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Addendum to Post #7: Here’s Why the California Cap on Non-economic Damages Is Archaic and Post #14: Until the California Supreme Court Takes a Gander, the California Cap on Non-economic Damages Will Stay Firmly in Place

Written by :  Patricia I. James**

In Post #7, I wrote about the cap of $250,000 on non-economic damages in California.  Basically, I said that it was an unfair cap that had not been revised since it was established in 1975.

In Post #14, I wrote that, if the Gavello case went to the California Supreme Court, it might find that the cap was unconstitutional.  I did not give that much hope but it was a thought.

As it turns out, there might actually be a change in the works.  According to an article in the Los Angeles Times from July 10, 2013, “Time to fix state’s broken medical malpractice law,” (http://articles.latimes.com/2013/jul/09/business/la-fi-hiltzik-20130710) by Michael Hiltzik, the man who was behind sponsoring the Medical Injury Compensation Reform Act of 1975 (“MICRA”), former California Assemblyman Barry Keene, has acknowledged that MICRA is grossly outdated.  The article states that, “[t]he good news is that there’s a move on to bring it into the 21st century, which Keene supports.  The consumer group Consumer Watchdog is drafting a ballot initiative it hopes to place before the voters at the November 2014 election.”

However, the “group says it will hold off if the Legislature reforms MICRA this summer.  Given the grip that the insurance industry and the medical lobby have on the Legislature, the chances of that are slim.  So brace yourself for an initiative campaign likely to break spending records next year.”

As you will recall, I wrote that the amount had not been adjusted for inflation.  The article addresses that problem, stating that “[b]ecause it was not indexed for inflation, in 1975 dollars it’s worth less than $58,000 today.  To put it another way, if it had been inflation-indexed, the cap would be $1.1 million.  Raising the cap to at least that level and permanently indexing it to inflation is the goal of the proposed initiative.”

Interestingly, Mr. Keene had proposed an inflation-indexed cap in an amendment to his original bill.  He thought it would pass routinely.  Unfortunately, the trial lawyers lobby adamantly opposed the inflation index “to make the bill as noxious as possible to guarantee its rejection.”  Thus, they ended up shooting themselves in the foot since MICRA passed without the inflation provision.

I have heard on more than one occasion, and it is referred to in this article, that MICRA is “a bulwark against frivolous lawsuits filed by unscrupulous lawyers.”  However, a 2006 study of 1,452 claims published in the New England Journal of Medicine, found that “the most frequent injustice in malpractice cases involved not undeserving patients collecting payments, but the opposite, deserving patients getting nothing.”

The article suggests, very strongly, that the real winners are the insurers.  “Doctors would like to think that the insurers pass MICRA savings onto them, but they’re dreaming.  Last year, Insurance Commissioner Dave Jones ordered rollbacks of $52 million in “excessive” malpractice premiums.”

Further, “[o]ver the past 22 years, California malpractice insurers have paid out in claims an average of only 36 cents of every premium dollar they’ve collected.”

Another article in the Los Angeles Times, entitled “Battle lines drawn in fight to raise malpractice awards,” by George Skelton on July 25, 2013, (http://www.latimes.com/news/local/la-me-cap-malpractice-20130725,0,3395259.column) also addresses these issues.  However, it added that “the initiative would do two other things: It would mandate drug and alcohol testing for physicians who work in hospitals.  And it would require doctors to use a state database that tracks patients’ prescription drug histories.”

As to the first, pilots and bus drivers are required to go through mandatory testing.  Why not doctors?

With regard to the latter, this would help to prevent “doctor shopping” to obtain excessive prescription drugs.

One of the arguments against raising the cap is that “it would stimulate frivolous lawsuits and drive up malpractice premiums, thereby raising the cost of healthcare and making it even less accessible for poor people. ” However, Jamie Court, the president and board chairman of Consumer Watchdog states that “Malpractice costs –claims and premiums–amount to about one-half to one percent of all healthcare costs.  It would be mathematically impossible for malpractice costs to impact healthcare costs.”

Finally, in a letter to the editor, Philip Schwarzman, M.D. from Marina del Rey, opined that “the majority of alleged malpractice cases that work their way through our legal system are cases of bad outcomes and not malpractice.”  (http://www.latimes.com/news/opinion/letters/la-le-0727-saturday-malpractice-cap-20130727,0,3383578.story). He suggests that “[a]llegations of malpractice should be screened by a committee of physicians, attorneys and lay people to determine if the case meets the definition of malpractice or is just a bad outcome.  Cases with merit would go forward, and the cap on pain-and-suffering payouts would be adjusted for inflation.”

A majority of the cases that work their way through the system are bad outcomes, not malpractice?  Huh?

Now, I don’t know where Dr. Schwarzman got his information.  However, in almost every medical malpractice case, an expert has to testify that the actions of the healthcare practitioner fell below the standard of care and caused damage.  That is negligence.

Granted, I have not done a survey but, in my experience, an expert is going to say that it is a bad outcome if it is a bad outcome.  Of course, plaintiff’s counsel can “shop” for an expert who is “finally” going to say that there is malpractice, but why?  First, that expert probably has a reputation in the defense community as being a…, well, it rhymes with “bore.”  Therefore, he or she will be easily discredited.  Second, if it is just a bad outcome, defense counsel will have no trouble finding a reputable expert who will say exactly that.

In addition, although the attorneys and lay people on Dr. Schwarzman’s committee may be able to opine about what they think the case is worth, their opinion as to whether it is malpractice or a bad outcome is totally irrelevant.

I recently spoke to a treating doctor about a potential malpractice case involving one of his patients and my potential client.  He asked me if I thought that the case was a viable malpractice case.  I told him that it did not matter what I thought.  If I did not have an expert who could testify, to a reasonable degree of medical probability, that the doctor’s actions fell below the standard of care and caused damage, there was no case.

There will always be slime-ball attorneys, slime-ball doctors, slime-ball plumbers and electricians and mechanics and you get my drift.  However, call me naive but I think most people want to do the right thing.  Sure, some lawsuits will be won by people who don’t deserve it.  However, the people who have really been harmed should not be punished by those few. It is time for the cap on non-economic damages to be raised and adjusted each year.

**No portion of this Post is intended to constitute legal advice. The views expressed are solely those of the author.