This month’s collapse of Reciprocal of America, the state’s largest reciprocal
insurer against medical malpractice claims, means much more than the loss of
insurance coverage for more than 300 hospitals and other health-care providers
in Tennessee.
It means that the medical malpractice crisis in
Tennessee has arrived ahead of schedule. And the entire
health-care system may be in jeopardy as a result.
Ironically, the receivership of Reciprocal of America
and its affiliates left 3,500 attorneys without insurance for
legal malpractice as well. Will this ripple effect serve as a
wake-up call to trial lawyers who steadfastly oppose medical
malpractice reform, or do we continue to play the litigation
lottery and jeopardize everyone’s access to affordable health care?
The spiraling cost of health insurance for individuals
and employers, malpractice liability insurance for doctors
and hospitals, and coverage for TennCare enrollees is the
result of declining investments and increasing costs associated
with an aging, poorly educated, and sickly population of
Tennesseans as well as the cost of medical malpractice
litigation. We are not alone. The American Medical Association
finds a full-blown crisis in at least a dozen states, including
Florida, Georgia, Mississippi, Nevada, New Jersey, New York,
Ohio, Oregon, Pennsylvania, Texas, Washington, and West
Virginia. It says crises are looming in another 30 states.
With increasing frequency, doctors can no longer
afford to provide care to those who need it, and those who
need care cannot afford it or the health insurance that is
supposed to make the care affordable. Health-care costs for
the privately insured increased 10 percent in 2001. Last
year, premiums for employer-sponsored health coverage rose
12.7 percent. The percentage of Americans covered by
employment-based health insurance fell 1 percent to 62.6
percent in 2001, and two out of five Americans have no group
insurance coverage.
Individuals are losing their private health-insurance
coverage at an alarming rate. The uninsured increased by
1.4 million people in 2001. Eight out of 10 uninsured are
in working families that cannot afford health insurance
and are not eligible for public programs like TennCare. In
Tennessee, the newly uninsured and now uninsurable turn
to TennCare, which teeters on the brink of collapse.
Comprehensive insurance reform is the only real
answer. Reform must address each component: insurers as well
as the insured, providers as well as payers, and courts as well
as claimants and their counsel. The latter is commonly
referred to as “medical malpractice reform.” Although such
reform is debated in Congress, Tennessee cannot afford to wait
for a federal solution.
According to the Tennessee Medical Association
(TMA), 73 percent of Americans support medical malpractice
reform, which imposes caps on damages for
noneconomic “pain and suffering” and punitive damages. The median
jury-verdict award increased 43 percent between 1999 and
2000. More than half of all jury awards now exceed $1 million,
and the average has increased to $3.5 million. According to the
TMA, escalating jury awards and the high cost of defending even
frivolous lawsuits are driving premium increases. The increase
is making access to affordable care progressively more
difficult. Improving access to affordable health care is crucial at this time.
California capped damages over 25 years ago. As a
result, premium increases are only one third of the rest of the
nation. Under California’s more stable system, for example,
an ob-gyn’s insurance costs approximately $57,000 per
year compared to $210,000 for the same coverage in Florida.
We need such stability in Tennessee.
This is why I am sponsoring legislation in the 103rd
General Assembly patterned after California’s reforms,
including caps on damages which otherwise are speculative
and intangible. We must protect the rights of individuals to
fair compensation for malpractice injuries but provide a
more reasonable degree of predictability. Caps accomplish
that. They provide accountability but help preserve access
and affordability. Without caps, the litigation lottery is more
like Russian roulette for the rest of us. n
Mark Norris is a Republican state senator from Collierville.
