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MALPRACTICE INSURANCE/TORT REFORM

There is a lot of talk by President Bush and Republicans on Tort Reform and the need to cap (medical) malpractice payouts - among a horde of other things (also see here). In this section a collection of articles and commentary is featured on this issue, for those who want to go beyond what GOP spokespersons and their lapdogs in the media want to say about it. In essence, the wealth of real data on this topic clearly shows that the Bush administration's and GOP's attempt to perpetrate myths on this topic is nothing short of fraud. The GOP's proposals both hide the real problem and as Dwight Meredith says, call for a solution to a problem that is still to be identified.  

Most of the links here are from Public Citizen, Dwight Meredith (formerly at Politics, Law and Autism (P.L.A.) and now at Wampum) and Kevin Drum (Calpundit). I'd like to thank these folks for doing a truly outstanding job fighting the GOP juggernaut on this issue. In particular, I must admit to being amazed at Dwight's brilliance and his ability to take legalese and otherwise complicated concepts and explain them in terms so simple that a layperson can understand. If you want to know the truth about malpractice and tort reform, make sure you bookmark Wampum, Calpundit and Public Citizen. 

I. MALPRACTICE CASES - FACT OR FICTION?

1. Obesity lawsuit and other cases
Via Dwight Meredith (P.L.A.) here's Long Story, Short Pier who lists many cases cited in an attempt to push "tort reform" (bold text is my emphasis) - all of which inconveniently belong in the fiction/myth department.

I work in an office that deals with among other things other people’s litigation, so this has been making the email rounds:

It’s time once again to consider the candidates for the annual Stella Awards. The Stellas are named after 81-year-old Stella Liebeck who spilled coffee on herself and successfully sued McDonalds. That case inspired the Stella Awards for the most frivolous successful lawsuits in the United States.

This year’s candidates:

1. Kathleen Robertson of Austin, Texas, was awarded $780,000 by a jury of her peers after breaking her ankle tripping over a toddler who was running inside a furniture store. The owners of the store were understandably surprised at the verdict, considering the misbehaving little toddler was Ms. Robertson’s son.

2. A 19-year-old Carl Truman of Los Angeles won $74,000 and medical expenses when his neighbor ran over his hand with a Honda Accord. Mr.Truman apparently didn’t notice there was someone at the wheel of the car when he was trying to steal his neighbor’s hub caps.
3. Terrence Dickson of Bristol, Pennsylvania, was leaving a house he had just finished robbing by way of the garage. He was not able to get the garage door to go up since the automatic door opener was malfunctioning. He couldn’t re-enter the house because the door connecting the house and garage locked when he pulled it shut. The family was on vacation, and Mr. Dickson found himself locked in the garage for eight days. He subsisted on a case of Pepsi he found, and a large bag of dry dog food. He sued the homeowner’s insurance claiming the situation caused him undue mental anguish. The jury agreed to the tune of $500,000.
4. Jerry Williams of Little Rock, Arkansas, was awarded $14,500 and medical expenses after being bitten on the buttocks by his next door neighbor’s beagle. The beagle was on a chain in its owner’s fenced yard. The award was less than sought because the jury felt the dog might have been just a little provoked at the time by Mr. Williams who was shooting it repeatedly with a pellet gun.
5. A Philadelphia restaurant was ordered to pay Amber Carson of Lancaster, Pennsylvania, $113,500 after she slipped on a soft drink and broke her coccyx (tailbone). The beverage was on the floor because Ms Carson had thrown it at her boyfriend 30 seconds earlier during an argument.
6. Kara Walton of Claymont, Delaware, successfully sued the owner of night club in a neighboring city when she fell from the bathroom window to the floor and knocked out her two front teeth. This occurred while Ms.Walton was trying to sneak through the window in the ladies room to avoid paying the $3.50 cover charge. She was awarded $12,000 and dental expenses.
7. This year’s favorite could easily be Mr. Merv Grazinski of Oklahoma City, Oklahoma. Mr. Grazinski purchased a brand new 32-foot Winnebago motor home. On his first trip home having driven onto the freeway, he set the cruise control at 70 mph and calmly left the drivers seat to go into the back and make himself a cup of coffee. Not surprisingly, the RV left the freeway, crashed and overturned. Mr. Grazinski sued Winnebago for not advising him in the owner’s manual that he couldn’t actually do this. The jury awarded him $1,750,000 plus a new motor home. The company actually changed their manuals on the basis of this suit, just in case there were any other complete morons buying their recreation vehicles.

There’s only one problem—or rather, seven: they’re all utter fabrications.
Beyond, of course, the fact that Stella Liebeck’s being maligned yet again...even the real Stella Awards (an entertaining enough read, which focusses out of necessity on suits filed rather than insane amounts rewarded—you go where the material is, after all) admits her treatment has been grossly unfair. (But: the name doesn’t appear likely to change any time soon.)
This, then, is the atmosphere in which the debate over tort reform swirls. Quite literally: if you go back to the Snopes takedown, you’ll see that the New York Daily News printed a copy of that original, utterly fabricated email back in June of 2002. —Which, I suppose, is funnier to read over coffee than the Center for Economic Justice’s breakdown of exactly how much insurance companies made right after Texas instituted tort reform.

2. Liebeck v. McDonald's
Let's in fact look at the famous, often-cited case involving McDonald's and hot coffee. I have myself heard this case being cited as an example of lawsuit abuse - so it is only appropriate that the facts here are clarified to show why the reality was different.

Via Dwight Meredith (P.L.A), here is Off The Kuff:

I knew if I brought up tort reform as I did in the previous post that someone would mention Liebeck v. McDonald's, the infamous case in which a woman was awarded a multimillion dollar amount for spilling coffee on herself. As Owen does, so do I consider this case a seminal one for the American tort system. Unlike Owen, I consider it a case in which the system did exactly what it's supposed to.
Here are a few links to some relevant facts about this case. A summary with some links is here, which makes the following points:

But the damage to the plaintiff in Liebeck was by no means insignificant. The woman, who was 79 years-old at the time of the accident, received third-degree burns requiring skin grafts on much of her inner thighs, buttocks, and genitals. Is this what people ordinarily expect from spilled coffee?
Nor was the defendant unfairly penalized. McDonald's kept its coffee much hotter, about 40 degrees hotter, than the coffee you drink at home. The higher heat improves the aroma and avoids customer complaints of lukewarm coffee. But McDonald's had already received nearly 700 complaints about the danger of the hot coffee prior to the Liebeck accident. And coffee at that temperature, around 185 degrees Fahrenheit, is unfit for human consumption until it cools down. McDonald's needed to be curbed.
Moreover, the court system in Liebeck operated fairly to McDonald's. The judge in the case reduced the punitive damages awarded by the jury, down to three times the actual damages, and in fact reduced the plaintiff's actual damage award as an offset for her own contributory negligence in spilling the coffee. In fact, the plaintiff later settled with McDonald's for an amount below what the judge awarded her.
So what's all the fuss? McDonald's was truly blameworthy, Ms. Liebeck was harmed beyond the level of reasonable expectation, and the court prevented an emotional situation from leaving the plaintiff with an excessive award. You might still worry about the punitive damages, and argue that Ms. Liebeck, herself, should not benefit financially from the attempt to punish McDonald's. But unless courts in America are to become something besides a forum to resolve individual disputes, punitive damages will remain the most effective way to curb reckless corporate behavior.

This link has more details, including the fact that McDonald's coffee was extra hot on the assumption that most people who buy it at a drive-though wait until they reach their destination before drinking it, even though their own research showed that most people actually drink it immediately.

Via Dwight Meredith (P.L.A), here is Jeff Cooper:

As I'm trying to cut back a bit on my blogging, I'll resist the temptation to import my entire product liability course into this site. So I'll keep this short. We have here a company that sold a product in a dangerous condition (McDonald's served its coffee at about 180 degrees Fahrenheit, roughly forty degrees above the temperature at which hot liquids begin to scald the mouth and throat), that had received hundreds of complaints of injuries as a result of the dangerous condition of the product, and that took no remedial action. The plaintiff (whose comparative negligence was taken into account by the jury) suffered third-degree burns as a result of the entirely foreseeable act of trying to get the lid off the cup so that she could add cream and sugar. People understand that coffee is hot, and that contact with hot liquids can cause burns. But no reasonable person (without advance warning of the excessively high temperature at which McDonald's coffee was served) would expect the kinds of injuries that the plaintiff suffered. There are some examples of outrageous jury decisions out there. This is not one.

Via Dwight Meredith (PLA), here is Long Story, Short Pier:

If you’ve hung out on any internet forum anywhere, you know how firmly “that lady who spilled the coffee and sued McDonald’s” is entrenched in the popular imagination. A lie, after all, can get halfway around the world while the truth is putting its shoes on, so let’s give that laggard truth a push.

Stella Liebeck of Albuquerque, New Mexico, was in the passenger seat of her grandson’s car when she was severely burned by McDonalds’ coffee in February 1992. Liebeck, 79 at the time, ordered coffee that was served in a styrofoam cup at the drivethrough window of a local McDonalds.
After receiving the order, the grandson pulled his car forward and stopped momentarily so that Liebeck could add cream and sugar to her coffee. (Critics of civil justice, who have pounced on this case, often charge that Liebeck was driving the car or that the vehicle was in motion when she spilled the coffee; neither is true.) Liebeck placed the cup between her knees and attempted to remove the plastic lid from the cup. As she removed the lid, the entire contents of the cup spilled into her lap.
The sweatpants Liebeck was wearing absorbed the coffee and held it next to her skin. A vascular surgeon determined that Liebeck suffered full thickness burns (or third-degree burns) over 6 percent of her body, including her inner thighs, perineum, buttocks, and genital and groin areas. She was hospitalized for eight days, during which time she underwent skin grafting. Liebeck, who also underwent debridement treatments, sought to settle her claim for $20,000, but McDonalds refused.
During discovery, McDonalds produced documents showing more than 700 claims by people burned by its coffee between 1982 and 1992. Some claims involved third-degree burns substantially similar to Liebecks. This history documented McDonalds’ knowledge about the extent and nature of this hazard.
McDonalds also said during discovery that, based on a consultant’s advice, it held its coffee at between 180 and 190 degrees fahrenheit to maintain optimum taste. He admitted that he had not evaluated the safety ramifications at this temperature. Other establishments sell coffee at substantially lower temperatures, and coffee served at home is generally 135 to 140 degrees.
Further, McDonalds’ quality assurance manager testified that the company actively enforces a requirement that coffee be held in the pot at 185 degrees, plus or minus five degrees. He also testified that a burn hazard exists with any food substance served at 140 degrees or above, and that McDonalds coffee, at the temperature at which it was poured into styrofoam cups, was not fit for consumption because it would burn the mouth and throat. The quality assurance manager admitted that burns would occur, but testified that McDonalds had no intention of reducing the “holding temperature” of its coffee.

3. Dwight Meredith (P.L.A.) on the cases cited by U.S. News and World Report Editor-in-Chief and Publisher Mort Zuckerman - again bogus ones.

Mort Zuckerman, editor in chief and publisher of U.S. News and World Report has been busted. His bust concerned a recent column (the link is to a Jewish World Review reprint of the column as the U.S. News issue has gone behind the $ firewall) in U.S. News And World Report decrying that most durable of hobby horses, frivolous lawsuits.
Two of the examples of frivolous lawsuits provided by Mr. Zuckerman are:

a woman throws a soft drink at her boyfriend at a restaurant, then slips on the floor she wet and breaks her tailbone. She sues. Bingo--a jury says the restaurant owes her $100,000! A woman tries to sneak through a restroom window at a nightclub to avoid paying the $3.50 cover charge. She falls, knocks out two front teeth, and sues. A jury awards her $12,000 for dental expenses.

Howie Kurtz of the Washington Post busted Zuckerman for using those two examples for the simple reason that they never happened. Somebody made them up. As Kurtz writes:

Great stuff -- and, unfortunately for Zuckerman, totally bogus. Two Web sites -- StellaAwards.com and Snopes.com -- say the cases of the soda-slipping Pennsylvania woman and the window-wriggling Delaware woman are fabricated, and no public records could be found for them.
Zuckerman has plenty of company. A number of newspapers and columnists have touted the phantom cases since they surfaced in 2001 in a Canadian newspaper.
Ken Frydman, Zuckerman's spokesman, did not dispute that the pair of cases in the column two weeks ago were imaginary, but would not address whether the magazine will publish a retraction.
"These cases were reported in a variety of other reputable publications, such as the Fort Worth Star-Telegram and the London Telegraph, and Mr. Zuckerman could have cited dozens of other cases," Frydman says. "Few Americans would disagree with the proposition that there are far too many frivolous lawsuits filed."

Zuckerman choose those examples for his column because the cases, if real, are obviously ridiculous. No one could possibly think that either of the plaintiffs cited by Zuckerman deserves to be compensated in any way.
Indeed, Zuckerman is quite sure that the examples will be viewed as ridiculous by all of his readers. I wonder, then, why he thinks a jury would view the case any differently? Juries are made up from a cross section of the community. I have selected many juries. I have never had a jury that did not include at least a few people who are readers of U.S. News and World Report or similar publications (bold text is eRiposte emphasis).
I also can not help but wonder why so many examples of alleged ridiculous jury verdicts turn out to be false. Zuckerman’s spokesman contends that there were dozens of examples that could have been used. If that is true why do we so often hear about the McDonald’s coffee case (which was real but not frivolous), the mythical driver of the RV who set the cruise control and left the wheel and sued when a wreck occurred and many other bogus examples of frivolous suits. See Kip's post for a listing and a debunking of those mythical suits.

More bogus cases - this time from Newsweek - also covered by Dwight Meredith (Wampum).

4. Public Citizen recently responded to a woefully researched, fear-mongering Newsweek article that spread more myths. Some extracts:

Newsweek’s Dec. 15 cover story entitled "Lawsuit Hell/Civil Wars" is a one-sided diatribe masquerading as investigative journalism...The article reads like tabloid journalism – designed to excite and sell magazines rather than inform. It pushes readers’ emotional buttons rather than providing balanced analysis that informs the public about a critical policy issue...
In adding a partnership with NBC for week- long broadcast tie- ins and on- line chats, including one with the lead author and lawsuit "victims" described in the article, Newsweek has gone beyond advocacy journalism to crusade against consumers’ access to the courts – a crusade without precedent even among news outlets with overt conservative leanings..
From a journalistic point of view, the article suffers from major reporting deficiencies, including an extreme lack of due diligence. The article includes:

• Many false and exaggerated anecdotes that present an unbalanced and negative caricature of the legal system.

• Major factual inaccuracies about the legal system and lawsuits.

• Proposed solutions that have no basis in experience.

Finally, the article’s lead author, Stuart Taylor Jr., a commentator rather than a news reporter, is heavily biased towards business interests on tort issues and has a history of advocacy on this issue. His viewpoints, which rely largely on corporate lawyer Philip K. Howard and his book, "The Collapse of the Common Good," should have been relegated to a column...
Newsweek has fallen hook, line and sinker for the myths and distortions spread by a well-organized campaign funded by the American Medical Association, insurers, tobacco companies, auto manufacturers and others to strip consumers – but, notably, not businesses – of their legal rights...

Newsweek Chooses Many False and Exaggerated Examples to Present an Unbalanced and Negative Caricature of the Legal System...

• [NEWSWEEK]  "Ryan Warner is a volunteer who runs an annual softball tournament in Page, Ariz., that usually raises about $5,000 to support local school sports programs. But not this year. A man who broke his leg at a recent tournament skidding into third base filed a $100,000 lawsuit against the city, and Warner fears he may be named as a defendant." [p. 44]

  Newsweek fails to disclose that Ryan Warner is immune from liability. When telephoned at his place of employment, the Warner Insurance Agency in Page, Arizona, Ryan Warner reported to Public Citizen that the injury in question occurred two years ago in 2001 and as of this date he has not been sued. Warner insurance sells a broad range of property casualty insurance, including general liability insurance to protect against civil suits. Warner also said that he had not heard of the Volunteer Protection Act of 1997. 1 Under that law, volunteers for non-profit organizations or government programs around the country, even those dealing with children, cannot be held responsible for their negligence. The authors of the Newsweek article, he said, did not mention that statute during their conversations with him. Further, Mr. Warner said that he is considering re-instituting the softball tournament next year.

• [NEWSWEEK]  "Playgrounds all over the country have been stripped of monkey bars, jungle gyms, high slides and swings, seesaws and other old-fashioned equipment once popularized by President John F. Kennedy’s physical-fitness campaign. … But some experts say that new, supposedly safer equipment is actually more dangerous because risk-loving kids will test themselves by, for instance, climbing across the top of a swing set." [p. 44] 
• [NEWSWEEK]  "…the playgrounds and playing fields are an absolute [legal] war zone. [p. 49]

  Newsweek provides no examples from this alleged "war zone." However, checking Howard’s recent book, "The Collapse of the Common Good," reveals that his lead example showing that people don’t exercise common sense because of lawsuit anxiety is the story of the cherished double slide.
  In the lead example of people not exercising common sense because of lawsuit anxiety, Howard tells the story of the double slide at the City Park in Oologah, Oklahoma. After 50 years of providing fun and recreation for the area’s children it seems one unattended child fell from the slide and suffered minor injuries. The child’s parents made a claim against the city and the town board then decided it had no choice but to get rid of the much- loved double slide. Howard fails to disclose additional pertinent details, such as whether there was a history of previous injuries, or whether the slide, after 50 years of use, had fallen into dangerous disrepair. He mentions only that the child’s parents made a claim. Did Howard intend to deliberately mislead us or was he not aware that an existing statute, the Oklahoma Recreational Land Use Act (RLUA), protects landowners from liability lawsuits by those injured while making recreational use of the premises.²
  In 1981, the Consumer Product Safety Commission (CPSC) issued its first "Handbook for Public Playground Safety, which has become "the state-of-the-art" source for playground design. ³ The preface of the current edition of the guidelines reminds us:
  "Playgrounds are a fundamental part of the childhood experience. They should be safe havens for children. All of us have memories of playing on playgrounds in our neighborhood park and at recess in the schoolyard. Unfortunately, more than 200,000 children are treated in U.S. hospital emergency rooms each year for injuries associated with playground equipment. Most injuries occur when children fall from the equipment onto the ground. Many of these injuries can be prevented. To address the issue of falls, these guidelines emphasize the importance of protective surfacing around playground equipment."
  Again, without documentation, Newsweek (p. 44) writes, "some experts say that new, supposedly safer equipment is actually more dangerous because risk- loving kids will test themselves by, for instance, climbing across the top of a swing set." This assertion that modern-day playgrounds are more dangerous defies common sense. As anyone with children or grandchildren knows, today’s parks are safer and more child- friendly than ever before. Incidentally, they are also much more challenging, interesting and fun for the children. The new shapes and materials (castles, pirate ships, climbing walls, soft surfaces, recycled materials, rounded edges, etc.) are all designed with the safety of the child in mind.

• [NEWSWEEK]  "(In California recently, a couple won a $70 million judgment against Stanford University Hospital and two other health-care centers for failing to prevent their child from becoming disabled by a rare birth condition.)" [p. 47]

  Newsweek ignored the case facts. The jury awarded this judgment to the family of 9-year-old Michael Cook. Michael was born with the rare metabolic disorder phenylketonuria (PKU), which prevents certain amino acids from being properly metabolized. According to medical experts, the disorder occurs once every 10,000 to 15,000 births and can be detected by a test that is required by law for all newborns. If diagnosed early, it can usually be controlled with a low-protein diet."⁴ The medical standard of practice is to test newborns about 24 hours after birth, but Michael’s test was conducted too early, only four hours after birth. Medical experts testifying at the trial stated that if the test had been performed as required by the standard, it would have detected Michael’s condition, and he could have gone on to lead a healthy life. Instead, Michael was not diagnosed until he was six years old, after the disease had permanently impaired him. Michael’s doctors testified that he now functions at a three-year-old level, is fed through a tube, and will never be able to work or live on his own.⁵
  Newsweek failed to reveal the true cost of the judgment. The jury awarded $56.3 million to cover the costs of future medical and attendant services, special education and rehabilitative care. Since Michael will never be able to work, $14.1 million was awarded to cover the loss of future earnings. The jury awarded only $500,000 in punitive damages, and the family can collect only half of this because California law caps non-economic damages at $250,000. Since this was a structured judgment rather than lump sum payment, with periodic payments over Michael’s lifetime, the present value of the award was only $8.3 million ($6.3 million for medical expenses and $1.8 million for lost wages) – the cost to purchase an annuity to provide the payments to Michael over his lifetime.

• [NEWSWEEK]  "School boards now fear that parents will sue for anything. In Kentucky, a mother sued her daughter’s school after the girl had performed oral sex on a boy during a school bus-ride returning from a marching band contest. The woman blamed poor adult supervision, saying her daughter had been forced. If the case goes badly for the school system, such trips could be jeopardized." [p. 49]

  Newsweek implied that the girl had consensual sex on a school bus and still sued the school. According to an article in the Lexington Herald, after a hearing, the Board of Education ruled that the young girl was, in fact, a victim. Her only crime, it appears, was her failure to report the assault and, for that, she was suspended for two days.⁶
  Newsweek failed to disclose the purpose of the lawsuit. Instead of suing to hit the "jackpot," as implied in the article, the girl’s mother specifically disavowed any claim for money damages. The suit alleges that the school has a duty to protect children and failed to properly chaperone the field trip. The suit demands that the Board of Education set up a training course to instruct employees on sexual assault, predators and victims. The case is scheduled for trial on July 26, 2004. ⁷
  Newsweek failed to disclose that the lawsuit was filed only after the parent exhausted her school remedies without obtaining the relief requested. Before the lawsuit was filed, there was an investigation led by the school principal that incorrectly concluded the sexual act had been consensual. That was followed by an appeal to the Board of Education, which reversed and found that there had been no consent. Only when the Board failed to make the necessary changes, did the mother sue. This example also demonstrates that administrative remedies – the solution to "lawsuit hell" proposed by Howard and Taylor – often are not a reasonable alternative to our legal system...

5. Stephanie Mencimer writes the following in Washington Monthly (bold text is my emphasis) and points out how Time, like Newsweek produced terribly flawed reports promoting irrational fear. I recommend you read the whole article.

When he went out on strike last January, Dr. Robert Zaleski had his 15 minutes of fame. The Wheeling, W. Va., orthopedic surgeon was one of two dozen surgeons to walk off the job in January to protest his state's high costs of malpractice insurance. Arguing that "frivolous lawsuits" were driving up insurance premiums and forcing physicians to leave the state, Zaleski and his colleagues threatened to stay out for 30 days unless the legislature passed a bill that would cap non-economic damages in such suits at $250,000. As the walkout turned into a national story, Zaleski became one of its most visible faces, making the rounds of TV news shows and telling CNN, "I would certainly jump in front of a bus if I could to continue to serve my patients as I have for 23 years." Just a few weeks later, Zaleski's mug shot appeared with those of five other doctors in The New York Times Magazine, where he claimed to be "on the brink" of moving out of state because of high insurance rates and lawsuits.
Zaleski and his colleagues are the leading edge of a much broader movement. All across the country, doctors like him are telling reporters, legislators, and even their patients that frivolous lawsuits are driving up insurance costs and driving doctors out of practice and out of state, threatening access to care. They've mobilized around state legislation to limit malpractice lawsuits and linked arms with President Bush and Republicans in Congress who have been pushing similar bills in Washington. Indeed, Zaleski himself was even personally invited to attend a speech President Bush delivered in Scranton, Pa., where he railed against the threat to patient care posed by out-of-control lawsuits.
Upon closer inspection, however, it appears that Zaleski may be more a source of the problem than a victim of it. Between 1987 and 2002, according to the West Virginia Board of Medicine, patients filed 14 lawsuits against Zaleski, eight of which resulted in payouts that together came to $1.7 million. By contrast, according to a Public Citizen study, only 1 percent of the state's doctors made five or more malpractice payouts over the past decade. And while Zaleski says the settlement figures are misleading because they also include defense costs, his record is hardly squeaky clean. In a 1985 lawsuit (one not among the 14 reported to the Board of Medicine), he admitted in a deposition to being addicted to prescription painkillers for a substantial part of the time that he was operating on people in the early 1980s. Not only was he a drug addict, but to maintain his Percodan habit, Zaleski allegedly wrote prescriptions for other local addicts, who filled them and kicked back some pills to the doctor, according to court documents that include copies of the prescriptions and depositions from some of the addicts.
Yet even though a suspicious police officer reported him to the state medical board, Zaleski was never disciplined by his fellow physicians. (He says he does not remember the specifics of the case, and while he acknowledges a past substance-abuse problem, insists that he has been clean and sober for 21 years.) Given this history, the real scandal may not be how high Zaleski's insurance premiums are, but the fact that he can get insurance at all. Zaleski's malpractice record may have been extreme, but it was not unusual among the doctors who walked out of West Virginia hospitals in January. According to a Charleston Gazette report, nine of the 18 doctors striking at Wheeling Hospital, including Zaleski, had cost their insurers more than $6 million in malpractice settlements and judgments. At least some of the suits don't seem to merit the adjective "frivolous." In one case, a doctor had left a clip on an artery, eventually forcing the patient to have a liver transplant. In another, a surgeon cut into his patient's stomach wall during surgery, causing a massive, fatal infection. Indeed, a number of those doctors leading the protest movement include former drug addicts, felons, doctors whose licenses have been revoked, and many, many others who get sued a lot--and far more than most of their colleagues.
...But even the respected General Accounting Office (GAO) has recently concluded that there's little evidence to back the striking doctors' main claim, which is that lawsuits are forcing many of them to abandon the practice of medicine or to avoid high-risk procedures. And while there's no doubt that malpractice insurance is getting more expensive across the board--about 30 to 40 percent, on average, during the last three years--this increase is largely due to the ailing stock market and poor business practices in a virtually unregulated industry. As a result, there's no reason to think that capping jury awards would bring premiums down, a fact the insurance industry itself acknowledges. Robert E. White Jr., president of First Professional Insurance Company, the leading medical malpractice insurer in Florida, told the Palm Beach Post in January, "No responsible insurer can cut its rates after a [medical malpractice] bill passes." The one surefire way to bring down the number of big-payout lawsuits is to reduce the number of those doctors who inspire most of them. But state medical boards--which are run by doctors--have been notoriously reluctant to aggressively police their own.
The doctors' protests aren't about good policy. They're about good politics. Although the malpractice strikes look like a natural outgrowth of physician frustration, they are, in fact, the product of a sophisticated lobbying campaign coordinated by Republican operatives and underwritten by business groups with little interest in the practice of medicine. GOP leaders view malpractice lawsuits as a pivotal issue for the 2004 campaign. With health-care costs skyrocketing on its watch, the GOP is eager to shift blame onto the Democrats, who have long enjoyed greater public trust on the issue. And doctors, who enjoy great credibility among voters, are the key. By linking rising health-care costs to frivolous medical lawsuits, Republicans can use doctors as a cudgel against trial lawyers, the Democratic Party's second-largest funding base and one which could be paralyzed by lawsuit caps.
...
While the jury verdicts aren't nearly as outrageous as the doctors make them out to be, there have been a few whoppers in Ohio County--albeit usually in cases involving egregious malpractice--and these seem to be what really riled the doctors. The case that really sticks in their craw is that of Dr. Fred Payne. Like his colleague Robert Zaleski, Payne had been sued a dozen times over the past decade, and had paid out settlements of at least $7.3 million, according to the Charleston Gazette. In 1998, Payne operated to repair a minor spine injury on a spry 76-year-old World War II veteran who had fallen out of a tree. On his way to the operating room, he ran into a medical-equipment salesman who encouraged him to try out a new type of clamp. The patient hadn't consented to the procedure, nor had Payne ever even seen the tool used or studied its use; but he tried it out anyway. After Payne left the hospital, a nurse paged him to let him know that the patient wasn't doing well in recovery. An examination found that the clamp had slipped into the spinal canal and paralyzed the man from the neck down--a hideously worse injury than he had initially sustained. He died a year later. A lawsuit over the case, which charged that the man didn't even need surgery in the first place, was settled for $4.6 million.
The Ohio Valley Medical Center agreed to pay $3.5 million of the settlement, but insisted that Payne was responsible for the rest. But Payne's minimal insurance didn't cover the balance, so the judge on the case, Fred Risovich II, insisted that he use his personal assets to pay his share of the settlement, a rare move in a malpractice case. "The negligence was so gross, and the injury so bad that justice required that he pay something," says Risovich. Payne has not practiced medicine since.
Doctors in Wheeling had not been particularly politically active before this, but they were outraged by the case--not by Payne's behavior, but by Risovich's. The doctors organized to oust him in a nasty campaign that would foreshadow the tenor of the battle over malpractice suit caps two years later.
...
Just as the doctors were becoming politically energized, the malpractice insurance industry went into a financial tailspin. St. Paul Companies, once the nation's largest malpractice insurance firm, pulled out of West Virginia and other states in 2001, leaving 1,000 West Virginia doctors without insurance. Doctors in Charleston--apparently not averse to lawsuits when these suit their own purposes--filed a class action against the company, alleging that St. Paul stiffed the doctors after pursuing a business strategy designed to enrich top executives with more than $45 million in bonuses, salaries, and stock options. The suit alleged that St. Paul raided $1.1 billion in reserved doctors' premiums to artificially inflate its earnings in 1999 and 2000, a move that helped executives to $5.2 million in bonuses and increased the value of their stock options to $28 million.
Despite evidence of insurance company shenanigans, though, doctors put the blame for their insurance woes on trial lawyers, malpractice suits, and juries. They had some help in staying focused: Between 1995 and 2001, Medical Assurance, a large company which provided medical malpractice insurance to doctors to cover their legal costs and damages in lawsuits, paid the state medical association at least $115,000 to lobby on the company's behalf, according to a story in the Charleston Gazette by Lawrence Messina. Medical Assurance offered members breaks on their insurance premiums for attending "White Coat Day" at the legislature and provided the glossy brochures and information on "meritless lawsuits" and "outrageous" damage awards that doctors used in their talking points with reporters and elected officials.
Similarly, the PR materials on "lawsuit abuse" and patient petitions that began to fill doctors' offices last year came from the West Virginia Care Coalition; the coalition was actually a project of Maple Creative, a Charleston-based PR firm with close ties to the Bush administration. Those groups footing the bill for Maple's services included, not surprisingly, several with a direct stake in medical issues.
...
All in all, claims about a "lawsuit abuse crisis" proved remarkably effective in West Virginia--and resistant to contradictory evidence. In February 2001, responding to the doctors' allegations, the Charleston Gazette undertook a computer-assisted analysis of more than 2,000 medical malpractice claims reported to the West Virginia Board of Medicine. The paper determined that far from being in a state of crisis, West Virginia ranked 35th in the country for median malpractice payouts. The paper also found that both the number of malpractice claims and the dollar amounts of the settlements and verdicts had actually declined between 1993 and 2001. Nor was West Virginia suffering under an epidemic of "disappearing doctors." Last August, the Gazette's Messina attended a rally at which the West Virginia medical society set out 37 empty chairs labeled with the names of local doctors who supposedly had been forced out of practice because of insurance costs. He discovered that at least two of the doctors named were indeed not practicing--because they were dead. Another two were still actually treating Wheeling patients. A Public Citizen study of the state medical board records later found that the number of doctors in West Virginia increased by more than 350 between 1997 and 2002.
This fall, the GAO reached a similar conclusion: of five states identified by the American Medical Association (AMA) as malpractice "crisis" states, including West Virginia, it found that "many of the reported provider actions taken in response to malpractice pressures were not substantiated or did not widely affect access to health care … some reports of physicians relocating to other states, retiring, or closing practices were not accurate or involved relatively few physicians." Nor, in those same states, could the GAO "identify any major reductions in the utilization of certain services some physicians reported reducing because they consider the services to be high risk."
...
Rep. Shelley Moore Capito (R-W.Va.), a close confidant of White House adviser Karl Rove, personally escorted a West Virginia doctor named Dr. Samuel Roberts to the House floor to testify. Roberts, one of only three doctors who testified, told the committee that he could not afford the insurance to continue delivering babies, and claimed that this year, "I will have to stop, leaving seven counties around me with no family physician delivering prenatal or maternity care."
As with so much of the malpractice campaign, Roberts's testimony omitted some critical facts that might have explained some of his insurance woes: In 1987, he pleaded guilty to five counts of cocaine possession and was sentenced to five years probation, according to the Charleston Gazette. In response, the state suspended his medical license for a year, though it later reduced the penalty to five years of supervised probation. (Incidentally, a year after his dire warnings to Congress, Roberts is today still delivering babies, according to his office.)
...
It's worth noting that the walkouts would never have proved so effective had the media taken a closer look at the doctors involved--and the interests backing them. Aside from a few skeptical reporters in West Virginia, most of the press has taken the doctors' claims at face value, rarely challenging their evidence and anecdotes. In June, for instance, Time magazine devoted an entire cover story to "disappearing doctors," complete with data supplied by the AMA--the same data that previously had been challenged by consumer groups around the country and later was authoritatively debunked by the GAO. Reporters have also abetted the campaign by portraying wealthy doctors as the impoverished victims of "lawsuit abuse" and the often poor and injured plaintiffs as the greedy pawns of billionaire trial lawyers. Yet as with the AMA's data, that image doesn't hold up under inspection.
Take Dr. Rajai Khoury, a striking Wheeling cardiovascular surgeon who told a local TV news interviewer in January, "We're hurting, our patients are hurting, the community is suffering." It's no secret in Wheeling that Khoury recently built a 12,000-foot mansion with a five-car garage, a pool, and a lovely view of the countryside from "Pill Hill," the ritzy neighborhood that's home to many doctors. (According to county building records, the house is valued at close to $3 million, in a town where houses go for as little as $19,000.) Even Zaleski seems to be doing pretty well, despite his claims on television. He says his malpractice insurance of $150,000 a year is about 30 percent of his income, which would net him $300,000 annually. "I'm not starving," he admits.
Dr. Greg Saracco, the telegenic surgeon who became the unofficial spokesman for the Wheeling walkout, defends his profession, saying, "I don't think it's really an issue how much a doctor makes. Who says we have to do this for free?" In an interview, Saracco rails against the "outrageous jury awards" given in Wheeling, offering the story of a local man who violated company rules and safety guidelines on the job and used a broomstick to unstick some kind of machine, which then cut his arm off. Saracco says the man then sued the company for safety violations, and a jury awarded him $4 million for his stupidity.
"Is somebody's arm worth $4 million?" he says with amazement. Alas, the story may be apocryphal, as many "frivolous lawsuit" stories often are. Verdicts over $1 million are rare in West Virginia (there were none last year), and none of the trial lawyers I spoke with in Wheeling could recall such a case. They suggest Saracco may be confusing it with a similar case--lost leg, not arm--but the suit was against an insurance company, a very different issue.
When asked whether he's ever been sued, Saracco says he just settled a "crappola" suit for $25,000. In that "crappola" suit, James Westfall, a man in his mid-50s, came into the hospital for a hernia repair surgery, performed by Saracco and his partner, Dr. Robert Cross. According to the lawsuit, during surgery, Saracco pierced Westfall's bowel while stitching him up and sewed it into his abdomen. The wound closure later tore and created a hole in Westfall's bowel, causing it to leak. Cross failed to respond to nurses' reports of complications until Westfall was in critical condition--too late, as it turned out. Westfall died a miserable death two days later. The lawsuit was ultimately settled with Cross and the hospital for well over a million dollars...

6. Kevin Drum (Calpundit) points out another important aspect of how media contribute to misconceptions about huge jury awards. 

And while we're on the subject of torts, remember that $28 billion verdict in a local Orange County smoking suit against Philip Morris? That was only two months ago and the award has already been slashed to $28 million. That's a 99.9% cut.
This is pretty typical of "runaway jury" awards and highlights one of the problems with media coverage of court cases. The original verdict was widely covered and got front page treatment, but the reduction is likely to be either completely ignored or else buried on an inside page. And so the urban legend of the $28 billion smoking award will take on the status of urban fact.
The appeal, of course, is yet to come, and will probably see the award either thrown out or else reduced yet again. But that probably won't even rate a wire service dispatch, let alone the front page.

II. LAWSUIT "EXPLOSION" AND MASSIVE/HUGE PUNITIVE AWARDS and COSTS - FACT OR FICTION?

1. Public Citizen recently responded to a woefully researched, fear-mongering Newsweek article that spread more myths. Some extracts:

Newsweek’s Dec. 15 cover story entitled "Lawsuit Hell/Civil Wars" is a one-sided diatribe masquerading as investigative journalism...The article reads like tabloid journalism – designed to excite and sell magazines rather than inform. It pushes readers’ emotional buttons rather than providing balanced analysis that informs the public about a critical policy issue...
In adding a partnership with NBC for week- long broadcast tie- ins and on- line chats, including one with the lead author and lawsuit "victims" described in the article, Newsweek has gone beyond advocacy journalism to crusade against consumers’ access to the courts – a crusade without precedent even among news outlets with overt conservative leanings..
From a journalistic point of view, the article suffers from major reporting deficiencies, including an extreme lack of due diligence. The article includes:

• Many false and exaggerated anecdotes that present an unbalanced and negative caricature of the legal system.

• Major factual inaccuracies about the legal system and lawsuits.

• Proposed solutions that have no basis in experience.

Finally, the article’s lead author, Stuart Taylor Jr., a commentator rather than a news reporter, is heavily biased towards business interests on tort issues and has a history of advocacy on this issue. His viewpoints, which rely largely on corporate lawyer Philip K. Howard and his book, "The Collapse of the Common Good," should have been relegated to a column...
Newsweek has fallen hook, line and sinker for the myths and distortions spread by a well-organized campaign funded by the American Medical Association, insurers, tobacco companies, auto manufacturers and others to strip consumers – but, notably, not businesses – of their legal rights...

 

Newsweek’s Article Contains Major Factual Inaccuracies About the Legal System and Lawsuits
The article made numerous factual assertions that portrayed the legal system in a very negative light and added credibility to the outrageous claims being made by the authors. No sources were given for the claims. For good reason – they are erroneous.

• [NEWSWEEK] "And the ‘litigation explosion’ of the past 30 years may be leveling off…" [p. 45] 

Tort filings in state courts were down from 1992-2001: 
The National Center for State Courts has done a study of filings in state courts from 1992-2001, which found:

• In the 30 states that keep track of such data, whose populations comprise 74 percent of the U.S. total, tort filings were down 9 percent.⁸ 

• In the 17 states that keep track of such data, whose populations comprise 53 percent of the U.S. total, automobile filings were down 14 percent.⁹ 

• Automobile filings comprised 60 percent of the tort filings in 2001. ¹⁰ 

• In the nine states that kept track of such data from 1992 and the 17 that kept track since 1997, medical malpractice filings were down 1 percent adjusted for population growth (there are increases without adjusting for population growth).¹¹ 

Tort filings in federal courts are down: 
The Federal Judicial Caseload Statistics, kept by the Administrative Office of the U.S. Courts, show downward trends in both personal injury and civil filings from 1998-2002.

• Civil cases filed in federal court were down 5.4 percent from 1998-2002. ¹² 

• Personal injury cases declined as a portion of civil cases from 21.2 percent in 1998 to 18.3 percent in 2002. ¹³ 

• [NEWSWEEK]  "The cost to society cannot be measured just in money, though the bill is enormous, an estimated $200 billion a year, more than half of it for legal fees and costs that could be used to hire more police or firefighters or teachers…" [p. 45]

This estimate comes from a study by an insurance industry consulting firm, Tillinghast-Towers Perrin, which estimated that in 2001 the "cost" of the U.S. tort system was $205 billion. ¹⁴ Such an analysis is highly misleading for several reasons. First, 35 percent of this study’s puffed-up cost estimate are for insurance industry overhead (21 percent) and defense costs (14 percent). Much of this insurance overhead would exist anyway because it is unrelated to lawsuits (setting rates, administering policies, marketing, profit taking, etc.) or is a result of negligence by insurance companies’ clients.
Second, 46 percent of the "costs" are for payments made to injured plaintiffs for lost wages, medical care, and pain and suffering. These costs are the result of injuries caused by defendants and would be borne by society anyway either through government programs, charities or absorbed by the victims and their families and friends. Recently, the Congressional Budget Office (CBO) suggested that these "transfer payments" to compensate victims are not in fact "costs" because they "do not involve any use of resources to produce goods or services."¹⁵ By mischaracterizing compensation as costs, Tillinghast inflated by nearly double its sensational $205 billion estimate, providing the raw material for a misleading public relations campaign on a so-called "tort tax. 
Finally, Tillinghast acknowledges that the tort system provides indirect benefits to society that are not measured in the study. These include acting as a deterrent to unsafe practices and products.¹⁶ While we don’t encourage a monetaristic view of this issue, it’s quite likely that the benefits of lawsuits – in terms of forcing changes to defective products and making professionals alter their harmful actions – result in much larger savings (in terms of lives saved and injuries prevented) than the tort system costs. This prevention argument is best illustrated by a recent study by the Bush White House examining the costs and benefits of 107 federal regulations – primarily health, safety and environmental protections – covering a 10-year period. The analysis found that: "The estimated total annual quantified benefits of these rules range from $146 billion to $230 billion, while the estimated total annual quantified costs range from $36 billion to $42 billion."¹⁷ 

• [NEWSWEEK]  "…according to one estimate, doctors waste $50 billion to $100 billion on ‘defensive medicine’…" [p. 48]

The source of this research was a 1996 study by Mark McClellan – a Bush administration economic advisor in 2001 and now head of the U.S. Food and Drug Administration. Both the General Accounting Office (GAO) and the Congressional Budget Office have derided his assertions. Although the study found that tort law changes could deliver 5 to 9 percent in savings on defensive medicine, the GAO noted that "this study did not control for other factors that can affect hospital costs, such as the extent of managed care penetration in different areas. When controlling for managed care penetration in a 2000 follow- up study, the same researchers found that the reductions in hospital expenditures attributable to direct tort law changes dropped to about 4 percent. Moreover, preliminary findings from a 2003 study [by CBO] that replicated and expanded the scope of these studies to include Medicare patients treated for a broader set of conditions failed to find any impact of state tort laws on medical spending."18
When CBO replicated and expanded the study in 2003, its results contradicted McClellan’s 1996 study: "CBO found no effect of tort controls on medical spending in an analysis that considered a broader set of ailments. Moreover, using a different data set, CBO could find no statistically significant difference in per capita health care spending between states with and without malpractice tort limits. …A few studies have observed reductions in health care spending correlated with changes in tort law, but that research was based largely on a narrow part of the population and considered only spending for a small number of ailments."¹⁹ 
"Malpractice costs account for a very small fraction of total health care spending; even a very large reduction in malpractice costs would have a relatively small effect on total health plan premiums. In addition, some of the savings leading to lower medical malpractice premiums – those savings arising from changes in the treatment of collateral-source benefits – would represent a shift in costs from medical malpractice insurance to health insurance."²⁰ 

• [NEWSWEEK]  "Various studies have shown that the vast majority of medical errors go undetected by patients and that nine out of 10 are never compensated. (And when patients do sue, their malpractice allegations are unfounded in as many as 80 percent of the cases, other studies suggest; [medical malpractice] insurance companies pay to settle the vast majority of claims anyway, rather than risk a big hit.)" [p. 48]

We agree that most medical errors go undetected by patients and that too few patients are ever compensated. If anything, such conditions require strengthening the civil justice system, not taking away patients’ legal rights as Howard proposes. 
With regard to whether malpractice allegations are unfounded, in a study of closed medical malpractice claims, University of Washington Medical School researchers found no settlements paid or damages awarded in "cases in which there were no significant deviations from prevailing standards of care. For those cases in which payments were made, there was general consensus among insurance company staff, medical experts, defense attorneys and the physician defendants that some lapse in the standard of care contributed to the outcome."²¹
With regard to the claim that insurance companies pay to settle the vast majority of claims, insurance industry data refute such a claim. According to the Physician Insurers Association of America (PIAA), which through 60 member insurance companies covers 60 percent of America’s private practice physicians,²² only 33 percent of claims are paid. This figure is readily ascertainable by reading PIAA’s testimony before Congress earlier this year.²³ 
When Professor Neal Vidmar, who is at the North Carolina Medical Malpractice Project at Duke University Law School, performed a study of medical malpractice lawsuits he found that, "In interviews with liability insurers that I undertook, the most consistent theme from them was: ‘We do not settle frivolous cases!’ . . . [Insurers’] policy on frivolous cases is based on the belief that if they ever begin to settle cases just to make them go away, their credibility will be destroyed and this will encourage more litigation."²⁴ 

2. Dwight Meredith (P.L.A.), quoting Calpundit, has the following perspective to offer (bold text is my emphasis):

As part of his analysis, Kevin linked to data from the National Practitioner Data Bank. That data bank contains information about payouts in medical malpractice cases (including payouts for judgments as well as settlements) broken out by year and state...
According to the National Practitioner Data Bank, there were 15,304 medical malpractice claims that resulted in payment to the plaintiff either through settlement or judgment in 2002. The total of all those payments was approximately $4.2 billion with a mean payout (the sum of all payments divided by the number of payments) of $275,000 and a median payout (the number at which there are an equal number of payments above and below the figure) of $150,000. The $4.2 billion figure includes all of the payments to the victims of medical malpractice and includes all amounts paid for medical expenses, lost earnings, pain and suffering and punitive damages.
I thought that those numbers needed to be placed in some perspective:

• The amount of medical malpractice payouts in 2002 would have paid interest on the national debt for about eight days.

• I am writing this on Sunday. By Thursday, the Federal Government’s deficit will have increased by more than the total payments to medical malpractice plaintiffs for the entire year of 2002.

• According to the Census, there are approximately 280,000,000 Americans. The cost of all payments in medical malpractice cases comes to about $15 per American per year.

• According to HealthAffairs.com, the per capita cost of health care in the United States is $4,631. Payments to medical malpractice plaintiffs amounts to three-tenths of one percent of that cost.

• The total amount of payments to medical malpractice plaintiffs is roughly the same as the yearly sales of Estee Lauder. We await the Time Magazine cover proclaiming that “we have a make-up crisis in America.”

• According to MSNBC, in 2001 the tobacco companies spent $11.2 billion on advertising and promotion of tobacco products. That is almost three times the amount paid to medical malpractice plaintiffs in 2002.

• There are about 700,000 medical doctors in the United States. In 2002, approximately one doctor in 46 made a payment to a medical malpractice plaintiff. The total cost of all payments made to medical malpractice plaintiffs in 2002 comes to about $6,000 per doctor.

• The amount paid on medical malpractice claims in 2002 was approximately five times the amount Americans spend on Cheerios in a year.

• The amount spent on medical malpractice settlements and judgments is approximately one-sixth of the amount spent worldwide on dog and cat food.

• $4.2 billion is less than a week of sales at Walmart.

• Next season, the minimum salary for an NBA player with one year’s experience will be more than twice the average payout in a 2002 medical malpractice case.

• When a local Ohio car dealership ran a newspaper ad with a thumbnail-sized picture of Arnold Schwarzenegger without the actor’s permission, the Terminator sued claiming he had been damaged in an amount equal to the average payout for 80 medical malpractice victims. Link via Jim Capozzola.

• Although Tenet Healthcare performed poorly last year, its CEO, Jeffrey Barbakow received compensation roughly equal to the payout for more than 450 victims of medical malpractice.

• Bill Gates owns 1,209,713,228 shares of Microsoft. MSFT closed at $24.65 last Friday. Since its 52 week low of $20.71, Bill Gates’ net worth has increased by more than the cost of all payments made to medical malpractice plaintiffs in 2002.

None of the above is intended to imply that the medical malpractice system does not need reform or that real problems of insurance availability and outrageous insurance premium increases do not exist.
The problem, however, is not of a size to be unmanageable. The Federal Government deals with issues involving hundreds of billions of dollars all the time. Before we all go into serious panic mode about medical malpractice reform, please remember that, as a matter of dollars, it is a problem of about the same magnitude as the value of the make-up sold by Estee Lauder in a year.

3. Dwight Meredith (Wampum) makes another very pertinent point on the topic of malpractice award payouts.

In Scare Tactics, I argued that the media and the tort reform lobby had used scare tactics to blow the issue of tort reform way out of perspective. Those tactics include the use of inaccurate anecdotes and outright misrepresentation to present a picture of the tort system that is downright scary. It is little wonder that many people think the civil justice system is out of control when they are constantly bombarded with inaccurate information about the results of that system.
In comments, Jane Galt of Asymmetrical Information took exception to my post...
When discussing tort reform, and particularly medical malpractice reform, it is helpful to know the size of the problem. How much money is paid out each year in medical malpractice judgments and settlements? That would seem to be a basic fact that needs to be established at the beginning of a public policy debate. After all, if we do not know the size of a problem, how can we ever decide on a solution?
The tort reform lobby and the scare tactic media almost never report that basic fact. If you do not believe me, go to Google News or Google and try to find the answer...
In my post, I noted that medical malpractice payments total a little over $4.2 billion per year. As I have previously noted, the total of all sums paid out in medical malpractice settlements and judgments is approximately the same as Estee Lauder’s sales of makeup. The total of payments in 2002 would have paid interest on the national debt for about eight days.
Jane Galt thought that I was spinning that number by including payments made pursuant to judgments but not including settlements. Jane wrote:

It's much like, for example, choosing a dollar figure for litigation costs that includes only verdicts, when something like 95% of cases settle out of court.

Jane, apparently, thinks that $4.2 billion per year is the amount paid out in medical malpractice judgments and that additional amounts are paid out in settlements.
The amount of money paid out in medical malpractice cases is not a matter of opinion. It is a fact. Was my figure of $4.2 billion accurate or is Jane correct that I was just trying to spin the debate by failing to include the amounts paid in settlements?
Federal law requires that payments in medical malpractice cases be reported to the National Practitioners Data Bank. Let me emphasis that the NPDB collects data on all payments in medical malpractice cases including both judgments and settlements.
Last summer, Kevin Drum posted the NPDB information on payments for the period from 1990 through 2002. (Thanks Kevin). That data can be found here.
For the year 2002, the total of all payments (in 2002 dollars) made pursuant to medical malpractice judgments was $228,726,987. Jane thought that number was approximately $4 billion. She was off in her reckoning by more than a factor of sixteen.
The total of all payments made in 2002 pursuant to med mal settlements was $3,981,304,551. The total of both judgments and settlements was $4,210,031,538 which, of course, is where the reference in my post to “a little over $4 billion per year” came from...
If the public knew that the payouts in medical malpractice suits is about one tenth of the cost to the public of farm subsidies (including both direct payments and higher food prices), the tort reform movement could lose a lot of steam...

4. Via Dwight Meredith (P.L.A), here is Off The Kuff:

Oh, and if you think that there are plenty of other cases that show abuse of the system even if this one isn't so bad, think again:

Huge punitive damage awards, for example, have become everyday events, right? Actually, a study of courts in the nation's 75 largest counties conducted by the National Center for State Courts found that only 364 of 762,000 cases ended in punitive damages, or 0.047 percent.
OK, but isn't it true that more and more liability claims are filed every year? Actually, a study of 16 states by the same center showed that the number of liability suits has declined by 9 percent since 1986.

As with many things, the facts often belie the hype. Don't you believe it.

III. CAN LAWSUITS BE DETERRED/REDUCED WITHOUT DAMAGE CAPS - FACT v. FICTION?

1. As Dwight Meredith (P.L.A.) also says here: 

The 1993 Supreme Court decision in Daubert v. Merrell Dow Pharmaceuticals, Inc went a long way to prevent the presentation of junk science to a jury. Daubert requires, in Federal Courts, that the judge make in independent determination that any proposed expert testimony “both rests on a reliable foundation and is relevant to the task at hand.”
Prior to allowing expert testimony to be heard by the jury, the judge must first find that expert testimony’s

underlying reasoning or methodology is scientifically valid and properly can be applied to the facts at issue. Many considerations will bear on the inquiry, including whether the theory or technique in question can be (and has been) tested, whether it has been subjected to peer review and publication, its known or potential error rate, and the existence and maintenance of standards controlling its operation, and whether it has attracted widespread acceptance within a relevant scientific community.

The adoption of the Daubert standard in state courts would go a long way to ensuring that junk science has no place in the courtroom.
Under one Georgia statute, OCGA 9-11-9.1, no malpractice suit may be filed unless accompanied by an affidavit from a physician who has reviewed the case and determined that a violation of the standard of care occurred. Any malpractice suit filed without a doctor testifying that the defendant is negligent is subject to automatic dismissal. Requiring a doctor to testify to the negligence of another doctor before a suit is filed addresses the problem of frivolous suits directly.
Georgia also seeks to punish lawyers and litigants who file frivolous suits. In Georgia, a defendant in any civil litigation may bring ask the judge to sanction the other side for frivolous litigation. The sanction is an award of his or her attorney fees and litigation expenses against either the opposing party, the opposing lawyer or both.
The trial court is required to award such sanctions if “there existed such a complete absence of any justiciable issue of law or fact that it could not reasonably be believed that a court would accept the claim.” OCGA § 9-15-14(a).
In addition, the court may award attorney fees and litigation costs as a sanction if the court finds that the claim, or any part of the claim “lacked substantial justification” or was interposed for an improper purpose. OCGA § 9-15-14(b).
The defense attorney fees, expert witness fees and other litigation costs can be quite substantial in a medical malpractice case. Those provisions are not a form of “loser pays” in that the loser of a suit that had a sound factual basis but was not ultimately successful is not subject to sanction. Nonetheless, the threat of sanction can be a real deterrent to frivolous suits.
The tort reform argument based on a claim of an explosion of frivolous litigation has long been a Republican spin point. When closely analyzed, however, it is like Gertrude Stein’s description of Oakland. There is no there there.
The cases brought forth in support of the claim turn out to dismissed, fictitious or not frivolous at all. There is a Republican President and Republican control over both houses of Congress. If reforms that address the problems of frivolous litigation would actually accomplish the benefits that tort reformers profess to want, would not Mr. Bush have proposed such reforms?
Instead of proposing reforms that address frivolous litigation, Mr. Bush proposed to cap the damages for pain and suffering. The purpose of that proposal was not to limit frivolous suits but rather to make sure that people badly injured by medical malpractice to not receive full compensation for their injuries.

Dwight adds this in a subsequent post (bold text is my emphasis):

[The Daubert standard] has applied to all scientific evidence offered in the Federal Court system for the last decade. The loophole in the Daubert decision is that the rule applies only to cases brought in Federal Courts. Actions brought in the various state courts are not subject to the Daubert rule (unless an individual state adopts the rule).
If the administration is serious about curbing frivolous suits and if the tort reformers are right that the use of junk science permits frivolous suits to succeed, applying the Daubert rule to state court actions seems a logical step.

2. Dwight Meredith (P.L.A.) reports (bold text is my emphasis):

Ross of the Bloviator points us to this USA Today article. Apparently, some hospitals and insurers have adopted the highly unusual policy of actually telling the patient when a medical error has occurred:

Malpractice insurers' mantra is often ''deny and defend'' when a doctor or hospital is accused of a medical injury. But at least one insurer and several hospitals are trying a different tack, one that sounds a lot like ''I'm sorry.''
The Copic Cos., a Denver malpractice insurer, encourages its doctors to report incidents of medical injuries or complications. Within 72 hours, the insurer responds to the patient, offering to cover lost wages or medical costs resulting from the injuries.
And a number of hospitals, mainly in the Department of Veterans Affairs system, have ''honesty policies'' to encourage staff to admit to patients when errors are made. Instead of a rash of lawsuits, they are finding just the opposite: a drop in the number of claims and smaller payouts.

Lawsuits are a long, messy, expensive, and vituperative method of resolving disputes. The process of litigation imposes huge emotional costs on both sides of the dispute. Negotiation and mediation are far better ways of achieving a reasonable result with a minimum of financial and emotional transaction costs.
A major reason that many disputes are litigated instead of negotiated is a lack of trust on both sides...

3. Dwight Meredith (P.L.A.) also writes here:

A common sense solution to the problem of frivolous medical malpractice suits is simply to require that evidence of the defendant's negligence be produced before the filing of the suit.
John Edwards argues for one means of requiring evidence of negligence as a prerequisite to filing a medical malpractice suit:

Before a lawyer can bring a medical malpractice case to court, we should require that he or she swear that an expert doctor is ready to testify that real malpractice has occurred.

In Georgia, the General Assembly has already gone Edwards one better. Instead of having the lawyer simply verify that a doctor will, at some future date, testify as to the defendant's negligence, Georgia law requires such testimony be taken before the suit is filed...
If the purpose of tort reform is to actually reduce the number of frivolous suits, the proposal outlined above is a good first step. If the purpose of tort reform is simply to prevent insurance companies from having to pay full compensation to injured people, a cap on non-economic damages works better. Mr. Edwards proposes a policy to accomplish the former. President Bush proposes a policy to accomplish the later. Which of the two actually wants to reduce frivolous lawsuits?

Additionally, see his comments here.

4. Dwight Meredith (P.L.A.) has also written about the fact that a minority of doctors are responsible for a significant chunk of malpractice awards (bold text is my emphasis). Making it more difficult for such doctors to continue practicing would go a long way to reduce malpractice cases and payments. 

...let me first tell you the story of Dr. Dr. Merrimon Baker. That story is drawn from a Houston Chronicle article I located via Off The Kuff.
Dr. Baker is an orthopedic surgeon in Cleveland, Texas. Based on the story in the Chron, it is hard to avoid the conclusion that Baker is a very lousy doctor. Consider the following:
Dr. Baker “prescribed 15,000 tablets of Xanax and Darvon to a former intravenous drug user.”
His ex-wife has testified under oath that Dr. Baker was addicted to prescription drugs.
Dr. Baker once left a surgical sponge in a patient after an operation. That is a common and, perhaps understandable error. Dr. Baker, though, also once operated on the wrong hip of one of his patients. On another occasion he operated on the wrong leg.
It has been alleged that Dr. Baker performed an unnecessary operation on a patient’s ankle. The ankle became infected and eventually had to be amputated.
Then there is the case of Richardo Romero who was one of Dr. Baker’s patients.
The Chronicle reports:

In 1998, Ricardo Romero of Humble decided to undergo back surgery.
Romero, a 20-year employee of Houston Marine Services, had injured his back while moving a heavy hose. After 12 months of medication and therapy the problem wasn't better, so he opted for an operation.
He saw Baker's advertisement in the Yellow Pages and liked the fact that Baker was conveniently located at Columbia Kingwood Medical Center. When Romero met Baker, "He seemed pretty nice. He seemed to be knowing what he talked about."
On July 15, 1998, Dolores Romero kissed her husband goodbye before he was wheeled back for what she understood was an uncomplicated operation. Hours passed without word of her husband's progress. When Dolores Romero pressed hospital employees for news, they told her they didn't know anything.
What she later learned was that her husband had lost nearly all of the blood in his body during the operation. Blood for a transfusion was late in coming, and in the meantime his heart stopped beating. His brain, deprived of blood and oxygen, was severely and irreversibly damaged.

All in all, Dr. Baker had 12 allegations of malpractice asserted against him between 1988 and 1998.
Still, Dr. Baker practices medicine in Texas and continues to perform operations.
There can be no doubt that the actions of a small percentage of doctors result in a disproportionate amount of payouts in medical malpractice claims.
The Chron reports:

According to the federal government's National Practitioner Data Bank, 5 percent of physicians listed are responsible for nearly 33 percent of the total dollars paid for physicians in malpractice judgments or settlements from September 1990 to March 2003.

A policy that prevented the worst 5% of doctors from committing malpractice would greatly reduce the number of suits filed. It would lower the payouts and (to the extent that premium rates are effected by payouts) the cost of insurance. It would reduce the income of the trial lawyers while saving patients from much harm.
How could we prevent the bottom 5% of doctors from committing malpractice without violating their rights and creating additional litigation?
The process of revoking a doctor’s license to practice is long, difficult and could ultimately end in litigation.
Hospitals must be careful about denying privileges to doctors as well. In Dr. Baker’s case, two hospitals had denied him privileges but a third welcomed him anyway.
Charles Kuffner suggests a market solution (bold text is eRiposte emphasis):

One of the keys to a successful free market, as I've always understood it, is unfettered access to full information
...
As we see with the story of Dr. Baker, prospective customers have no good way to get the information they need to make their choice. How many patients do you think he would have if his record were easily available? Surely if Ricardo Romero had known, he would have chosen a different doctor for his surgery, and that $40 million jury verdict never would have happened.
I understand that there are privacy issues, and I understand that there are always problems with centralized databases of this sort, but I also understand that the cost of doing nothing is that the Dr. Bakers of the world will continue to practice medicine on an uninformed public. Everybody - patients, competent doctors, insurance companies - loses in that case. Yet here we are, pursuing new government regulation instead of looking for a way to make the free market more efficient. Aren't Republicans supposed to favor that sort of thing?

Making information on past performance of doctors available to the consumer has huge benefits. The doctors with very poor records will have difficulty attracting patients. That is as it should be.
Trial lawyers who earn money from prosecuting medical malpractice claims will lose their best source of new cases, doctors like Dr. Baker.
The major down side of that reform is that doctors fear that consumers will misuse the information. Doctors should put more trust in the free market. The publication of the information in the National Practitioners Data Bank is an idea whose time has come.

5. Stephanie Mencimer writes the following in Washington Monthly. I recommend you read the whole article.

Saracco suggests that most of the people who suffer from "malpractice" usually have themselves to blame, like obese people and the smokers he says are getting money from asbestos lawsuits. The solution, he insists, is a cap on jury awards like the one passed in California during the '70s--the law all the doctors' talking points refer to as proof of the efficacy of such caps. But Saracco and his fellow physicians have a short memory. California passed its law in 1976, after malpractice insurers, blaming out-of-control lawsuits, suddenly hiked doctors' premiums by more than 300 percent in a single year. Some years after the law took effect, insurance premiums had shown no sign of going down. California doctors ended up suing Travelers' Insurance Co., alleging that it grossly overcharged in the name of a non-existent malpractice crisis. (Here, too, the plantiff's bar came in handy: A trial lawyer won the doctors a $50 million refund.) The state ultimately passed strict insurance reform that kept a lid on future premium increases.
There are, however, other solutions that might help reduce insurance rates that Saracco and his colleagues never mention. Studies have repeatedly shown that only 5 percent of the nation's doctors are responsible for more than half of all malpractice payouts. Yet those lawsuit-magnet practitioners generally pay the same insurance rates as doctors who've never been sued, the equivalent of giving drunks the same car insurance rates as soccer moms with perfect driving records. This practice exists among malpractice insurers partly because many of them are owned by doctors themselves, but mostly because they make their money on investments, not on claims management. As a result, the insurers have an incentive to sign up as many doctors as possible so they can invest their premiums in the stock market--a strategy which ensured that, when the economy went south they would have to begin hiking premiums sharply. The use of experience rating, like that employed by auto insurers to weed out the dangerous drivers, would reward better doctors and price those who attract the most lawsuits out of business rather than subsidizing them.
Better regulation of health care would likely reduce the number of malpractice lawsuits simply by reducing the number of medical injuries. In 1999, the Institute of Medicine (IOM) reported that preventable medical errors kill as many as 100,000 people a year--and cause a tremendous number of lawsuits. The IOM recommended a national mandatory public error-reporting system, along with stronger requirements that doctors regularly upgrade their skills as a condition of maintaining their licenses. Error reporting would allow better data-mining that, in turn, would help the health-care industry combat mistakes more systematically by detecting problem areas and suggesting remedies. Research has already shown that surgeons who do a large volume of high-risk procedures such as bypass or delicate spine surgery make the fewest mistakes, since practice makes perfect. That's why the IOM also has recommended that such procedures be restricted only to experienced doctors at high-volume specialty facilities rather than letting any neurosurgeon in Wheeling, W. Va., try his hand at it now and then.
Yet striking doctors aren't advocating any of these proposals: Their organizational lobbyists have indeed vigorously fought such measures, even simple protocols such as marking surgical sites with a pen to avoid, say, amputating the wrong foot, as did a doctor in Florida in 1995. These days, the only solution that doctors seem to offer for any of the nation's myriad health care problems is limiting the patients' right to sue. And the Bush administration is just fine with that.

6. Dwight Meredith (P.L.A.) quotes Angry Bear to raise the point that the availability of better evidence can also reduce frivolous lawsuits:

Riffing off one of my tort reform posts, the Angry Bear has an excellent post analogizing part of the tort reform debate to scientific hypothesis testing:

There are two categories of errors in scientific hypothesis testing: a false negative (rejecting a true hypothesis), and a false positive (failing to reject a false hypothesis). These are called, respectively, Type I and Type II errors (there's a third, more widely committed error, the "Type III error", which is forgetting which error is Type I and which is Type II).
Limiting the scope of pursuable lawsuits will undoubtedly decrease the number of false positives (less unmeritorious lawsuits will be won), but it will come at the expense of more false negatives (lawsuits that should be filed and won because the claims are valid will not be filed and won). As statisticians well know, there's generally a tradeoff: as the odds of a false negative decrease (the "significance level" of the test increases), the odds of a false positive (the "â" of the test; 1-â is the "power" of a test) increase, and vice-versa.
Assuming sound statistical techniques are being employed, the only way to simultaneously decrease the probability of both types of errors is to add more observations.

The last point is an important one. It is possible to reduce the chances of non-meritorious suits being successful and the chances that meritorious suits will be unsuccessful if the legal equivalent of more observations can be obtained.
In the legal context, “more observations” means better evidence. If we can increase the reliability and availability of evidence, the result will be a more accurate and just court system.
The rise of DNA matching is a prime example of that phenomenon. In crimes in which the perpetrator leaves behind a DNA sample and in which the identity of the perpetrator is an important issue, the chance that an innocent person will be convicted and the chance that a guilty man will go free are both greatly reduced. The chance of error will be reduced but not eliminated as the O.J case and the reluctance of prosecutors to reopen cases in which DNA has exonerated prisoners attests.
There are a number of areas in which AB’s insight could be put to good use to improve both the criminal and civil justice systems. A Slate Explainer discusses the “black boxes” now in some cars. The “black boxes,” also known as event data recorders, typically record and hold data for the five seconds immediately prior to any collision in which the air bags deploy. The black boxes record and store such information as speed, RPM, gas petal position, whether or not the brake was depressed and other data.
Slate notes that such devices are now in some GM, Ford and Isuzu models. As event data recorders become more popular, it will become routine to use the data as evidence in court. The existence of such evidence can only improve the accuracy of both the civil and criminal justice systems.
Similarly, a policy of requiring all in-custody interrogations to be videotaped would eliminate a lot of uncertainty in determining whether a confession was voluntary.
Third, the presence of dash mounted video cameras activated at traffic stops would give the jury a good look at drivers alleged to be drunk and would go a long way to prove or disprove many police abuse cases.
There are undoubtedly many, many other ways to improve the reliability and availability of evidence in both civil and criminal litigation. Those improvements reduce both Type I and Type II errors (only education can eliminate Type III errors). The only people who lose from improvements in the accuracy of judicial decisions are those who deserve to lose.
The political battles over our court system too often sheds far more heat than light. Underlying much of the debate over tort reform and criminal justice reform is the mistaken notion that the results of trials are random.
Efforts to improve the reliability and availability of evidence to all litigants will not only restore a measure of the public’s confidence in the justice system, it will also improve the quality of justice administered by the courts. Those are goals that can be shared by all honest participants in the debate.

IV. BUSH PROPOSED AWARD CAP $250,000 - HIGH OR LOW, EFFECTIVE OR INEFFECTIVE?

1. Dwight Meredith (P.L.A.) provides some perspective on the first part of the question above, as well as an answer (bold text is my emphasis):

Why was the cap set at $250,000?
Juries are asked to perform a difficult task. When a person has been harmed by the negligence of another, we ask the jury to compensate the injured party for the pain and suffering caused by the negligence.
It is beyond dispute that pain and suffering is a real, actual, legitimate loss. The hard question is how much money is required to compensate for a given amount of pain and suffering. There is no scale that actually balances pain on one side of the scale and money on the other side. The Bush administration suggests that a lifetime of pain and suffering result in compensation of a maximum of $250,000.
Perhaps we can put that amount into perspective by comparing it with other values within our society.
In 1999, Ken Lay dispatched an empty Enron jet to France to fetch his daughter Robin home from Nice. The cost of that flight was $125,000, or one-half of what the Bush administration considers to be the value of a lifetime of pain and suffering.
The Bush administration’s latest tax cut proposal would have reduced Dick Cheney’s taxes by $220,000 in the last year he worked at Halliburton. That tax relief is approximately 90% of what the Bush administration believes to be the damages for a lifetime of pain and suffering.
Invested in 10-year Treasury Notes currently yielding 4.02%, $250,000 could provide a yearly income of $10,050. A full-time minimum wage earner makes approximately $11,850 per year.
Last year, Braves pitcher Gregg Maddox earned more than $13,000,000 and pitched almost 200 innings. Mr. Maddox earned more than what Mr. Bush feels is adequate compensation for a lifetime in a wheelchair for every four innings he pitched.
Former Tyco executive Dennis Kozlowski spent $2.1 million on a birthday party for his wife (more than Mr. Bush feels is fair for 8 people having to live while hooked up to tubes unable to feed themselves).
A lifetime with brain damage caused by medical negligence, according to the administration, should result in compensation for pain and suffering that is less than the cost of a 2002 Rolls-Royce.
The Whitewater Independent Counsel’s office spent in excess of $52,000,000 (the compensation due for 208 crippled children) to determine that “the evidence was insufficient to prove to a jury beyond a reasonable doubt that either President or Mrs. Clinton knowingly participated in any criminal conduct.”
Air Force One costs about $40,000 per hour to operate, so the President could take about a six-hour flight for the compensation due for a lifetime spent without the use of arms or legs.
The pharmaceutical industry gave approximately $17.5 million to Republicans in the 2002 election cycle. Those contributions represent the maximum pain and suffering compensation due for 70 brain-damaged babies.
Microsoft recently declared its first dividend. Bill Gates will receive $97.9 million from that dividend (tax free if the President’s proposal is enacted). Thus, the dividend will pay Mr. Gates more than the compensation due for a lifetime of pain and suffering each and every day of the year.
A Saudi Prince recently gave $500,000 to the George Herbert Walker Bush Scholarship Fund at Andover, our current president’s prep school.
Courtside tickets to Los Angeles Lakers games are $1,750 per ticket. Purchasing two season tickets would cost more than the Bush administration believes should be paid for having to spend the remainder of one's life being unable to breathe without a ventilator.
By all accounts, President Bush clowned and partied his way through Andover and Yale. The cost of tuition is $28,500 at Andover and $35,000 at Yale. The eight years of tuition for the education Mr. Bush treated so cavalierly is in excess of the $250,000 cap that Mr. Bush thinks should apply to people whose life has been ruined by medical negligence.
If a cap on non-economic damages is necessary, we think that $250,000 is too low. We suggest a cap equal to one year’s compensation of the most highly paid employee of the insurance company or hospital involved in the suit.

2. Dwight Meredith (P.L.A.) also provides an answer to the second part of the question (bold text is my emphasis): 

President Bush recent gave a speech advocating tort reform. Mr. Bush used the standard “frivolous suit” rhetoric.

There are too many lawsuits in America, and there are too many lawsuits filed against doctors and hospitals without merit!

The core of Mr. Bush’s actual proposal was a $250,000 cap on recovery of pain and suffering damages in medical malpractice suits.
The most striking thing about that proposal is that it is not aimed in any way at reducing the number of frivolous suits, punishing the lawyers and litigants who bring frivolous suits, or reducing the chance that frivolous suits would be successful.
A $250,000 cap on pain and suffering awards does absolutely nothing to limit frivolous suits. It simply caps the recovery in meritorious suits. So after claiming that the problems was frivolous suits, Mr. Bush proposes no solutions that address what he perceives as the problem.
If, however, one believes that frivolous suits are at the core of the need for tort reform, there are a number of measures that would address that alleged problem.
The 1993 Supreme Court decision in Daubert v. Merrell Dow Pharmaceuticals, Inc went a long way to prevent the presentation of junk science to a jury. Daubert requires, in Federal Courts, that the judge make in independent determination that any proposed expert testimony “both rests on a reliable foundation and is relevant to the task at hand.”
Prior to allowing expert testimony to be heard by the jury, the judge must first find that expert testimony’s

underlying reasoning or methodology is scientifically valid and properly can be applied to the facts at issue. Many considerations will bear on the inquiry, including whether the theory or technique in question can be (and has been) tested, whether it has been subjected to peer review and publication, its known or potential error rate, and the existence and maintenance of standards controlling its operation, and whether it has attracted widespread acceptance within a relevant scientific community.

The adoption of the Daubert standard in state courts would go a long way to ensuring that junk science has no place in the courtroom.
Under one Georgia statute, OCGA 9-11-9.1, no malpractice suit may be filed unless accompanied by an affidavit from a physician who has reviewed the case and determined that a violation of the standard of care occurred. Any malpractice suit filed without a doctor testifying that the defendant is negligent is subject to automatic dismissal. Requiring a doctor to testify to the negligence of another doctor before a suit is filed addresses the problem of frivolous suits directly.
Georgia also seeks to punish lawyers and litigants who file frivolous suits. In Georgia, a defendant in any civil litigation may bring ask the judge to sanction the other side for frivolous litigation. The sanction is an award of his or her attorney fees and litigation expenses against either the opposing party, the opposing lawyer or both.
The trial court is required to award such sanctions if “there existed such a complete absence of any justiciable issue of law or fact that it could not reasonably be believed that a court would accept the claim.” OCGA § 9-15-14(a).
In addition, the court may award attorney fees and litigation costs as a sanction if the court finds that the claim, or any part of the claim “lacked substantial justification” or was interposed for an improper purpose. OCGA § 9-15-14(b).
The defense attorney fees, expert witness fees and other litigation costs can be quite substantial in a medical malpractice case. Those provisions are not a form of “loser pays” in that the loser of a suit that had a sound factual basis but was not ultimately successful is not subject to sanction. Nonetheless, the threat of sanction can be a real deterrent to frivolous suits.
The tort reform argument based on a claim of an explosion of frivolous litigation has long been a Republican spin point. When closely analyzed, however, it is like Gertrude Stein’s description of Oakland. There is no there there.
The cases brought forth in support of the claim turn out to dismissed, fictitious or not frivolous at all. There is a Republican President and Republican control over both houses of Congress. If reforms that address the problems of frivolous litigation would actually accomplish the benefits that tort reformers profess to want, would not Mr. Bush have proposed such reforms?
Instead of proposing reforms that address frivolous litigation, Mr. Bush proposed to cap the damages for pain and suffering. The purpose of that proposal was not to limit frivolous suits but rather to make sure that people badly injured by medical malpractice to not receive full compensation for their injuries.

3. Dwight Meredith (P.L.A.) points out two critical cases where the damages cap failed to help doctors evidently fleeing because of malpractice insurance costs.

In this post, we noted that medical malpractice premiums for Doctors were about 3% of revenue. On average, Doctors pay less for malpractice coverage than rent on their offices.
In comments, PLA reader GP took issue with our post. GP raised two issues that need to be addressed. The first issue involves Doctors leaving practice because of high malpractice premiums. As GP wrote:

If you live in Las Vegas and you can't find an OB because they've all left town, will you wave these stats around when you are in labor in a crowded ER? If you have a severe head injury, will your economic figures be of any comfort to your family when the ER physician tells them they need to fly you somewhere else because the last neurosurgeon moved away a month ago?

GP is correct that a bunch of statistics will be cold comfort if one cannot find an Emergency Room Doctor when one is needed. He (or she) is also correct that Nevada is experiencing difficulty finding general surgeons to man the ERs.
Via, the Bloviator, we noted this article in the Las Vegas Review Journal.

Desert Springs Hospital has not had general surgeons available to care for emergency room patients this week and doctors who operate at the facility say it's a blow to the quality of health care in the Las Vegas Valley.
Hospital administrators said Monday the facility still had enough general surgeons to operate normally, but Tuesday in a written statement acknowledged that the hospital lacks surgeons to provide immediate care to emergency room patients.
An emergency room schedule from the hospital also indicates that there have been no general surgeons on call since Sunday. No surgeons are scheduled to be on call for the remainder of this month and all of April, according to the hospital's schedule…
Currently, the emergency department at Desert Springs is closed to patients with broken bones because the hospital lost nearly all of its orthopedic surgeons in January.

We agree with GP that the Nevada situation is terrible and needs to be addressed. The problem with GP’s argument, however, is that Nevada has already passed tort reform capping non-economic damages.
Last summer, Nevada passed a tort reform measure. That law:

Places a $350,000 cap on noneconomic damages in medical malpractice cases, creates a shorter statute of limitations and establishes a standard that holds physicians liable only for the damages for which they are responsible.
The law also puts a $50,000 limit on damages for hospitals and physicians who treat trauma patients, creates a medical error reporting system, requires more training for judges handling medical malpractice cases and holds lawyers responsible for costs of frivolous lawsuits.

If a cap of $50,000 on damages against doctors treating trauma patients still leaves Nevada hospitals without general surgeons to staff the Emergency Rooms, why does anyone think that the President’s proposed cap of $250,000 will solve the problem?
Our post also noted that some specialties such as obstetricians paid higher premiums for malpractice coverage. That may make sense in that a mistake by an OB can cause permanent damage to a newborn resulting in very expensive life long disability. On average, we noted, OB/GNYs nationwide pay 6.7% of their revenue for coverage.
GP took exception to that statistic as well:

although OB-GYN's nationwide may have a malpractice % of revenue rate of 6.7%, in Florida, even if they are pulling in a million dollars a year, their % of revenue rate is 20%.

Many media reports note that in South Florida, OBs are charged $200,000 for malpractice coverage. The problem with that argument is that Florida has already enacted tort reform for injuries caused by negligence in the birth process.
Under Florida law, non-economic damages are already capped at $100,000 in any instance in which, during birth, an infant sustains a brain or spinal cord injury caused by oxygen deprivation or mechanical injury and the infant is rendered permanently and substantially mentally or physically impaired.
If a damages cap would reduce the medical malpractice premiums for OBs in Florida, they would not now be paying $200,000 premiums.

4. Dwight Meredith (P.L.A.) has a compelling take-down of the AMA's stand that a $500,000 cap will not help but somehow a $250,000 cap will. 

Doctors have argued that a $500,000 cap on non-economic damages will not be effective in lowering malpractice premiums:

But, citing a recent study that concluded that a $500,000 cap would not be effective at reducing liability premiums, Dr. Palmisano left little doubt that the association had concerns about the cap.
"We're keeping an open mind," he said, "but we do not want to give support if it turns out to be something that will not do any good. We don't want a bill that is a bill in name only."

The Feinstein proposal limits non-economic damages to $500,000 in typical cases but also includes:

what she calls a "catastrophic exemption," for cases involving severe disfigurement, severe physical disability or death. In those suits, jury awards for pain and suffering would be limited to $2 million or $50,000 times the number of years the victim could be expected to live, whichever was greater.

We think the difficulty is that the President’s proposal is simply not designed to have the effect that the Doctors seek. That is, a cap on economic damages, whether set at $250,000 or $500,000 and whether or not a “catastrophic exemption” is included will not result in significantly lower malpractice premiums.
The driving forces behind the increase in malpractice premiums are 1) reduced investment income for insurance companies; 2) increased medical costs which drive the tort awards to a far greater extent than non-economic damages; and 3) the prevalence of injury caused by medical negligence of a very small number of doctors.
If a $500,000 cap on non-economic damages will not lower premiums, as the Doctors seem to accept, why do they think that a cap of $250,000 will do the trick?
Let us assume that a hypothetical insurance company insures 200,000 doctors who committed 100,000 instances of medial negligence. According the a USA Today report on a Harvard study, only one in eight instances of medical negligence result in a claim being made. The insurance company would have 12,500 claims made against the Doctors it covers.
USA Today also reports that 61% of all claims made are dropped or dismissed before trial without any payment. The proposed cap, whether set at $250,000 or $500,000, would have no effect on those claims. Thus, the insurance company would have 4,785 claims remaining to defend.
Another 32% of the original claims are settled for an average of $300,000. That settlement figure includes medical expenses and lost wages that would not be covered by the President’s proposed cap. The cap would therefore have very little or no impact on those cases. From the original 100,000 instances of medical negligence, the insurance company would be left with 785 claims that were not dismissed or settled.
Those 785 claims would proceed to trial. The Doctors win four out of five trials. Thus, the cap would come into play for only 157 cases out of an original 100,000 instances of medical negligence. The average award in the trial won by the plaintiff is $500,000. That figure includes economic and non-economic damages. If the entire award was for non-ecomomic damages (which clearly is not the case) the difference between a cap a $250,000 cap and a $500,000 cap would be about $4 million for each 100,000 instances of medical negligence. That would result in a savings of about $40 per instance of medical negligence and a savings of about $20 per Doctor.
The Doctors acknowledge that a $500,000 cap would not lower premiums. It is hard to see how a $250,000 would do much better.

5. Stephanie Mencimer writes the following in Washington Monthly. I recommend you read the whole article.

Saracco suggests that most of the people who suffer from "malpractice" usually have themselves to blame, like obese people and the smokers he says are getting money from asbestos lawsuits. The solution, he insists, is a cap on jury awards like the one passed in California during the '70s--the law all the doctors' talking points refer to as proof of the efficacy of such caps. But Saracco and his fellow physicians have a short memory. California passed its law in 1976, after malpractice insurers, blaming out-of-control lawsuits, suddenly hiked doctors' premiums by more than 300 percent in a single year. Some years after the law took effect, insurance premiums had shown no sign of going down. California doctors ended up suing Travelers' Insurance Co., alleging that it grossly overcharged in the name of a non-existent malpractice crisis. (Here, too, the plantiff's bar came in handy: A trial lawyer won the doctors a $50 million refund.) The state ultimately passed strict insurance reform that kept a lid on future premium increases.

6. An aspect of frivolous lawsuits coolly ignored by Bush and his cronies is that related to their friends in high places - big business. Dwight Meredith (P.L.A.) comments on this (bold text is my emphasis):

I have previously commented that the popular notion that plaintiffs receive large judgments and settlements as a result of frivolous suits is largely myth.
That is not to say that frivolous suits are not filed. Many are filed. My point is that overwhelming majority of frivolous suits just lose. They lose on motions to dismiss. They lose at summary judgment. They suffer directed verdicts. They lose before juries and they lose on appeal.
There is one circumstance in which frivolous suits can lose and the plaintiff still win. That circumstance is when the objective of the suit is other than actually prevailing on the merits in court.
For instance, pharmaceutical companies have a monopoly on patented drugs for a specified period of time. One quirk in the law is that if a company sues a generic manufacturer for patent infringement, the patent holder gets an automatic 30 month extension of the patent by simply filing suit regardless of whether or not the suit has merit. See this NY Times editorial:

Some brand-name manufacturers have been extending the effective lives of their patents by tactics that are underhanded at best and appear fraudulent at worst.
Ordinarily manufacturers are granted patents that give them a monopoly for 20 years, which is ample time to recover development costs and make a profit before generic competitors are allowed on the market. But through loopholes in current law, the companies can get an automatic 30-month extension simply by filing suit against a generic manufacturer asserting that the generic product will infringe secondary patents on packaging and other minor items.
In some cases, manufacturers have been able to get even longer extensions by filing multiple patent-infringement suits. A study by the Federal Trade Commission issued in July cited eight cases since 1982 where brand-name companies got additional delays, beyond the first 30-day stay, ranging from 4 to 40 months. In the four cases that have reached a court decision, the brand-name manufacturers lost each time, suggesting that their suits were little more than legal ploys to gain additional time to reap monopoly profits, not serious litigation.

The purpose of those suits is not to win the patent infringement case but rather to extend the life of the patent on profitable drugs. As long as the litigation costs are lower than the profits earned by the extension of the monopoly, the suit makes economic sense regardless of whether it has legal or factual merit.
Via Ampersand I learned of another suit that may be frivolous legally but might succeed in accomplishing other objectives.
Oakhurst Dairy of Portland, Maine chooses not to sell milk from cows that have been given artificial hormones.
Oakhurst requires each of its milk suppliers to sign an affidavit swearing that they do not give their cattle artificial hormones. The affidavit must be updated every six months. Oakhurst pays a premium for milk from cows that are not given hormones. Last year, the premium amounted to about half a million dollars.
Oakhurst advertises the fact that its milk comes from cows that are not given artificial hormones. Oakhurst’s milk has a label proclaiming “"Our Farmers' Pledge: No Artificial Growth Hormones."
Oakhurst’s policy was implemented in reaction to consumer preference. Oakhurst’s President is quoted as follows:

Consumers have let us know since the advent of these artificial growth hormones that they don't want to have to worry about (them). If consumers tell us they don't want anything added to the milk, or if they have a concern about something, we're going to respond to them as a company.

Oakhurst had revenues of about $85 million in 2002. It employs 240 people. It is not a large company.
Monsanto is a large company. According to its 2002 Annual Report, Monsanto had revenue in excess of $4.6 billion.
Among Monsanto’s products is an artificial hormone given to cattle to help increase milk production.
Monsanto took exception to Oakhurst’s “no artificial hormone” policy and filed suit against Oakhurst. According to one report:

The suit against Oakhurst claims unfair competition, unfair business practices and interference with advantageous business relationships. According to the suit, the business relationships between Monsanto and dairy producers who use the artificial growth hormone have suffered because the farmers will stop using the treatments.

Another report notes:

Monsanto claims that Oakhurst is misleading customers with labels and a marketing effort that includes the statement, "Our farmers' pledge: No artificial growth hormones."
Monsanto said Oakhurst's slogan implies there's something wrong with milk produced by cows that have been injected with the growth hormones, even though the federal Food and Drug Administration has found that the milk is not affected by the hormones.

Does giving dairy cows Bovine Growth Hormone make their milk any less safe? I do not have a clue. The FDA approved the use of BGH here but it is banned in Canada and Europe.
An Oakhurst spokesman makes clear that he doesn’t know either:

"We have said from the beginning that we make no claims to understand the science involved with artificial growth hormones," he said. "We're in the business of marketing milk, not Monsanto's drugs."

I think that Monsanto’s claim is frivolous. First, it has not been alleged that Oakhurst’s claim that its milk is from dairy cows not injected with artificial hormones is false. Thus, the statement on its milk jugs is perfectly accurate. Secondly, Oakhurst makes no claims that its milk is safer than milk from cattle treated with BGH. It makes no mention of Monsanto or any Monsanto product.
Oakhurst is simply responding to customer preference. It is using advertising to accurately state the nature of its product. It is doing so in an effort to distinguish its product from other, similar products. That is what advertising is supposed to do. It is hard for me to see how Oakhurst did anything other than promote its product through truthful advertising.
I predict that Monsanto’s suit will go down in flames if Oakhurst chooses to fight.
The amount of additional revenue Monsanto would earn if Oakhurst accepted milk from dairy cows treated with BGH is tiny. The effect of such revenue on the bottom line of a company the size of Monsanto is infinitesimal. Why would Monsanto incur the costs of suing to stop one small dairy in Maine from advertising artificial hormone free milk?
One report suggests an answer:

To some Maine dairy farmers, there's clear reason why Monsanto Corp. sued Oakhurst Dairy last week over its marketing of milk produced without artificial hormones: Monsanto is staging a last-ditch effort to save a product that seems to be losing favor among New England farmers and consumers alike.
"They're doing this out of desperation," said John Nutting, a dairy farmer from Leeds and former state legislator. "Most of us farmers don't want to do anything to cause concerns among consumers." ...
The chemical industry as a whole, though, worries that resistance to bioengineered food products - rampant in Europe and some other regions - could spread to the United States. American consumers have been buying more products that are marketed as organic or all-natural in recent years.

It appears that Monsanto may be using litigation not to vindicate its rights but rather to intimidate. Monsanto may hope to gain not from the success of the suit but rather from the costs such a suit will impose on Oakhurst. The cost of winning the suit may be more than Oakhurst can afford.
Monsanto may be trying to send a message not only to Oakhurst, but also to many other small dairies. The message might be “If you advertise that your milk is from hormone free cows, you will have to spend a lot of money on lawyers instead of your business.” If that is in fact Monsanto’s intent, the suit was brought for an improper purpose.
Will Oakhurst spend the money to fight Monsanto? Oakhurst is clearly concerned about litigation costs:

Yet Bennett (President of Oakhurst) noted … what could be an expensive legal battle with a much larger company.
"That's a $4 billion company and one that's losing a lot of money," he said. "When a company that size brings a lawsuit against a little company like ours, sure I'm concerned, because who knows how much it will cost to litigate. But we feel very strongly that we're doing the right thing."…

Frivolous litigation is often discussed only in the context of personal injuries claims. Some frivolous and abusive litigation arises in completely different contexts. To close, I would like to pose one question.
Will a cap on damages for pain and suffering do anything whatsoever to prevent the type of frivolous litigation exemplified by suits designed only to extend drug patents or intimidate small dairies?

V. PRESIDENT BUSH and NEWSWEEK CONSIDER CIVIL JURIES UNRELIABLE - FACT OR FICTION?

1. Dwight Meredith (P.L.A.) points out the following (bold text is my emphasis):

George W. Bush has a perverse view of juries. Some people think that juries make essentially random decisions and have no trust in the accuracy of jury verdicts. Others, myself included, think that juries generally find the truth. George W. Bush is firmly in both camps.
While Governor of Texas, Mr. Bush showed an abiding faith in the unerring accuracy of jury decisions in death penalty cases. While Governor more than 130 death penalty cases came before the Governor. He granted a reprieve in exactly one case. Mr. Bush has said that he is:

confident that every case that has come across my desk -- I'm confident of the guilt of the person who committed the crime.

Salon reports that Mr. Bush was so confident of the accuracy of jury decisions in death penalty cases that as Governor he spent less than 30 minutes reviewing each such case.
Mr. Bush has much less confidence in the accuracy of the verdicts of civil juries. Mr. Bush has proposed that politicians and not jurors decide the amount of non-economic damages due to the most seriously injured victims of negligence.
Mr. Bush has said that poor jury decisions are “devastating the practice of medicine” and ruining many an “honest business.”
Mr. Bush’s belief in an almost Biblical inerrancy of death penalty juries but his complete lack of faith in civil juries is exactly backwards.
It is obvious, of course, that juries do not make perfect decisions. One of the most important factors leading to jury error is imperfect information. Like any decision-maker, jurors must rely on the information available to them. Since jurors are prohibited from performing independent investigations, they must rely on the information presented by the parties through the lawyers.
If a teacher does not cover a subject included on a test, the failure of the students to know the material is the fault of the teacher and not the students. If lawyers do a poor job of discovering and presenting information needed by a jury, it is the fault of the lawyers and not the fault of the jury.
We often hear that persons convicted of crimes are later exonerated by DNA evidence. Does anyone think that those convictions would have occurred had the juries been provided with the exculpatory DNA evidence at trial? The failure in those cases is in the quality of the information presented to the jury and not in the jury’s decision-making process.
The chances of a jury reaching a just result increase when both sides have highly skilled lawyers with the resources needed to investigate, prepare and present their side of the case. Conversely, when one side has experienced, highly skilled lawyers with plenty of resources and the other side has overworked lawyers of lesser skill operating without needed resources, the chances of a just verdict diminish.
The chances of both sides having highly skilled advocates with adequate resources is far higher in big money civil cases than in criminal cases. Thus, the chances that juries will make wrong decisions as a result of having incomplete information is much higher in the criminal arena than on the civil side.
Mr. Bush is concerned that juries are unfair to medical malpractice and other civil defendants. The defense of big money civil cases usually falls to insurance companies. Insurance companies have an army of investigators, adjusters, jury selection consultants and expert witnesses at their disposal. They have the resources to conduct mock trials, focus groups and polling. They have a stable of highly skilled, experienced trial counsel. It is highly improbable that juries make incorrect decisions because civil defendants do a poor job of investigating, preparing and presenting their side of the case.
The situation in criminal cases is quite different. Criminal defendants do not have the resources of huge insurance companies supporting their case. The defense in criminal cases usually falls either to overworked and underpaid public defenders or to less experienced and less skilled lawyers willing to take low paying criminal appointments.
In one Texas murder case, the defense attorney slept through portions of the trial.
Some advocates point out that the defense lawyers in Gary Graham’s Texas murder trial failed to even question a number of witnesses. That simply would not happen in a large civil case.
In Odell Barnes’ Texas capital case, defense lawyers neglected to conduct any scientific tests on crucial blood and semen evidence that allegedly linked him to the crime. That would not happen in an important civil trial.
Andrew Cantu was executed by the State of Texas despite the fact that, as Salon reports:

(He) ended up representing himself after two lawyers assigned to his case withdrew and a third never even interviewed the defendant, claiming he didn't know where to find him. (He apparently didn't try death row.) Cantu was executed without either state or federal habeas corpus review of his claims.

My experience is with civil juries. That experience convinces me that juries almost always make good decisions. I have yet to try an important civil case in which the defense lawyer slept through the trial, failed to interview witnesses or failed to present crucial evidence.
A person whose experience is only on the criminal side could feel differently. Overworked and underpaid lawyers without the resources to investigate, prepare and present a case may not give juries the information needed to make an accurate decision. That increases the likelihood of jury error.
George Bush’s blind faith in the inerrancy of death penalty juries combined with his distrust of civil juries is perverse.

AN ASIDE: Indeed, I recommend that all readers become familiarized with how then Governor George W. Bush (and his then - and now - counsel Alberto Gonzales) routinely sent people to their deaths in a legal system so poor and so anti-defendant-rights that it is an outrage that his record is not publicized by the so-called liberal media (SCLM). Alan Berlow recently wrote an investigative report on this in the Atlantic Monthly -- The Texas Clemency Memos.

2. Dwight Meredith (P.L.A.) makes another more-than-valid comment on juries and their intelligence using a column by U.S. News and World Report Editor-in-Chief and Publisher Mort Zuckerman as a reference: 

Mort Zuckerman, editor in chief and publisher of U.S. News and World Report has been busted. His bust concerned a recent column (the link is to a Jewish World Review reprint of the column as the U.S. News issue has gone behind the $ firewall) in U.S. News And World Report decrying that most durable of hobby horses, frivolous lawsuits.
Two of the examples of frivolous lawsuits provided by Mr. Zuckerman are:

a woman throws a soft drink at her boyfriend at a restaurant, then slips on the floor she wet and breaks her tailbone. She sues. Bingo--a jury says the restaurant owes her $100,000! A woman tries to sneak through a restroom window at a nightclub to avoid paying the $3.50 cover charge. She falls, knocks out two front teeth, and sues. A jury awards her $12,000 for dental expenses.

Howie Kurtz of the Washington Post busted Zuckerman for using those two examples for the simple reason that they never happened. Somebody made them up. As Kurtz writes:

Great stuff -- and, unfortunately for Zuckerman, totally bogus. Two Web sites -- StellaAwards.com and Snopes.com -- say the cases of the soda-slipping Pennsylvania woman and the window-wriggling Delaware woman are fabricated, and no public records could be found for them.
Zuckerman has plenty of company. A number of newspapers and columnists have touted the phantom cases since they surfaced in 2001 in a Canadian newspaper.
Ken Frydman, Zuckerman's spokesman, did not dispute that the pair of cases in the column two weeks ago were imaginary, but would not address whether the magazine will publish a retraction.
"These cases were reported in a variety of other reputable publications, such as the Fort Worth Star-Telegram and the London Telegraph, and Mr. Zuckerman could have cited dozens of other cases," Frydman says. "Few Americans would disagree with the proposition that there are far too many frivolous lawsuits filed."

Zuckerman choose those examples for his column because the cases, if real, are obviously ridiculous. No one could possibly think that either of the plaintiffs cited by Zuckerman deserves to be compensated in any way.
Indeed, Zuckerman is quite sure that the examples will be viewed as ridiculous by all of his readers. I wonder, then, why he thinks a jury would view the case any differently? Juries are made up from a cross section of the community. I have selected many juries. I have never had a jury that did not include at least a few people who are readers of U.S. News and World Report or similar publications (bold text is eRiposte emphasis).

3. Public Citizen recently responded to a woefully researched, fear-mongering Newsweek article that spread more myths. Some extracts:

Newsweek’s Dec. 15 cover story entitled "Lawsuit Hell/Civil Wars" is a one-sided diatribe masquerading as investigative journalism...The article reads like tabloid journalism – designed to excite and sell magazines rather than inform. It pushes readers’ emotional buttons rather than providing balanced analysis that informs the public about a critical policy issue...
In adding a partnership with NBC for week- long broadcast tie- ins and on- line chats, including one with the lead author and lawsuit "victims" described in the article, Newsweek has gone beyond advocacy journalism to crusade against consumers’ access to the courts – a crusade without precedent even among news outlets with overt conservative leanings..
From a journalistic point of view, the article suffers from major reporting deficiencies, including an extreme lack of due diligence. The article includes:

• Many false and exaggerated anecdotes that present an unbalanced and negative caricature of the legal system.

• Major factual inaccuracies about the legal system and lawsuits.

• Proposed solutions that have no basis in experience.

Finally, the article’s lead author, Stuart Taylor Jr., a commentator rather than a news reporter, is heavily biased towards business interests on tort issues and has a history of advocacy on this issue. His viewpoints, which rely largely on corporate lawyer Philip K. Howard and his book, "The Collapse of the Common Good," should have been relegated to a column...
Newsweek has fallen hook, line and sinker for the myths and distortions spread by a well-organized campaign funded by the American Medical Association, insurers, tobacco companies, auto manufacturers and others to strip consumers – but, notably, not businesses – of their legal rights...

Newsweek’s Proposed Solutions to the Problems It Claims Exist Have no Basis in Experience
Newsweek not only has subscribed to Howard’s fallacious claims about the state of the civil justice system, but Taylor’s praise also extends to the "solution" for medical malpractice claims proposed by Howard. Those proposals include removing most claims "to a special court of medical experts" where "expert judges" rather than juries would review doctors’ decisions. This prescription is pushed by Howard with no evidence to demonstrate that juries are not capable of fairly deciding medical malpractice cases and with no real-world experience to show that his "solutions" will work.

• [NEWSWEEK]  "Rather than allow juries ignorant of medical procedure to be swayed by sympathy, judges who are experts would follow established medical standards." [p. 51]

Physicians may not be any more expert than juries when it comes to assessing accountability. This idea was tested a decade ago, with disappointing results. The American Society of Anesthesiologists conducted an experiment, giving closed malpractice claim files to pairs of neutral medical experts, to see if they agreed on whether the standard of care was violated. These pairs of doctors disagreed 38 percent of the time, eve n though the experts were not the "hired guns" who typically testify at trials.²⁵ The researchers concluded: "These observations indicate that neutral experts (the reviews were conducted in a situation that did not involve advocacy or financial compensation) commonly disagree in their assessments when using the accepted standard of reasonable and prudent care."
Jury Competence. With regard to jury competence, empirical analysis of jury verdicts suggests that juries take care in assessing pain and suffering damages in medical malpractice cases by arriving at awards that bear a reasonable relationship to the severity of the harm suffered. This finding comes from a comprehensive study of California jury verdicts in medical malpractice cases from 1993 to 1999. ²⁶ The authors examined jury verdicts in medical malpractice cases in California. The authors reviewed 1,283 medical malpractice cases dating from January 1, 1993, to March 10, 1999. These cases were drawn from the Westlaw database for the California Jury Verdict Reporter. The analysis showed a consistent relationship between the amount of the verdict awards and the seriousness of the injury suffered by the plaintiff. The authors concluded, "The results reported above do not appear to support the contention that juries are systematically over-compensating plaintiffs for pain and suffering or emotional distress in medical malpractice cases."²⁷ 
Similar results were obtained in a study by Neil Vidmar, a nationally recognized expert on jury competence.²⁸ His Medical Malpractice Project at Duke University attempted to review every malpractice suit filed in North Carolina between July 1, 1984, and June 30, 1987 – 895 cases. In compiling and analyzing these cases, Vidmar viewed court files, conducted attorney interviews, and arranged to view the closed file claims of three insurers. Information was also gathered on an additional 300 cases between 1987 and 1990. The project concluded that, "empirical evidence from multiple sources does not support claims that medical malpractice juries are consistently pro-plaintiff, incompetent, or unjustifiably generous in determining awards."²⁹
The results in California and North Carolina are consistent with later research by Professors Vidmar, Gross & Rose on medical malpractice verdicts in New York and Florida that also documented a consistent relationship between the amount of non-economic damages awarded and the seriousness of the injury suffered by the plaintiff.³⁰
In a study of jury verdicts from New York City and the surrounding metropolitan areas, jury verdicts increased with severity of injury except when death occurred, which resulted in a substantially lower award.³¹ In death cases, it’s not surprising that the size of the award is less than in a case of grave injury. In those who sustain grave injuries, economic costs of medical treatment for that life-altering injury are likely to be greater, and the pain and suffering would exist over a longer time period than in the case of death. ³² 
Like New York, Florida law requires juries to render a verdict that specifies the individual amounts of special (economic) and general (non-economic) damages. The authors reviewed 525 medical malpractice verdicts reported by judges and their law clerks to the Florida Jury Verdict Reporter that is archived in Westlaw. The period covered was 1987 through 1996. According to the authors, it seems plausible that the judges and law clerks were likely to report plaintiff wins rather than losses, because the wins were associated with damage awards. Nevertheless, the amount of these awards, like New York (and North Carolina and California), were positively related to the severity of injury assessed on the National Association of Insurance Commissioners (NAIC) scale.³³
In a recent Iowa Law Review article entitled, "The Role of the Jury in Modern Malpractice Law," by Philip G. Peters, Jr., claims about jury competence were carefully considered.³⁴ The criticisms included several related threads, two of which are summarized here. First, lay jurors lack the capacity and training needed to evaluate complex medical treatment decisions. Second, juries are more sympathetic to injured plaintiffs and biased against wealthy defendants.
Jurors have the capacity to decide medical malpractice cases. Those who question jury capacity fear juries will be confused by scientific evidence and, in their confusion, will be vulnerable to manipulation by plaintiffs’ attorneys and their experts, who will elicit sympathy for injured plaintiffs. One common method used to evaluate jury capacity is to compare the outcomes reached by juries with those reached by judges. Researchers have repeatedly found that juries and judges reach extremely similar conclusions about tort liability. As a consequence, these studies provide support to the contention that juries have the capacity to understand and decide complex medical malpractice cases. In one famous study, 4,000 civil trials were reviewed and the reactions of judges and juries were compared. In nearly four out of five cases (78 percent), the judge and jury agreed, thus refuting fears about unpredictability and incompetence.³⁵ According to the authors, "this agreement rate is better than the rate of agreement between scientists doing peer review, employment interviewers ranking applicants, and psychiatrists and physicians diagnosing patients."³⁶ In another interesting study the outcomes reached by juries were compared with those reached by physician reviewers. The researchers found a surprising agreement between physician reviewers and juries. Where juries differed from the physicians, juries were consistently more lenient toward malpractice defendants than were the physician reviewers.³⁷
Jurors are not biased against physicians. An expanding body of evidence suggests that rather than being biased against physicians, jurors begin their deliberations favoring physician-defendants and doubting the motives of plaintiffs in medical malpractice cases. Findings reveal that jurors are even more distrustful of plaintiffs’ lawyers and believe medical malpractice suits ruin the health care system by driving up costs. This may be due in part to the constant media bombardment by the corporate interests that attack and ridicule plaintiffs and their lawyers, as in the Newsweek article. Peters concluded after reviewing the available studies that there is simply no evidence that juries are prejudiced against physician defendants or that their verdicts are distorted by their sympathy for injured plaintiffs. Instead, the existing evidence strongly indicates that jurors begin their task harboring sympathy for the defendant physician and skepticism about the plaintiff.³⁸ 
These studies demonstrate that juries are fulfilling their intended role in our civil justice system. Juries are not wildly and irrationally over-compensating injured plaintiffs with huge non-economic damage awards. Juries do bring community wisdom, experience, values and common sense to their deliberations...

VI. FRIVOLOUS LAWSUITS ARE EASY PICKINGS/PROFITABLE FOR LAWYERS - FACT OR FICTION?

1. Dwight Meredith (P.L.A) tackles a moronic unsubstantiated assertion from U.S. News and World Report Editor-in-Chief and Publisher here (bold text is my emphasis):

Zuckerman becomes even more absurd when he discusses the economics of contingency fees:

The right to sue has been exploited by lawyers. They can gamble on taking cases on a contingency basis because they need only 1 win in 10 to score that big judgment that will make up for the other losses.

The only “big judgment” in a frivolous suit that he cites is the $100,000 for the lady who threw her drink and slipped in the spill. Even putting aside the fact that that story was made up, the economics are simply wrong.
It would be difficult for a lawyer, working by himself, to handle more than twenty such suits at a time. Assume first that the lawyer took all twenty such cases to trial in a year. That is a very a dubious assumption because 1) the time from filing to trial, at least in this jurisdiction, is closer to 2 years and 2) the lawyer would never get such a case before a jury as the judge would grant the defendant’s summary judgment motion. Next assume that the lawyer had a 33% contingency fee.
If the lawyer succeeded in one case in ten, he would have total revenue for the year of $67,000 out of which he would get to pay for all of the expenses of his practice. It is unlikely that such a lawyer would net $50,000 for his effort.
If the lawyer, however, could discern which of the twenty cases was the winner, he could accept that case and reject the rest. With 20 such winning cases, he would have earnings of $667,000 of which he would net more than $600,000 for the same amount of work. The contingency fee lawyer, therefore, has every incentive to make sure that each and every case he accepts is a winner.
I know of no plaintiff’s attorneys who take cases in which they estimate a 10% chance of success. A lawyer taking contingency fee cases that have a 10% chance of success is much more likely to face a bankruptcy judge than a civil jury.
The use of contingency fees arrangements gives the lawyer every incentive to only take cases that are sure winners. The only lawyers who make money from frivolous personal injury cases are lawyers for the insurance companies.
The conventional wisdom is exactly backwards with regard to contingency fees. The use of such arrangements acts as a filter to prevent frivolous cases from being filed. A lawyer being paid on a hourly rate for every hour worked on a case may be willing to take a chance with a small probability of success but a lawyer who assumes the risk of losing must be more selective.
What, you say, you do not believe me? Then try a little experiment. Call a plaintiff’s lawyer and tell him that you suffered a fractured tailbone when you slipped in a restaurant on a drink that you threw at your boyfriend. Tell him that you know the case has only a 10% chance of winning and that, if successful, the case will generate an award of $100,000. Tell the lawyer that you are unwilling to risk any of your money for the suit but that you want him to risk his time and money and that he can have 1/3 of any settlement he secures. If you are not listening to a dial tone pretty quickly I will be greatly surprised.
Next, call up a lawyer who bills by the hour. Tell him the story and add that you know the case has little chance for success but that you are willing to pay $250 per hour for every hour worked. I expect that your reception will be a bit friendlier.

VII. COST OF MALPRACTICE INSURANCE and REASONS BEHIND IT - FACT OR FICTION?

1. Dwight Meredith (P.L.A.) covers what recently happened in Florida, and this alone is sufficient for people to understand the bogus-ness of the malpractice/"tort reform" agenda of Bush and the GOP. His comments are reproduced below, with bold text being my emphasis.

Kevin Drum has often remarked at how difficult it has been for him to get solid data on the issue of tort reform in the context of medical malpractice suits.
Via the Bloviator, I learned that Kevin’s frustration was shared by certain legislators in Florida.
Florida Governor Jeb Bush, like his brother, is pushing for legislation that would establish a $250,000 cap on awards for non-economic damages as a “solution” for the medical malpractice insurance “crisis.”
Jeb Bush called a Special Session of the Florida Legislature to consider the measure. A number of Florida State Senators felt that they were having a difficult time getting straight answers to their questions.
They then took an obvious but rare step. They required the witnesses to swear an oath to tell the truth before testifying.
In Florida, witnesses before the Legislature rarely have to swear to tell the truth. According to this report, it was only the “third time in the past decade that witnesses were sworn, other than cases in which agency heads testify at confirmation hearings.”
According to one columnist:

What happened after that "was pretty scary," said Sen. Ron Klein, D-Boca Raton, the Senate minority leader.
"People who had testified before us on previous occasions got up there and told us different things."

Among the revelations (culled from various articles and columns) that occurred after the lobbyists were faced with possible penalties for perjury:

• "I am not aware of any instance where we said the problem was the enormous amount of frivolous lawsuits," said Jeff Scott, legal counsel for the FMA (Florida Medical Association).

• When Sandra Mortham of the Florida Medical Association testified, Campbell demanded to know why Mortham had blamed "frivolous lawsuits" for the rise in malpractice rates. "Certainly, I've never said that," replied Mortham, a former House member from Largo and the FMA chief executive officer. "I don't feel I have the information to say whether or not there are frivolous lawsuits in the state of Florida."

• A state regulator said no, there hasn't been an explosion of frivolous lawsuits.

• Witness after witness denied a crush of frivolous lawsuits has crippled the state's medical malpractice tort system.

• We fixed the frivolous lawsuit problem" in past legislative sessions, testified Bob White, president of First Professionals Insurance.

• Insurers didn't need a cap on jury awards to be profitable.

• State data shows malpractice claims have not skyrocketed and that Florida has more physicians than ever.

• There has been no sharp rise in medical malpractice settlements made by insurance companies.

• A state insurance regulator surprised senators by saying he often depended on insurance companies' information when deciding whether to raise rates.

• Contrary to stories of doctors quitting the business, the number of licensed doctors is increasing. A Health Department official said new applications for new medical licenses in Florida rose from 2,261 in fiscal 2000 to 2,658 in fiscal 2003.

• Bob White, president of First Professionals Insurance Co., the state's largest malpractice insurer, surprised senators by blaming rising premiums mainly on new medical technologies and procedures...

• The hearings also revealed that White's company pays $500,000 a year as an "endorsement fee" to the Florida Medical Association, the doctors group that rallied for the cap.

• First Professionals was lobbying for the damages cap at the same time it has “boasted to stockholders of its profits in Florida.”

• The Florida Medical Association received $4.5 million in endorsements from insurance companies to lobby for tort reform. That represents about 10% of the FMA budget.

It seems that the prospect of spending a few years incarcerated in the Florida penal system for perjury tends to focus the minds of the lobbyists/witnesses on the truth. 

2. Dwight Meredith (P.L.A.) has also written about the fact that a minority of doctors are responsible for a significant chunk of malpractice awards (bold text is my emphasis).

...let me first tell you the story of Dr. Dr. Merrimon Baker. That story is drawn from a Houston Chronicle article I located via Off The Kuff.
Dr. Baker is an orthopedic surgeon in Cleveland, Texas. Based on the story in the Chron, it is hard to avoid the conclusion that Baker is a very lousy doctor. Consider the following:
Dr. Baker “prescribed 15,000 tablets of Xanax and Darvon to a former intravenous drug user.”
His ex-wife has testified under oath that Dr. Baker was addicted to prescription drugs.
Dr. Baker once left a surgical sponge in a patient after an operation. That is a common and, perhaps understandable error. Dr. Baker, though, also once operated on the wrong hip of one of his patients. On another occasion he operated on the wrong leg.
It has been alleged that Dr. Baker performed an unnecessary operation on a patient’s ankle. The ankle became infected and eventually had to be amputated.
Then there is the case of Richardo Romero who was one of Dr. Baker’s patients.
The Chronicle reports:

In 1998, Ricardo Romero of Humble decided to undergo back surgery.
Romero, a 20-year employee of Houston Marine Services, had injured his back while moving a heavy hose. After 12 months of medication and therapy the problem wasn't better, so he opted for an operation.
He saw Baker's advertisement in the Yellow Pages and liked the fact that Baker was conveniently located at Columbia Kingwood Medical Center. When Romero met Baker, "He seemed pretty nice. He seemed to be knowing what he talked about."
On July 15, 1998, Dolores Romero kissed her husband goodbye before he was wheeled back for what she understood was an uncomplicated operation. Hours passed without word of her husband's progress. When Dolores Romero pressed hospital employees for news, they told her they didn't know anything.
What she later learned was that her husband had lost nearly all of the blood in his body during the operation. Blood for a transfusion was late in coming, and in the meantime his heart stopped beating. His brain, deprived of blood and oxygen, was severely and irreversibly damaged.

All in all, Dr. Baker had 12 allegations of malpractice asserted against him between 1988 and 1998.
Still, Dr. Baker practices medicine in Texas and continues to perform operations.
There can be no doubt that the actions of a small percentage of doctors result in a disproportionate amount of payouts in medical malpractice claims.
The Chron reports:

According to the federal government's National Practitioner Data Bank, 5 percent of physicians listed are responsible for nearly 33 percent of the total dollars paid for physicians in malpractice judgments or settlements from September 1990 to March 2003.

A policy that prevented the worst 5% of doctors from committing malpractice would greatly reduce the number of suits filed. It would lower the payouts and (to the extent that premium rates are effected by payouts) the cost of insurance. It would reduce the income of the trial lawyers while saving patients from much harm.

3. Dwight Meredith (P.L.A.) has a Tort Reform Quiz here, and I am highlighting some of the relevant questions and answers:

All answers were taken from or calculated from information contained in USA Today report. Many thanks to the indispensable Bloviator for the link.

1) On average, Doctors spend approximately what percentage of their revenue on medical malpractice insurance?
(a) 50%
(b) 25%
(c) 10%
(d) 3%
2) Place in descending order the average costs to Doctors of the following:
(a) Rent
(b) Medical malpractice premiums
(c) Office equipment
(d) Office Personnel
3) According to data released by the government, medical malpractice premiums rose last year by an average approximately of:
(a) 42%
(b) 32%
(c) 22%
(d) 12%.
...
5) According to a report in Medical Economics, OB/GNYs pay the highest percentage of their revenue for medical malpractice premiums. That percentage is approximately:
a) 37%
b) 27%
c) 17%
d) 7%
...
7) If you are currently paying $300 per month for health insurance, a $250,000 cap on non-economic damages in medical malpractice suits is expected to lower your health insurance premiums to:
a) $299
b) $249
c) $209
d) $159
...
Answers
1) D. According to USA Today, Doctors spend an average of 3.2% of revenue on malpractice premiums.
2) “A March 2002 government report by MedPAC, a congressional advisory commission, says doctors, on average, were expected to spend 3.2% of their revenue on malpractice insurance last year. That compares with 12.4% for staff salaries, 11.6% for office expenses and 1.9% for medical equipment.”
3) D. According to USA Today “Government data released Monday by a congressional advisory commission show the average increase last year was 11.3%.”
...
5) D. “Calculations based on two surveys published by Medical Economics magazine -- widely read by physicians -- last year show that OB-GYNs paid the most for malpractice insurance, as a percentage of their revenue, 6.7%, and cardiologists paid the least, 1.5%.”
...
7) A. $299. “At the same time, the congressional study reported that caps on pain and suffering awards would translate into very small savings -- 0.4% -- on overall health insurance premiums for the general public.” A 0.4% reduction in a $300 per month premium results in a savings of $1.20 per month.

4. Dwight Meredith (P.L.A.) provides some additional perspective on doctor's costs here:

How much have malpractice insurance premiums increased? According to this USA Today story:

Doctors complain that malpractice insurance premiums have soared nationwide since the 1990s, when they remained flat or dropped. Government data released Monday by a congressional advisory commission show the average increase last year was 11.3%. That was the largest increase in a decade, yet lower than the average annual increase of 11.6% since 1975, according to a report this month by Tillinghast-Towers Perrin, which provides consulting services to the insurance industry.

If the increase in premiums is lower than the twenty-five year average, what is causing the outrage now?
There may be a number of answers to that question. One answer is that although last year’s increase was below the 25 year average, it was the highest in a decade and came as somewhat of a shock to Doctors.
We think a large part of the answer, however, lies in the rise of managed care. In the 1970s, and 1980s large increases in medical malpractice premiums were in the context of fee for service medicine. The fee for service payment system allowed Doctors to pass the increased costs of the premiums along to the companies insuring the patients. Neither the Doctors nor the patients felt the pinch of the increased costs.
The rise of managed care changed all that. Doctors no longer have pricing power for their services. The HMOs, Medicaid and other large organizations pay for such a large portion of medical costs that they have market power over the prices Doctors can charge.
They do not care what the Doctors’ costs are. The amounts they will pay for medical services are fixed by market forces. When the Doctor’s costs go up, he or she can no longer pass the cost along and must either work harder, cut other expenses or make less money.
Many Doctors are unhappy with any of those options. They have no easy way to cope with the situation. While Doctors as a whole are paying about 3.2% of their revenue for malpractice coverage, that money comes directly off the bottom line.
When Doctors pay just 3.2% of their revenue for malpractice insurance, it is hard to think that those costs are driving lots of Doctors from the practice of medicine (although it could be true in isolated localities for certain specialties). What the Doctors are feeling is the squeeze of the market due to the rise of managed care.
If a trucking company's costs go up because of an increase in the price of fuel, should it be insulated from liability for injuries caused by the negligence of their drivers? In the end, Doctors will have to learn to live with the discipline of the market. A cap on non-economic damages will not change that.

5. Dwight Meredith (P.L.A.) points out two critical cases where the damages cap fails to help doctors fleeing because of malpractice insurance costs.

In this post, we noted that medical malpractice premiums for Doctors were about 3% of revenue. On average, Doctors pay less for malpractice coverage than rent on their offices.
In comments, PLA reader GP took issue with our post. GP raised two issues that need to be addressed. The first issue involves Doctors leaving practice because of high malpractice premiums. As GP wrote:

If you live in Las Vegas and you can't find an OB because they've all left town, will you wave these stats around when you are in labor in a crowded ER? If you have a severe head injury, will your economic figures be of any comfort to your family when the ER physician tells them they need to fly you somewhere else because the last neurosurgeon moved away a month ago?

GP is correct that a bunch of statistics will be cold comfort if one cannot find an Emergency Room Doctor when one is needed. He (or she) is also correct that Nevada is experiencing difficulty finding general surgeons to man the ERs.
Via, the Bloviator, we noted this article in the Las Vegas Review Journal.

Desert Springs Hospital has not had general surgeons available to care for emergency room patients this week and doctors who operate at the facility say it's a blow to the quality of health care in the Las Vegas Valley.
Hospital administrators said Monday the facility still had enough general surgeons to operate normally, but Tuesday in a written statement acknowledged that the hospital lacks surgeons to provide immediate care to emergency room patients.
An emergency room schedule from the hospital also indicates that there have been no general surgeons on call since Sunday. No surgeons are scheduled to be on call for the remainder of this month and all of April, according to the hospital's schedule…
Currently, the emergency department at Desert Springs is closed to patients with broken bones because the hospital lost nearly all of its orthopedic surgeons in January.

We agree with GP that the Nevada situation is terrible and needs to be addressed. The problem with GP’s argument, however, is that Nevada has already passed tort reform capping non-economic damages.
Last summer, Nevada passed a tort reform measure. That law:

Places a $350,000 cap on noneconomic damages in medical malpractice cases, creates a shorter statute of limitations and establishes a standard that holds physicians liable only for the damages for which they are responsible.
The law also puts a $50,000 limit on damages for hospitals and physicians who treat trauma patients, creates a medical error reporting system, requires more training for judges handling medical malpractice cases and holds lawyers responsible for costs of frivolous lawsuits.

If a cap of $50,000 on damages against doctors treating trauma patients still leaves Nevada hospitals without general surgeons to staff the Emergency Rooms, why does anyone think that the President’s proposed cap of $250,000 will solve the problem?
Our post also noted that some specialties such as obstetricians paid higher premiums for malpractice coverage. That may make sense in that a mistake by an OB can cause permanent damage to a newborn resulting in very expensive life long disability. On average, we noted, OB/GNYs nationwide pay 6.7% of their revenue for coverage.
GP took exception to that statistic as well:

although OB-GYN's nationwide may have a malpractice % of revenue rate of 6.7%, in Florida, even if they are pulling in a million dollars a year, their % of revenue rate is 20%.

Many media reports note that in South Florida, OBs are charged $200,000 for malpractice coverage. The problem with that argument is that Florida has already enacted tort reform for injuries caused by negligence in the birth process.
Under Florida law, non-economic damages are already capped at $100,000 in any instance in which, during birth, an infant sustains a brain or spinal cord injury caused by oxygen deprivation or mechanical injury and the infant is rendered permanently and substantially mentally or physically impaired.
If a damages cap would reduce the medical malpractice premiums for OBs in Florida, they would not now be paying $200,000 premiums.

6. Talking of Florida here is some recent news that answers part of the cost puzzle (1/1/04) (via commenter ItAintEazy on Dwight Meredith's Wampum post) - bold text is my emphasis:

SARASOTA, Fla. (AP) - 
A medical malpractice insurance carrier is raising its 2004 rates for Florida doctors by an average of 45 percent. 
GE Medical Protective, which covers about 2,500 doctors - or about 5 percent of the state market - said the increase had been approved by the state Office of Insurance Regulation.
"When you think about how medical costs will rise in the future, it becomes apparent that the costs of providing medical care to a plaintiff years down the road are astronomical," MedPro spokesman John Novaria said. "In order to meet those costs, we have to ask for higher premiums."
State regulators have approved only one other rate increase for a malpractice carrier: 8 percent for Jacksonville-based First Professionals Insurance Co., Florida's largest insurer of this kind, said Lisa Miller, an Office of Insurance Regulation spokeswoman.
First Professionals said its request could have been for a nearly 20 percent increase had there not been a recent law change limiting lawsuit damages in malpractice cases.
The Legislature earlier this year passed limits on some types of lawsuit losses in many medical malpractice cases in an effort to restore the market and stabilize premiums, which many doctors said were threatening their practices.
The law required insurers to factor in the new law and regulators determined that their rate requests should be lower by about 8 percent on average because of the damage limits and other changes in the law.
Miller said Fort Wayne, Ind.,-based MedPro's requested increase was justified.
"Their overall losses in this market justified the rate increase...," she said. "It really kind of brings them in line with the other carriers in the marketplace, and allows them to be able to continue to offer coverage."
Insurers have until Jan. 9 to submit their rate requests to the state, Miller said.

7. Kevin Drum (Calpundit) highlighted what is a key reason for higher insurer costs and malpractice insurance rates - the economic cycle and investment returns for insurance companies. Bold text is my emphasis and I've borrowed Kevin's charts and inserted them at appropriate locations in between the text.

Bill referred me to this report from the Center for Justice & Democracy, an anti-tort reform group. It suggests that despite the wailing of doctors and the insurance industry, malpractice payouts have not exploded in recent years. The chart on the right makes their case: the pink line shows total payouts, adjusted for both [medical -Ed.] inflation and for the number of doctors in practice, and indicates that while malpractice payouts did go up from about $3000 per doctor in 1975 to $7500 in 1988, they've stayed flat since then.

The real problem, according to the report, is that insurance companies actually make most of their money by investing the premiums they get. Thus premiums went up in 1975 and 1984 when their investment income plunged, declined during the 90s when investment income was robust, and are now going up again after the stock market crash of 2000. Their conclusion: the "crisis" in the cost of malpractice insurance has nothing to do with exploding payouts, but is instead just a result of a sour stock market that has reduced investment income.
So far so good. But here's the twist: it turns out that although the pink line is adjusted for inflation, it's adjusted for medical inflation, and this turns out to be quite a bit higher than ordinary consumer inflation. So I recreated the chart using ordinary inflation numbers, and the result is on the right. In constant 2001 dollars, payouts have increased from less than $1500 per doctor in 1975 to $7200 in 2001. In other words, payouts have gone up 5x even when adjusted for inflation, and have been far from flat since 1988.

So where's the truth? Probably somewhere in between. It's probably correct to use the rate of medical inflation for part of the calculation, since payouts are often based on the medical care that the victim requires due to the malpractice. But payouts are not solely intended for medical care, and pain and suffering payments certainly aren't. So the best measure would probably be one that splits the difference between medical inflation and ordinary consumer inflation.
However, perhaps more telling than a bunch of charts and figures is this excerpt from the report:

At the end of July 2002, Nevada enacted a $350,000 cap on non-economic damages for injured patients. Within weeks of the law's enactment, two major insurance companies announced that despite the new law, they would not reduce insurance rates for the foreseeable future.

In fact, the insurance industry's own lobbying group admits that tort reform is not likely to affect premium costs.
So what conclusions can we draw? Assuming that the basic figures in these charts are accurate (which I am agnostic about):

• Payouts for medical malpractice have not skyrocketed recently. There is no sudden "crisis."

• However, they have gone up steadily and significantly over the past 25 years.

• There is little question that low investment returns and mismanagement are a major part of the problems facing the malpractice insurance industry.

• Premiums are not unaffordable for doctors. By any measure, average premiums are lower today than they were 20 years ago.

• However, this varies by region and medical specialty. Although most doctors can still get affordable malpractice insurance, it's also true that there are severe problems in specific areas.

This is often what you find when you investigate tort reform. There are some problems, but tort reform advocates like to dwell on spectacular cases like asbestos or silicone implants. The problem is that it is their very rarity that makes these cases spectacular in the first place. If you peek behind the headlines and look at overall numbers, things don't seem nearly so bad: big awards usually get knocked down on appeal and the vast bulk of awards are relatively small and reasonable. There is probably a case to made for some moderate forms of tort reform, but fear of "runaway juries" is overblown and simply not supported by the evidence.
...
UPDATE: AtlanticBlog has an interesting additional nugget about the actual rate of medical inflation.

eRiposte note: Here are some additional points from the CJD report highlighting the importance of the industry cycle.

The following Exhibit shows the national cycle at work, with premiums stabilizing for 15 years following the mid-1980s crisis.

Prior to late 2000,the industry had been in a soft market since the mid-1980s. The usual six-to-ten year economic cycle had been expanded by the strong financial markets of the 1990s. No matter how much they cut their rates, the insurers wound up with a great profit year when investing the float on the premium in this amazing stock and bond market (the "float " occurs during the time between when premiums are paid into the insurer and losses paid out by the insurer — e.g., there is about a 15 month lag in auto insurance and a 5 to 10 year lag in medical malpractice). Further, interest rates were relatively high in recent years as the Fed focused on inflation.
But in the last two years, the market turned with a vengeance and the Fed cut interest rates again and again. This took place well before September 11th. The terrorist attacks sped up the price increases, collapsing two years of anticipated increases into a few months and leading to what some seasoned industry analysts see as gouging.¹ However, the increases we are witnessing are mostly due to the cycle turn, not the terrorist attack or any other cause. This is a classic economic cycle bottom.

8. Stephanie Mencimer writes the following in Washington Monthly (bold text is my emphasis). I recommend you read the whole article.

When he went out on strike last January, Dr. Robert Zaleski had his 15 minutes of fame. The Wheeling, W. Va., orthopedic surgeon was one of two dozen surgeons to walk off the job in January to protest his state's high costs of malpractice insurance. Arguing that "frivolous lawsuits" were driving up insurance premiums and forcing physicians to leave the state, Zaleski and his colleagues threatened to stay out for 30 days unless the legislature passed a bill that would cap non-economic damages in such suits at $250,000. As the walkout turned into a national story, Zaleski became one of its most visible faces, making the rounds of TV news shows and telling CNN, "I would certainly jump in front of a bus if I could to continue to serve my patients as I have for 23 years." Just a few weeks later, Zaleski's mug shot appeared with those of five other doctors in The New York Times Magazine, where he claimed to be "on the brink" of moving out of state because of high insurance rates and lawsuits.
Zaleski and his colleagues are the leading edge of a much broader movement. All across the country, doctors like him are telling reporters, legislators, and even their patients that frivolous lawsuits are driving up insurance costs and driving doctors out of practice and out of state, threatening access to care. They've mobilized around state legislation to limit malpractice lawsuits and linked arms with President Bush and Republicans in Congress who have been pushing similar bills in Washington. Indeed, Zaleski himself was even personally invited to attend a speech President Bush delivered in Scranton, Pa., where he railed against the threat to patient care posed by out-of-control lawsuits.
Upon closer inspection, however, it appears that Zaleski may be more a source of the problem than a victim of it. Between 1987 and 2002, according to the West Virginia Board of Medicine, patients filed 14 lawsuits against Zaleski, eight of which resulted in payouts that together came to $1.7 million. By contrast, according to a Public Citizen study, only 1 percent of the state's doctors made five or more malpractice payouts over the past decade. And while Zaleski says the settlement figures are misleading because they also include defense costs, his record is hardly squeaky clean. In a 1985 lawsuit (one not among the 14 reported to the Board of Medicine), he admitted in a deposition to being addicted to prescription painkillers for a substantial part of the time that he was operating on people in the early 1980s. Not only was he a drug addict, but to maintain his Percodan habit, Zaleski allegedly wrote prescriptions for other local addicts, who filled them and kicked back some pills to the doctor, according to court documents that include copies of the prescriptions and depositions from some of the addicts.
Yet even though a suspicious police officer reported him to the state medical board, Zaleski was never disciplined by his fellow physicians. (He says he does not remember the specifics of the case, and while he acknowledges a past substance-abuse problem, insists that he has been clean and sober for 21 years.) Given this history, the real scandal may not be how high Zaleski's insurance premiums are, but the fact that he can get insurance at all. Zaleski's malpractice record may have been extreme, but it was not unusual among the doctors who walked out of West Virginia hospitals in January. According to a Charleston Gazette report, nine of the 18 doctors striking at Wheeling Hospital, including Zaleski, had cost their insurers more than $6 million in malpractice settlements and judgments. At least some of the suits don't seem to merit the adjective "frivolous." In one case, a doctor had left a clip on an artery, eventually forcing the patient to have a liver transplant. In another, a surgeon cut into his patient's stomach wall during surgery, causing a massive, fatal infection. Indeed, a number of those doctors leading the protest movement include former drug addicts, felons, doctors whose licenses have been revoked, and many, many others who get sued a lot--and far more than most of their colleagues.
Not all the physicians angry about malpractice lawsuits and high insurance rates have such checkered histories as Dr. Zaleski. Many ethical and responsible doctors say the system invites frivolous litigation, subjecting them to considerable hassle and anxiety. One result, they argue, is an increase in "defensive medicine"--when doctors schedule too many tests, just to be safe--which contributes to higher health care costs for everybody. But even the respected General Accounting Office (GAO) has recently concluded that there's little evidence to back the striking doctors' main claim, which is that lawsuits are forcing many of them to abandon the practice of medicine or to avoid high-risk procedures. And while there's no doubt that malpractice insurance is getting more expensive across the board--about 30 to 40 percent, on average, during the last three years--this increase is largely due to the ailing stock market and poor business practices in a virtually unregulated industry. As a result, there's no reason to think that capping jury awards would bring premiums down, a fact the insurance industry itself acknowledges. Robert E. White Jr., president of First Professional Insurance Company, the leading medical malpractice insurer in Florida, told the Palm Beach Post in January, "No responsible insurer can cut its rates after a [medical malpractice] bill passes." The one surefire way to bring down the number of big-payout lawsuits is to reduce the number of those doctors who inspire most of them. But state medical boards--which are run by doctors--have been notoriously reluctant to aggressively police their own.
The doctors' protests aren't about good policy. They're about good politics. Although the malpractice strikes look like a natural outgrowth of physician frustration, they are, in fact, the product of a sophisticated lobbying campaign coordinated by Republican operatives and underwritten by business groups with little interest in the practice of medicine. GOP leaders view malpractice lawsuits as a pivotal issue for the 2004 campaign. With health-care costs skyrocketing on its watch, the GOP is eager to shift blame onto the Democrats, who have long enjoyed greater public trust on the issue. And doctors, who enjoy great credibility among voters, are the key. By linking rising health-care costs to frivolous medical lawsuits, Republicans can use doctors as a cudgel against trial lawyers, the Democratic Party's second-largest funding base and one which could be paralyzed by lawsuit caps.

 

VIII. COST OF DEFENSIVE MEDICINE - FACT OR FICTION?

1. As Dwight Meredith (P.L.A.) says (bold text is my emphasis):

One issue that always arises when the topic turns to medical malpractice is “defensive medicine.” Some doctors and tort reform advocates contend that the fear of law suits causes doctors to order or perform tests and procedures that are not medically necessary.
Estimates of the costs of defensive medicine vary greatly. The estimates range from $25 billion per year to $100 billion dollars per year.
If those estimates are even remotely correct, defensive medicine is an issue that needs to be addressed. The entire health care system pays only about $5 billion per year for malpractice insurance coverage. Having doctors spend up to $100 billion of other people’s money each year so as to avoid less than $5 billion in potential liability does not make any sense.
Regardless of the exact cost, defensive medicine should be minimized or avoided. Defensive medicine, by definition, increases the cost of health care to the entire society without the justification of medical necessity.
...
One way to end the pressure to practice defensive medicine is to have a set of bright lines defining the standard of care in all common and many rare situations. The doctor can then know that the additional test is required or is not required by the standard of care and that his or her decision will not be later second guessed by people without medical training.
How can such bright lines be determined in advance?
The problem is particularly difficult. Each patient, particularly in complex situations, presents a unique set of symptoms and risks. No two complex cases are exactly alike. It is very hard to write rules that contain bright lines in highly complex situations.
Secondly, each of the options available to the doctor has its own set of potential risks, rewards and costs. As a society, we simply cannot afford for each patient to have all of the procedures and all of the tests that might prove beneficial. Someone has to decide whether the potential benefits of the procedure are worth the costs. Doctors are trained in making people well. They have no particular expertise in making socio-economic choices.
...
One solution to the problem of defensive medicine is to adopt a single payer system of health care finance. If the government purchased all of the health care provided in the society, the decisions concerning the costs and benefits of medical procedures and tests would be made by the society as a whole through the political bodies.
By determining that, in a certain circumstance, the society either would or would not pay for a certain test or procedure, the bright line of the standard of care would be established.
Doctors, when considering a test or procedure, would determine whether or not the cost of that procedure would be paid. If the society chose not to pay for the test in that circumstance, the doctor would know that it was not required by the standard of care. The doctor would run no liability risk in falling to order the test.
We are not sure whether or not a single payer system of financing health care would be good public policy. We are still thinking about that issue. We are reasonably confident, however, that it would go a long way towards solving the problem of defensive medicine.

IX. DEATHS/INJURIES DUE TO MALPRACTICE/ERRORS - FACT OR FICTION?

1. Dwight Meredith (P.L.A.) has a Tort Reform Quiz here, and I am highlighting a relevant question and answer:

All answers were taken from or calculated from information contained in USA Today report. Many thanks to the indispensable Bloviator for the link.

...

8) A 1999 study by the Institute of Medicine, an arm of the National Academy of Sciences, found that the number of people who died in hospitals as a result of medical mistakes was:
a) less than 10,000
b) between 10,000 and 40,000
c) between 40,000 and 100,000
d) more than 100,000

Answers

...

8) C. “A 1999 study by the Institute of Medicine, an arm of the National Academy of Sciences, blamed medical mistakes for the deaths of 44,000 to 98,000 hospitalized Americans each year.”