Lawmakers eye caps on cash for medical mistakes

Valerie and David Sloan talk about their late son Billy, 11, in their Reidsville kitchen. He died 10 years ago after he was misdiagnosed by doctors. OWEN RILEY JR./Staff e-mail this story

Maybe he'd have had a serious girlfriend or a job he loved. But Billy Sloan died of a ruptured appendix 10 years ago when he was 11.

His parents, Dave and Valerie, won $1.5 million from a Spartanburg County jury after suing the doctors who misdiagnosed his illness.

They, like thousands of others, are caught in the middle of a nationwide debate over medical malpractice, the large awards that juries sometimes give and the premiums that insurance companies charge doctors.

Legislation that would limit the amount of such awards was introduced in the South Carolina General Assembly last week.

Supported by South Carolina First, an alliance of businessmen, it would limit non-economic damages to $250,000, hold defendants liable only for the damages they caused and prevent plaintiffs from shopping for juries in counties noted for large awards. It targets more than medical liability, focusing on making the legal environment more attractive to business to increase economic development, said Cam Crawford, the executive director.

Legislatures in 17 other states are also considering tort reform, according to the American Medical Association. So is Congress.

But there is no clear answer as to who is responsible for the premiums doctors pay.

The debate

The AMA, pressing for limits, blames greedy lawyers, who take large chunks of each award, frivolous lawsuits and juries.

"The AMA has found that our nation has a full-blown crisis in at least a dozen states...(where) ob-gyns have been forced to stop delivering babies, trauma centers have closed, and physicians are grappling with how they can continue to provide other high-risk procedures," said Donald Palmisano, AMA president-elect. Malpractice insurance is the group's top legislative priority, he said.

But lawyers point to the doctors themselves who want to protect their incomes at the expense of patients who've suffered egregious medical injuries.

"Everybody, including the insurance industry, will tell you that caps will not lower premiums," said William H. Nicholson III, president of the South Carolina Trial Lawyers Association.

"Doctors who stage walkouts are falsely demonizing America's legal sytem," said Joan Claybrook, president of Public Citizen, a nationwide consumer group which says AMA exaggerates the exodus of doctors to push the tort reform agenda.

Limiting damages will only hurt those most severely injured by medical errors, she said.

According to a Public Citizen analysis, the number of lawsuits filed declined 4 percent between 1995 and 2000 while the average payment for a grave injury such as blindness or paralysis was set at $454,454 between 1985 and 2001.

Others say the insurance companies themselves are to blame.

Public Citizen and Americans for Insurance Reform, a coalition of more than 100 independent consumer and public interest groups, said studies and government reports show premiums have increased across all insurance lines, not just malpractice.

Insurers keep premiums for some customers artificially low to attract business and amass investment capital, and then lose the money in the stock market. Some insurers then stop offering malpractice insurance, leaving the remaining companies to assume greater risk.

"Insurers, whose own investment actions have made insurance unaffordable and unavailable, are blaming others for their own mismanagement by manufacturing a crisis for surgeons and other doctors that simply should not exist," said J. Robert Hunter, of the Consumer Federation of America and former Texas Insurance Comissioner.

Hard market

Julie Pulliam, spokeswoman for the American Insurance Association, which represents more than 400 insurers, said the industry is in a "hard market" that has caused increases across most lines.

"Insurers make their money through investments and have been affected by the stock market like everybody else has," she said. "When the economy is good, it helps you moderate premiums. But investment income has gone South over the past couple of years."

But she says other factors contribute to rising premiums as well, including the massive losses from Sept. 11, medical inflation and increasing litigation costs.

The Sloans differ in their opinions on limiting awards. Valerie Sloan disagrees with limits. But Dave Sloan, an automotive teacher at a technical college, said non-economic damages, also known as pain and suffering, and punitive damages should be capped, but not at $250,000.

"What I'm afraid of is if they set a limit of $250,000, the bean counters are going to sit back and say, 'You know what? We can afford to pay that out X amount of times and it still won't cause us any financial hardship,' " he said. "There's no accountability there."

"In any other kind of business, you can 'not shop' or write Consumer Reports," said Amey Dykema, who spent eight years suing health care providers after her 38-year-old husband, an engineer at GE Turbines in Greenville, died of blood clots in his lungs that were repeatedly misdiagnosed as a respiratory infection.

Dykema won $2.5 million in 1999. The state Supreme Court upheld the award last year.

The Dykemas moved to Greenville in 1987. Around Christmas 1993, Amey remembers, the usually healthy 38-year-old David developed a cough, shortness of breath, rapid heart beat and chest pain. The family doctor told him he had a respiratory infection and environmentally-induced asthma, she said. But over the next few weeks, walking, even tying his shoes, became too much. He died of blood clots in his lungs.

Valerie and David Sloan said they were looking for answers when they filed their lawsuit.

"We wanted to know how in this modern day and age does a child go into a hospital three times, is seen by five or six doctors and is released and die of a ruptured appendix," said Dave Sloan, 52. "And they wouldn't talk to us."

Billy, the eldest of the Sloans' four sons, was diagnosed as suffering from a virus.

"We never got to speak to him again," said Valerie Sloan in her modest, suburban home, tears spilling down her face. "He laid in a coma from Friday until Monday at 12:37 in the morning when he died."

No easy answers

The answer remains elusive.

Consumer groups say insurance business practices must be reformed. Beyond that, they say, other measures include implementing safety measures recommended by the Institute of Medicine, opening the National Practitioner Data Bank to make disciplinary information about doctors available to the public, limiting physician work weeks to lessen the chance of errors due to fatigue, and improving physician oversight.

Greenville orthopedic surgeon Dr. John Evans, chairman of the board of trustees of the South Carolina Medical Association, said awards should be paid out over time instead of in lump sums. He also said lawyers' contingency fees should be scaled back.

Better discipline of doctors also should be considered, the consumer groups say. Five percent of physicians nationwide are responsible for more than half of all malpractice payouts, according to Public Citizen. In South Carolina, 3.2 percent of doctors are responsible for 78 percent of the malpractice suits, said Jackson Williams, legislative counsel with Public Citizen, which analyzed information on the National Practitioner Data Bank. And while 23 of every 1,000 physicians are sued nationwide, 11 of 1,000 are sued in the Palmetto State.

In South Carolina, 89 doctors lost or settled three or more lawsuits and 14 were disciplined, he said. The report also showed 43 doctors had four or more lost or settled suits and nine were disciplined.

"Only better oversight by state medical boards, not draconian limits on patients' legal rights, can reduce the tens of thousands of deaths and injuries they cause," Claybrook said.

"Why is it the majority of doctors who've never had a payout aren't given a deep discount in premiums as opposed to subsidizing the repeated terrible performance of those with multiple payouts?" said Public Citizen's Dr. Sidney Wolfe.

But Evans said the fact few doctors are responsible for the majority of payouts doesn't necessarily make them bad doctors. They may simply be working in high-risk specialties that are sued more often, such as emergency medicine. And being sued doesn't necessarily lead to sanctions by oversight boards, he says, because the suit may not have anything to do with an action governed by the board.

"There are bad apples and they do get by," Evans said. "But the impression is that the fox is guarding the henhouse. We want the bad apples weeded out as much as anybody."

Resolving the issue will require a comprehensive approach that ensures adequate access to health care, said Dr. Georges Benjamin, exective director of the American Public Health Association.

A process should be developed to weed out invalid suits, to determine who's at fault in cases that proceed so only those responsible are sued, and to reasonably compensate those who've been harmed, he said.

Greenville attorney Mike Parham said the $250,000 limit would discriminate against homemakers, children and senior citizens because they have no earnings, and potential income cannot be considered. And while big jury awards gain notoriety, he said, they don't occur that often.

In more than 20 years, he's had two multi-million verdicts and two in the $900,000-$1 million range, he said.

Parham said he gets about 1,500 complaints against health care providers each year and files about 10 lawsuits. Most are settled.

Lawyers in South Carolina typically take between 33 and 40 percent of the award, Parham said. But he said it's not unusual to spend between $30,000 and $40,000 to bring a case to trial, between expert witnesses - which can include medical specialists, therapists, economists - travel, exhibits, blowups, depositions, court reporter fees and staff time. The Dykema case cost $140,000, he said.

For the Sloans, it was never about money.

"We were always a pretty close family. But after something like this..." said Dave Sloan, pursing his lips and glancing away for strength, "you look at things from a whole different perspective."

His wife said, "If it makes one doctor think the next time a boy comes in with a pain in his side, that maybe we ought to do the ultrasound or all the other tests they can do, to see what's going on in there, and it saves one life, that's what we want."