One Patient's Perspective In The Rising Debate Over Malpractice Reform And Award Caps
by Diane Levick
The Hartford Courant
January 27, 2003
Gus E. Velez Jr. of Bridgeport never imagined he'd be a heartbreaking voice in one of Connecticut's biggest legislative battles this year - malpractice reform.
With a good job and upcoming marriage, Velez agreed to elective surgery last February to clear the one roadblock to a promising future - a painfully inflamed colon.
But the surgery turned catastrophic when a doctor accidentally sewed Velez's main artery, impeding blood flow. As a result, both of Velez's legs had to be amputated above the knee and he's in a wheelchair, uncertain whether he'll be able to return to his job as a financial analyst.
Velez, 31, plans to sue the hospital and surgeon for lost income and the care and other items he needs that aren't covered by health insurance.
He also plans to sue for pain and suffering, and he is speaking out against the most controversial proposal for reform: a $250,000 cap on awards for such "non-economic" damages.
In a lobbying battle of the titans, doctors, hospitals, insurers and business groups are all advocating the cap as a remedy for skyrocketing malpractice insurance rates. Several hundred physicians and some patients are expected to rally for reform at the state Capitol March 26.
Trial lawyers and some of their clients, however, argue that the solution to soaring rates is to reduce medical mistakes and incompetence, and to impose stricter controls on insurers. Capping the amount of damages, they say, would enrich insurers and penalize the most severely injured - such as Velez.
On the advice of his attorney, Velez, who endured multiple surgeries and four months of inpatient rehabilitation, declines to say how much money he thinks he should get. But he says $250,000 isn't enough to compensate him for the life he would have had. More money, he adds, "will make life livable" and "make up for what I can't do anymore."
"I feel like I've been almost murdered," Velez says. "I want people to put themselves in my shoes and feel what I feel for just one day, and then tell me a $250,000 cap is enough."
As the debate raises wrenching questions of money and justice, it's uncertain whether pro-cap forces will be able to summon the firepower in a Democrat-controlled General Assembly to pass a limit. But legislative leaders of both parties want to pass something this session to address soaring malpractice insurance rates.
"I don't think we're at a crisis yet, but we're heading that way," says Rep. Gary Orefice, D-East Lyme, co-chairman of the General Assembly's insurance and real estate committee.
The fight over the issue is going to be "nasty, nasty, nasty," predicts Sen. Louis DeLuca of Woodbury, the Republican minority leader. "I've seen this thing coming for a year."
Three legislative committees - insurance, public health and judiciary - expect to hold a joint public hearing on the malpractice issue. House Speaker Moira K. Lyons says, "We must try to do something" to get a grasp on the spiraling costs, "but I'm not sure yet what that will be."
The issue has created some unusual alliances. Doctors and hospitals, for instance, have fought and sued health insurers in recent years over pay and care issues, but they are now allied to lobby for caps on damages.
"We have obviously been at odds with the [Connecticut] HMO Association in the past," says Ken Ferrucci, director of government relations for the Connecticut State Medical Society. "It just shows how politics makes strange bedfellows."
Though health insurers don't sell malpractice insurance, they want the caps because doctors use the malpractice-rate issue to seek higher reimbursements. Health plans also worry about more doctors dropping out of their networks because of malpractice insurance costs.
The Connecticut Business and Industry Association has joined the fray in favor of caps because malpractice insurance rates are "creating upward pressure" on what employers pay for workers' health insurance, says Jan Spegele, the association's vice president of regulatory affairs.
The local clash comes as President Bush prods Congress to cap pain and suffering damages nationally at $250,000, and doctors in some states stage walkouts to pressure their legislatures for relief. Even in Connecticut, at least 28 OB-GYNS have stopped delivering babies because annual malpractice rates typically run $60,000 to more than $120,000, raising long-term concerns about patients' access to care.
No one is proposing to limit "economic damages" - payments for medical care and lost wages - and Connecticut law doesn't permit punitive damages awards for malpractice.
Would trial lawyers compromise on the pain and suffering issue by accepting a higher cap than $250,000?
"It's a compromise with the devil," says Michael Koskoff, a prominent trial attorney who represents Velez. "We don't deal with the forces of evil."
St. Vincent's Medical Center in Bridgeport, where Velez's surgery went wrong, is ready to negotiate and, "I assume it will be a sizable settlement," says Brian Wallace, a hospital spokesman.
Wallace says the "adverse event" was subject to full peer review, which found that it wasn't a "straightforward case. There is some lack of clarity as to why the tragic outcome occurred."
The surgeon involved, who had excellent credentials, is on an indefinite leave of absence from St. Vincent's, Wallace says. The surgeon, believed to be practicing in another state, couldn't be reached for comment.
It's unclear how effective a cap would be in controlling malpractice insurance rates, especially since insurers' profits and prices tend to rise and fall in cycles anyway.
Trial lawyers blame high insurance rates largely on a decline in insurers' investment income, and on price wars. They say the companies should have foreseen tougher economic times and reserved more money, and smoothed out rate increases over the years.
"They're trying to make up for their losses by taking it out of the pockets of the most catastrophically injured people," Koskoff says.
But the IRS would penalize insurers for building up reserves without justification, and regulators won't approve rate increases that aren't based on actual claim trends, says Denise Funk, president and chief executive of the doctor-owned Connecticut Medical Insurance Co.
The lawyers are exaggerating the effect of lower investment returns on rates, which are driven by larger claim payouts, she says.
Connecticut Medical - the state's largest malpractice insurer - had 19 cases involving awards or settlements of $1 million or more in 2002, compared with nine cases that size in 1997, Funk says..
A cap on non-economic damages, Funk says, wouldn't result in a rate rollback. But "what you will see is at least a leveling out," she says. "It will curtail the growth [of rates] dramatically."
Yet caps raise questions of fairness and justice. A pain-and-suffering cap disproportionately affects stay-at-home parents, the elderly and others who could claim little, if any, economic damages for lost wages, trial lawyers say.
And a cap would allow the less seriously injured to be more fully compensated than the catastrophically injured, lawyers note.
They also argue that caps would deter legitimate lawsuits by rendering them financially unfeasible. Attorneys, who take a percentage of an award or settlement, must pay thousands of dollars for medical and other experts in preparing a case. They say that's why there's already a disincentive to bring "frivolous" suits, which Bush claims are a major problem.
Many other solutions for the malpractice issue are being proposed.
The Connecticut Trial Lawyers Association, for instance, wants stronger regulatory review of malpractice rates. "Bring it on!" responds Funk, who believes the rates will withstand scrutiny.
The association also wants restrictions on the ability of malpractice insurers to withdraw from the state. Several companies have dropped customers or stopped selling new policies in Connecticut, disrupting the market and potentially reducing competition.
Insurers should redistribute the rate burden among doctors to make coverage more affordable for OB-GYNS and other specialties who pay the highest premiums, lawyers suggest.
Insurers and their allies want to tighten up the state's 1986 malpractice reform. The law, aiming to deter cases without merit, requires lawyers to get a "good faith certificate" from a physician to proceed with a case. It's too easy to get a "hired gun" to sign off on a case, so Connecticut should have an independent panel screen proposed cases, Funk says.
Legislators should also crack down on trial lawyers' fees, insurers say, because the limits in the 1986 law can be ignored if a client agrees to higher percentages.
Other ideas under discussion by various players include a surcharge on medical bills or health insurance premiums to help defray malpractice premiums. Another concept is creating a malpractice insurance pool of last resort - akin to what exists for property insurance.
With the heat turned up on damages caps, Orefice says, "We're looking for some things `out of the box.'"