Medical Society chief calls for limits on victims’ pain and suffering damages to reduce liability premiums

(3/11/2022) - William W. Lander, M.D., the President of the Pennsylvania Medical Society, testified before the House Health & Human Services Committee March 10 that a cap on non-economic damages for victims of medical negligence would reduce liability premiums for doctors. According to a press statement, Lander called on legislators to revisit the issue of limits on non-economic damage awards. Lander said settlements of negligence cases fall under the category of what many call “legal blackmail.” He also characterized trial lawyers as looking for a “jackpot payday.”

Text of testimony follows:

Chairman Kenney and members of the House Health & Human Services Committee. Good morning. I am William W. Lander, M.D., president of the Pennsylvania Medical Society. Let me begin by thanking you for allowing the Pennsylvania Medical Society to testify today. Also, let me thank you for all you have done in the past in the name of health care. We recognize that your work is never ending and often not given enough words of thanks.

The Pennsylvania Medical Society is the largest Pennsylvania-based physician association working to protect and preserve the patient-doctor relationship. With nearly 20,000 physician members and about 1,500 additional members on our Patient Advisory Board, the Pennsylvania Medical Society works to tackle issues that create wedges between patients and their physicians.

Today, we'd like to raise awareness of several issues straining the work of physicians in helping patients.

First, I'm sure that everyone in this room agrees that illegal use of medications harms everyone. Illegal use of medications increases crime. It makes it dangerous for pharmacies to stock necessary medicines. It makes it difficult for physicians to prescribe. As a result, patients sometimes lose access to necessary medications.

For example, Oxycontin is a strong painkiller that when used properly can provide great relief to cancer and end-of-life patients. But on the street, this drug is being used illegally. And, when used inappropriately, it has resulted in people's deaths.

In addition to outright theft, one way Oxycontin, sometimes called "OC" or "Hillbilly Heroin," makes its way onto the streets is when corrupt individuals take advantage of the health system by seeing multiple physicians and receiving multiple prescriptions for the same medication.

The Pennsylvania Medical Society proposes that the Commonwealth develop a prescription drug-monitoring program that would immediately identify and intervene with those individuals receiving powerful legal medications from multiple physicians and pharmacies. By enabling a monitoring system for prescription dispensing, the state would have another law enforcement tool available to help catch the bad guys. We would caution that this system be used only to monitor illegal manipulation of the system, and should not be available to pharmaceutical companies for marketing purposes or to pressure physicians against using appropriate medications.

Second, tobacco use continues to drive a wedge between patients and physicians. It's been documented that smoking kills people. It has also been documented that smoking can cause greater use of the health system, unnecessarily draining health care resources that could be used more efficiently. Of course, I'm talking about many cancers, lung disease, heart disease.

As smoking causes avoidable health issues, it drives up the cost of health care as utilization increases.

The Pennsylvania Medical Society proposes that the Commonwealth ban smoking in public places and workplaces in Pennsylvania, including restaurants and bars.

Some states and cities have banned smoking in such places. According to the Coalition for a Tobacco Free Montgomery County, businesses can benefit by going smoke free.

Third, the Pennsylvania Medical Society is a strong advocate of keeping the practice of medicine in the hands of physicians and their patients. Unfortunately, today health insurance companies in Pennsylvania are not required to cover the appropriate "off-label" use of drugs. In other words, even if a physician believes the best course of treatment is use of a drug for a condition that is not primarily listed on the drug's label indications, the insurer can deny that treatment.

Off-label use of drugs to manage pain and other symptoms is not unusual and may be essential to effectively manage a person's health. Examples of an off-label use of FDA-approved drugs include antidepressants for insomnia and pain, beta-blockers for migraine prophylaxis, and anticonvulsants for a variety of pain problems.

The Pennsylvania Medical Society proposes that the state pass legislation requiring coverage of appropriate off-label use of FDA-approved medications.

Fourth, the Pennsylvania Medical Society proposes strengthening oversight of mobile health testing and treatment units to ensure Pennsylvanians, who must rely on these units, are never in danger. We found out last year, thanks to an investigative report by a local television station, that mobile units such as those performing laser eye surgery have fallen through the cracks of state oversight. While the physicians are licensed by the state, the traveling facility is not. In fact, these traveling facilities are not put through any of the rigors that a stationary clinic or hospital would be required to go through.

Please don't misunderstand my comments. We don't want to hinder access to care. These traveling units obviously play a role in bringing health care services to locations that normally would not have such resources. But, we do want to make sure they are safe and reliable.

In addition to these four important public health recommendations, I want to bring to your attention a couple of other issues.

Soon the legislature will see a bill about health insurance contracts between managed care insurers and physicians. This bill would establish an equitable framework for the contractual relationships between both parties. Pennsylvania's four regional health care delivery markets have dominating managed care plans with little competition. As a result, those plans successfully employ a number of tactics to significantly reduce physician reimbursement for services rendered, and add unnecessary administrative complexity and costs to the overall health delivery system. One such tactic is the managed care contracting process.

The managed care fair contracting bill would level the playing field in the contracting process and correct one-sided language used in contracts that allows managed care plans to downcode, bundle, and deny claims based upon the plan's individual definition of medical necessity, and keep secret fees paid, medical policies, and procedures used in the adjudication of claims.

Additionally, the bill attempts to standardize administrative processes, thereby reducing unnecessary costs, leaving more funds available in the system for providing care.

The Pennsylvania Medical Society asks that you watch for this bill and help bring a healthy discussion of these one-sided practices that only tighten insurers' vice grip on health care.

I'd like to bring another issue to the attention of this committee. In 2002, the legislature took a number of good steps forward in addressing the rising costs of liability insurance with Act 13 of 2002. That approach had three components: patient safety, insurance reform, and lawsuit abuse reform.

The Pennsylvania Medical Society believes it's time to revisit that bill and take it to the next level. Why? Well, as patients will tell you, they're feeling the pinch of being caught in the middle as the medical liability reform debate continues. According to an August 2004 IssuesPA/Pew poll, one in four Pennsylvanians polled say they've been forced to change physicians because of the rising cost of liability insurance. They acknowledge that physicians have left the area, retired early, or given up certain procedures to reduce their risk.

According to Attorney Todd A. Smith, president of the American Trial Lawyers Association, bad outcomes do not equal malpractice. In a February 27, 2005, article appearing in the New York Times, Attorney Smith, when asked about case selection, said, "We say to people right off that a bad outcome does not mean you have a medical negligence case."

Yet, despite this fact and acknowledgement from one of the country's largest trial lawyer lobbies, personal injury lawyers across the nation have an error rate that suggests a huge amount of lawsuit abuse. For example, only two percent of all malpractice claims result in a jury award. Seventy percent are dismissed, withdrawn, or found in favor of the defendant. The rest are settled, including those that would fall under the category of what many call "legal blackmail." So, personal injury lawyers get it wrong often, and they have between a 70 and 98 percent error rate, depending on how you total the numbers.

The Pennsylvania Medical Society does not believe that a magic bullet will solve the rising costs of liability insurance. If you listen to personal injury lawyers, they blame many groups. Some days they blame doctors, while other days they blame insurers. And then they pick on the stock market. Eventually, they come back and blame hospitals or insurance regulators.

But they never accept responsibility for their own errors.

The Pennsylvania Medical Society supports patient safety. Yet, based on the numbers of suits won and lost, the sad fact remains: If health care were perfect and there were no malpractice, there would still be malpractice claims. That's because trial lawyers are looking for their jackpot payday, even when, as the American Trial Lawyers Association Attorney Smith has pointed out, the individual facts point to a less-than-desired outcome, not malpractice. And the huge error rate of personal injury lawyers demonstrates this.

Another aspect of lawsuit abuse that demands further attention is a reasonable cap on non-economic damage awards. Quoting from an April 2003 article in the York Daily Record, Attorney David Lutz, a past president of the Pennsylvania Trial Lawyers Association, says, "If you make your cap so-so low, it would eventually have some impact on premiums." We agree.

As many recognize, by placing reasonable limits on "pain and suffering" awards, liability insurance rate increases are mitigated and are, as a result, not nearly as devastating. California is a state that has adopted fair reforms, including a reasonable limit on non-economic damage awards, which protect both the patient and the delivery of health care. As a result, their medical liability insurance rates have not climbed nearly as high over time as they have in Pennsylvania.

In December 2004, the Connecticut General Assembly's non-partisan Office of Legislative Research (OLR) reviewed recent lawsuit abuse reforms in Texas to determine their impact. Texas voters opted to place a reasonable limit on non-economic damage awards. According to the OLR report, the result of adopting a fair limit on "pain and suffering" awards has been positive. Between September 1, 2003, when the Texas law took affect and December 2004 when the OLR published its report, 15 new medical malpractice insurers entered their market, the number of physicians increased overall by five percent, numbers of key physician specialists increased, and liability insurance rates stabilized.

Additionally, the major liability insurer in Texas reduced rates by 12 percent effective January 1, 2004, and then announced another five percent rate reduction for 2005. Similarly, according to the OLR report, the major insurer for hospital liability coverage reduced its rates by 15 percent on January 1, 2004.

Pennsylvania has sidestepped the issue of limits on non-economic damage awards by not allowing the public to vote on a referendum to change our state's constitution. The Pennsylvania Medical Society encourages you to revisit this and give your constituents a chance to speak their opinion on the ballot.

In closing, I would like to thank the members of this committee. The Pennsylvania Medical Society appreciates the opportunity to be here today. I would now welcome any questions the committee might have for me.

SOURCE: Pennsylvania Medical Society