Should California's Law be America's Law?

Some members of Congress support the insurance industry’s idea of “capping” how much victims of medical malpractice — like the family of Jesica Santillan, the girl who died after surgeons botched her organ transplant — can receive in court.

Some in Congress want a one-size-fits-all cap of $250,000 for non-economic damages, which is the compensation juries award for very real, life-altering injuries such as the loss of a child or spouse, the loss of limbs, sight, fertility, and other losses not easily measured in terms of money.

Limiting patients’ rights will help doctors get cheaper medical malpractice insurance, some say — though consumer groups say there is no evidence to support that claim.

Now a bill called H.R. 5 — which would make these caps and other limits on the rights of patients federal law — has passed the House of Representatives by a small margin. H.R. 5 mirrors a state law called MICRA (the Medical Injury Compensation Reform Act), which was enacted in California in 1975.

Before California’s law is imposed on all Americans, perhaps we should examine how MICRA performed in California. Did it reduce doctors’ insurance costs? Did it lower costs of health care for patients?

Consumer groups report it didn’t do either.

The California citizen organization “Proposition 103 Enforcement Project” speculated in a 1995 report that “. . . health care costs in California should have dropped after MICRA’s passage and should have remained below the national average [per capita] since then.” But the evidence collected by this study paints a different picture:

After MICRA became law, Californians spent more money per capita on health care by an average of 9% every year between 1975 and 1993.
Despite MICRA, California doctors had to pay more for insurance — an increase of 190% in the twelve years (1976-1988) following enactment of MICRA, the study said. (Other consumer groups say the increase was even higher).
After the enactment of MICRA, hospital patient costs were still higher in California than in other major states. Comparing hospital patient costs in the ten most densely populated states between 1985 and 1993, California’s were the highest in four years (1985,1989, 1992, and 1993) and second highest in the two years (1998 and 1990).
California’s health care costs have skyrocketed at a rate faster than inflation since the passage of MICRA. Inflation as measured by the Consumer Price Index rose 186% between 1975 and 1993; yet California’s health care costs grew by 343% during the same period. Moreover, California’s health care costs have grown at almost twice the rate of inflation since 1985.
And MICRA didn’t help doctors either. The president of the California consumer organization Foundation for Taxpayer and Consumer Rights, Harvey Rosenfield, recently studied whether MICRA saved doctors money on insurance.

“The data clearly show that malpractice caps do not save doctors money,” says Rosenfield. “Lawmakers looking to California as a model for malpractice insurance reform must understand that [insurance reform and] regulation worked and liability caps did not.”

California residents don’t like MICRA either.

A 1997 statewide poll shows that 74% of Californians approve of removing MICRA’s cap in certain cases. Sixty-six percent believe the MICRA cap should be eliminated for doctors who negligently harm children, and 58% believe the MICRA cap should be eliminated for doctors who negligently cause death.

Of course, under both MICRA and H.R. 5, juries’ verdicts are cut down by one-size-fits-all limits regardless of the circumstances — even in the worst cases, where health care providers’ gross negligence permanently injures or even kills patients. There are no exceptions. The one-size-fits-all cap allows politicians to replace juries’ judgments on medical malpractice cases with their own.

Is this the law we want for all of America? The U.S. Senate will be called upon to answer that question soon.

For more health and safety information and tips, please visit ATLA’s “Keep Our Families Safe” Web site at http://familysafety.atla.org

Mary E. Alexander, president of the Association of Trial Lawyers of America (ATLA), is a founding partner in the San Francisco law firm of Mary Alexander and Associates, P.C.

Lynn R. Laufenberg, president of the Wisconsin Academy of Trial Lawyers is the senior shareholder in the Milwaukee law firm Laufenberg Law Group, S.C.