would not. What is your view of the impact would have?

PHILIP HOWARD:

Well, the studies indicate that putting limits on economic damages would tend to stabilize the cost of malpractice insurance. And to the extent that that keeps obstetricians and neurosurgeons practicing, then that's a good effect. But it doesn't really address the systemic problems that we were discussing a minute ago about the distrust of the justice.

MARGARET WARNER:

And, Professor, what is your view of capping non-economic damages?

FRANK SLOAN:

Capping non-economic damages would reduce premiums over the very long run. The question is: what will that do to the supply of physicians? We don't have documentation about this. There is a lot of talk about it but we don't have documentation of linking physician supply to malpractice premiums. Clearly at some level there must be a relationship, but over time there has been a dramatic increase in physician supply; even in the areas that are now saying that they're losing doctors.

MARGARET WARNER:

Mr. Howard, do you see it that way because we heard President Bush say that essentially some doctors are being driven out of practice?

PHILIP HOWARD:

I think there's an overwhelming amount of anecdotal evidence that some doctors in certain specialties in certain areas, not most doctors, have left the practice. Or, for example, a lot of ob/gyn's don't deliver babies, although they practice gynecology, so I think there is a fair amount of evidence of that. But again, it is not getting to the heart of the problem here.

MARGARET WARNER:

Let me just ask you. Then I'll let you get back to the heart of the problem, and I'll stay with you, Mr. Howard because you are the lawyer here. Sen. Kerry's main proposal has to do with putting some sort of curbs on the filing of these lawsuits at the front end, for instance, they'd have to go through some kind of panel of independent experts to make sure it's reasonable that there be a sort of three strikes and you're out policy for lawyers who file frivolous lawsuits. He would require states, as I understand it, to have some sort of non-binding arbitration option before you go to trial. Would those reduce at least the frivolous suits?

PHILIP HOWARD:

Well, the idea of having an authority which actually has expertise to make binding decisions about what is a valid claim I think is critical to fixing the system. The problem with the three panel expert is they don't have the authority. So a number of states have these, and the way they work is they do weed out some cases. But in the tragic circumstances, the baby born with cerebral palsy, even though the science says that the doctor could not have caused the harm, the lawyers just ignore it, go to the jury and more often than not the jury awards more damages because it is a tragic situation. It is those cases or cases like that that have infected system with distrust.

MARGARET WARNER:

Do you agree with that, Professor?

FRANK SLOAN:

I do agree with that. In fact, the evidence suggests these are called certificate of merit. These reforms do not have any effect on the system at all. I mean there may be some effect but not one that we can measure.

MARGARET WARNER:

Finally they both have a proposal to cap what they call punitive damages. Professor, explain what that is and the differences that I think Sen. Kerry would like to limit them to egregious cases and I think the Bush campaign is saying something that are reasonable caps, but how much is a problem is punitive damages in driving the costs and how would it work?

FRANK SLOAN:

I don't have data from the most recent crises. That's one of the problems. Nobody has it. But from previous study that I have done, punitive damages rarely awarded in medical malpractice. We hear about the ones that are awarded because they're, you know, very big and very news worthy. But in terms of the overall picture, they're very small. Now a punitive damage is designed to punish the defendant in this case the doctor, for some wrongdoing like arriving at the operating room under the influence of alcohol, raping a patient, taking off possibly the wrong body part in a way that the physician should have known. The much more usual case is one where a large non-economic damage is awarded and….

MARGARET WARNER:

For pain and suffering and that is the one that the bush bill seeks to cap.

MARGARET WARNER:

Quick final comment from you, Mr. Sloan, about the punitive damages. Do you agree they're really not a big factor?

FRANK SLOAN:

Yes. I agree with that. The issue is pain and suffering — on the damages part.

MARGARET WARNER:

Thank you. Mr. Howard and Professor Sloan. Thanks a lot.