The Center for Health Affairs Protecting Access to Care Through Civil Justice Reform Issue Brief available at: www.chanet.org August 2004.

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Presentation transcript:

The Center for Health Affairs Protecting Access to Care Through Civil Justice Reform Issue Brief available at: August 2004

High Jury Awards and Claims Payments Most claims filed do not result in payment to the plaintiff Average payment for malpractice claim on the rise: – $95,000 (1986) – $320,000 (2002) Payments to plaintiffs of $1 million or more increasing – 298 (1991) – 806 (2002)

The Medical Liability Environment in Ohio Medical professional liability (MPL) insurance companies exiting the market – In 2000, MPL insurance underwriting losses were 67.9 percent in Ohio compared to 35.9 percent nationwide – Since 2000, Ohio has lost at least four MPL insurance carriers Rising tide of claims payments lifts premiums – Some Ohio internists, general surgeons and ob/gyns faced a more than 60 percent increase in professional liability insurance premiums in 2002 – Northeast Ohio hard-hit by premium increases Average premium rate for Cuyahoga County general surgeons was $84,801 in 2003, compared to average premiums of $68,148 statewide

Consequences of an Unstable Medical Liability Environment Doctors are on the move – In Ohio, 123 doctors left, retired early or ceased high-risk procedures in the past year Doctors practicing defensive medicine – Shying away from high-risk specialties – Stopping high-risk procedures – Ordering more tests and treatments than they normally would

How to Solve the Problem Improved patient safety – Hospital Quality Initiative – Technology to reduce medication errors Insurance reform – Patient compensation fund – Joint Underwriting Association

How to Solve the Problem (cont’d) Tort reform: – Caps on damages / jury awards – Offsets to the collateral source rule – Abolition of joint and several liability – Caps on attorney’s fees – Statute of limitations – Periodic payment of damages – Arbitration / medical review screening panels

Evidence that Tort Reforms Work Tort reforms slow the rate of professional liability growth Tort reforms may help ensure an adequate supply of physicians Reforms that directly limit liability have been found to reduce hospital expenditures by five to nine percent without substantial effects on medical complications or mortality

Efforts to Reform the Civil Justice System in Ohio Ohio among 20 states deemed by the American Medical Association to be in a full-blown medical liability crisis Ohio legislature has passed several tort reform bills in the past 25 years, but The Supreme Court of Ohio has ruled them unconstitutional and overturned them The most sweeping reforms to the state’s medical liability law were contained in Senate Bill 281, which became effective April 10, Remains to be seen whether this law will pass muster with the Supreme Court of Ohio.

Ohio’s Tort Environment at a Glance Caps on damages (S.B. 281) Non-economic damages are limited to the greater of $250,000 or three times economic damages up to a maximum of $350,000 per plaintiff or $500,000 if there are multiple plaintiffs. For catastrophic injuries the maximum may increase to $500,000 per plaintiff or $1 million for multiple plaintiffs. Ohio Rev. Code Ann. § Offsets to the collateral source rule (S.B. 281) With some exceptions, defendants may introduce evidence of collateral sources of payments made to plaintiffs and plaintiffs may submit evidence of any amount the plaintiff has paid or contributed to secure the benefits. Ohio Rev. Code Ann. § Abolished joint and several liability (S.B. 120) Defendants are responsible for their proportionate share of negligence for non-economic damages. For economic damages, defendants who are 50% or less at fault are responsible for their proportionate share of negligence, but defendants who are held more than 50% at fault are jointly and severally liable. Ohio Rev. Code Ann. § Caps on attorney fees (S.B. 281) No limit on attorney fees, but if attorney fees exceed the non-economic damages awarded they are subject to approval by the probate court. Ohio Rev. Code Ann. § Statute of Limitations (modified in S.B. 281) Claims must generally be filed within one year. In most cases, a person may not file a claim more than four years from the occurrence of the act or omission. Exceptions apply, particularly in the case of minors and persons of unsound mind. Ohio Rev. Code Ann. § Periodic payment (S.B. 281) Court may award periodic payment of future damage awards that exceed $50,000 if the plaintiff or defendant files a motion with the court. Ohio Rev. Code Ann. § Arbitration / Medical review screening panel (modified in S.B. 281) Ohio law allows, but does not require, malpractice cases to be referred to non-binding arbitration. Findings are not permitted in court. Ohio Rev. Code Ann. § Patient compensation fund No patient compensation fund currently exists. Passage of S.B. 281, however, required the Superintendent of Insurance to study the feasibility of a patient compensation fund to cover medical malpractice claims.

Indiana’s Tort Environment at a Glance Cap on economic and non-economic damages of $250,000 for each provider and $1,250,000 for all qualified providers Patient compensation fund (PCF) Medical review screening panel Statute of limitations Periodic payment of damages permitted Evidence of certain collateral sources allowed Attorney’s fees can’t be more than 15 percent of any award from the PCF

Professional Liability Insurance: Ohio Versus Indiana

Wisconsin’s Tort Environment at a Glance Cap on non-economic damages of $432,352 for non-death cases (adjusted annually for inflation) and cap on non-economic damages of $350,000 for adults and $500,000 for minors for death cases Patient compensation fund (PCF) Mediation may be requested Statute of limitations Evidence of collateral sources allowed Attorney’s fees generally capped at one-third of first $1 million and 20 percent of any amount over $1 million

Professional Liability Insurance: Ohio Versus Wisconsin

What Have We Learned? Data on premiums across states indicate that tort reforms, when upheld, create a rational civil justice environment Ohio has reached a critical point in implementing civil justice reform. Composition of the Supreme Court of Ohio will have an enormous impact on the state of civil justice reform.