Las Vegas Sun

March 28, 2024

Election win puts doctors in the waiting room

WEEKEND EDITION

November 6 - 7, 2004

Armed with an election victory that will limit the damages injured patients can collect for pain and suffering from medical malpractice, Nevada doctors must now wait to see whether they will get the results they desire.

That wait could take several years.

Passage of Question 3 by a margin of 465,321 to 318,189 in Tuesday's election was the result of a hard-fought campaign waged by physicians under the banner "Keep Our Doctors in Nevada."

They convinced the public that health care access and affordability would suffer without tighter restrictions on medical-malpractice lawsuits.

But implementation of Question 3, which amends a state law passed during a special legislative session in 2002, raises at least three major questions:

Will insurance companies lower medical-malpractice insurance rates and will the reductions be enough to appease physicians who say their rates skyrocketed by as much as 300 percent since 2001 because of the high cost of malpractice litigation? If they do lower rates, when will they do it?

Will legal challenges be filed against Question 3 and, if so, how long will it take for those disputes to be resolved?

What effect, if any, will passage of Question 3 have on other states with costly malpractice insurance rates, and will it prod Congress to pass a federal law addressing similar restrictions on damage awards?

Question 3 established a $350,000 cap -- with no exceptions -- on the amount of damages an injured patient can collect for pain and suffering. It eliminated a clause in the 2002 law that granted exceptions to the cap for gross negligence and for special circumstances as determined by the courts.

The ballot measure also applies the cap per case, amending another provision in the 2002 law that allowed the cap to be multiplied by the number of plaintiffs and defendants in the case. The new law takes effect on Nov. 23, the day the election results are canvassed by the Nevada Supreme Court and Secretary of State Dean Heller.

The intent of Question 3 is to make it easier for insurance companies to predict the amount of money they will have to pay as a result of malpractice settlements and judgments. Doctors hope that the predictability of a cap on damages for pain and suffering will lead to lower malpractice insurance rates, making it easier for physicians to stay in business.

"Most physicians are excited that Question 3 passed," said Dr. John Martin, newly elected president of the Clark County OB/GYN Society. "This will have an impact nationally because it shows that voters want some stability in medical liability insurance so that doctors aren't leaving the state."

Whether insurance rates actually go down is up to insurers, subject to the Nevada Insurance Division's approval.

There are seven insurance companies that write policies for 3,315 Nevada physicians, according to the division. They are led by the Nevada Mutual Insurance Co. (1,386 doctors) and the state-created Medical Liability Association of Nevada (843 doctors), which combined have 67 percent of Nevada's medical-malpractice insurance market.

Question 3's passage was greeted enthusiastically by Chip Wallace, Nevada Mutual director. He said the company could be lowering its rates within a matter of weeks, depending on feedback from its lawyers and analysis of the ballot measure's potential effect on costs.

"Now we have to do the math," Wallace said. "It's not a matter of 'if' we'll lower rates. It's a matter of 'how much?' Yes, rates will be reduced."

Rates could drop even more if and when Question 3 passes constitutional muster, Wallace said.

"We want to see how the judges and trial lawyers react to this," he said.

Over at the Medical Liability Association, rates may not be reduced until after any constitutional issues are settled, Chairman Robert Byrd said.

"We're delighted that Question 3 passed," Byrd said. "The long-term effect on rates will be positive if it passes constitutional muster. That's the bottom line. On the other hand, I wouldn't expect the rates to go up.

"It's such a drastic change in the law that I would expect a constitutional challenge."

Las Vegas attorney Jim Wadhams, a lobbyist for the Nevada insurance industry, also said he does not expect to see much of a decline in insurance rates until all legal issues, if any, are settled.

"If the Nevada Supreme Court determined that it is constitutional, you would see some significant rate relief," Wadhams said. "I'm guessing it would be anywhere from 20 percent to 40 percent."

Immediately after the election results were known, attorney Gerald Gillock, Nevada Trial Lawyers Association president, predicted that a challenge on behalf of an injured patient would be filed within a year.

But the actual time it could take for a reasonable constitutional challenge to make its way through District Court could be four to six years, with an additional 18 to 26 months for the Nevada Supreme Court to deliver a decision on appeal, according to Jim Crockett, another prominent Las Vegas attorney who is well versed in the state's medical-malpractice laws.

If that sounds like a long time, consider that it took the California Supreme Court until 1985 to settle all legal challenges to a 1975 law passed in that state that placed a $250,000 cap on damages for pain and suffering with no exceptions in medical-malpractice cases.

"Anytime you create a special class of individuals and restrict their rights, the (Nevada) Constitution says you cannot create an invidious distinction unless you can demonstrate a rationale to show that the public benefit outweighs the harm to the smaller group," Crockett said.

Crockett said it could be argued that Question 3 places unconstitutional limits on injured patients because damages for pain and suffering are now capped, which he said is not the case for victims of automobile accidents or malfunctioning products.

"In the right hands it can be found that this measure is unconstitutional," Crockett said of Nevada's legal system.

Nevada doctors say they are bracing for the likely court challenge.

"We never have expected the attorneys to go away quietly," Martin said. "We anticipate a constitutional challenge because this hits attorneys right in their pocketbooks."

Even if the courts determine that Question 3 is constitutional, Crockett said there is no guarantee that it will cause insurers to lower their rates.

"Why should they lower their rates?" Crockett said. "Are doctors going to stop buying insurance?"

An American Bar Association spokesman declined comment on Question 3's passage, but referred to its policy, which opposes caps on damages for pain and suffering in all personal-injury cases, including medical malpractice.

"Trial and appellate courts should more efficiently control pain and suffering verdicts which are either so excessive or so inadequate as to be disproportionate to the injury suffered or to community expectations," the policy states.

There has been considerable disagreement among doctors and lawyers over the effect California's law -- which was used as a model for Question 3 -- has had on malpractice insurance rates in that state. Physicians argue that the law has resulted in much lower and more stable insurance rates for doctors in California than in other states that don't have such rigid caps on damages for pain and suffering.

Lawyers say that the real reason California malpractice insurance rates began declining had more to do with passage of a separate rate reduction proposition in 1988 that gave the public more input into proposed rate hikes.

Regardless, Nevada is one of 22 states with caps on damages for pain and suffering in medical-malpractice cases, according to information provided by the American Medical Association. Five states have caps on total damages, including actual damages awarded to injured patients for medical bills and for past and future lost wages. Nevada does not cap actual damages.

Nevada was one of four states on Tuesday that had ballot measures related to medical malpractice. It was the only state where doctors emerged completely victorious. Doctors scored mixed results in Florida and Wyoming and lost a battle in Oregon.

Florida voters approved an amendment to the state constitution to place limits on the amount of fees a plaintiff's attorney can collect in a medical-malpractice case. Question 3 in Nevada also placed limits on attorneys' fees, tying them to the size of the settlement or judgment.

But Florida voters also approved constitutional amendments to deny licenses to doctors with three malpractice incidents and to make physicians' records public when they have been involved in medical malpractice.

Wyoming voters amended the state constitution by creating a medical-review panel to weed out meritless lawsuits against doctors and hospitals, something Nevada phased out with the law passed in 2002. But Wyoming voters narrowly rejected another proposed amendment that would have allowed laws to establish limits on damages for pain and suffering.

Oregon voters also rejected a proposed constitutional amendment that would have capped damages for pain and suffering.

Proponents of Question 3 say they succeeded because they had a considerable amount of time to make their case to the public and were able to put a human face on the issue. Conversely, Wadhams said he believed lawyers failed to put a human face on two other ballot initiatives that could have eliminated caps on damages for pain and suffering but were voted down.

"I am much closer to my doctor, who I may see a couple of times a year," Wadhams said. "Most people do not have a personal relationship with a personal-injury lawyer. Physicians were able to put a physician's face on the issue."

Already, Dr. Rudy Manthei, a local ophthalmologist who chaired the "Keep Our Doctors in Nevada" initiative effort, has been contacted by six governors he wouldn't name and by numerous physicians' groups in other states that are seeking to cap damages for pain and suffering.

"One reason Question 3 passed is that patients trust doctors with their lives," Manthei said. "We've been dealing with this issue at a crisis level for over three years. The time it took to educate the public so that they could feel very comfortable with the issue was very important to us. In Oregon, the doctors had less than nine months to make their argument."

Another key was that doctors were careful not to frame the issue as simply "what's best for physicians," Manthei said.

Plaintiffs' lawyers argued that doctors had exaggerated the effect the medical-malpractice issue had on health care in Nevada and maintained that there has been a net gain of physicians in the state since the 2002 law went into effect.

But by supporting Question 3, voters were saying they were convinced by arguments from the doctors that the high cost of medical-malpractice insurance was forcing many of their colleagues -- particularly in high-risk specialties such as obstetrics and gynecology -- to close their practices or leave the state.

"It was about the overall question of health care costs and the loss of accessibility to health care," Manthei said. "As a voter you're going to vote for what is in the best interests of your family. If this was something that would just benefit doctors, I doubt it would have passed."

It is possible that Question 3's victory will be used by the American Medical Association to lobby Congress next year to pass a federal cap on damages for pain and suffering.

Dr. John Nelson, the association's president, also said the victory in Nevada could be the "canary in the mineshaft" that convinces states such as Pennsylvania and Connecticut to use the initiative process to place caps on damages for pain and suffering in malpractice cases.

"The patients and physicians of Nevada will be well served by Question 3," Nelson, a Salt Lake City obstetrician/gynecologist, said. "It will put sensibility back into a broken system."

The House, on nine occasions, has approved a cap on damages, only to be rebuffed by the Senate. The issue is partisan in nature -- Republican President Bush made it part of his re-election platform to seek a cap on damages for pain and suffering, something Senate Democrats oppose.

Now that the Republicans will have 55 senators, Nelson hopes that a federal cap on damages will be adopted in the next session, although the GOP is still five votes away from a filibuster-proof majority.

"We've been more successful at the state level," Nelson said. "But getting limits on liability is not the endgame. It's only a starting point. What we want to see is a fundamental change in the liability system such as through a dispute resolution system."

Lawyers and consumer advocacy groups such as Washington-based Public Citizen vow to fight proposed caps on damages at the federal level. They will continue to press for changes in the way the insurance industry sets its medical-malpractice insurance rates.

Public Citizen President Joan Claybrook said insurers should be required to spread the risk among all physicians so that high-risk specialists aren't paying so much more for insurance than other doctors.

Passage of Question 3, she said, "adds a negative cast to this issue and is so fallacious because the reason for the high insurance rates has nothing to do with lawsuits.

"The remedy is not to take away the rights of the injured patients," Claybrook said. "The people who are injured the worst are the ones who are affected by the caps. The remedy is to reform the insurance system."

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