Malpractice insurers blast tort reform bill

Posted on December 12, 2013 by

Author: Dave Williams

Publication: Atlanta Business Journal

URL: http://m.bizjournals.com/atlanta/news/2013/12/11/malpractice-insurers-blast-tort-reform.html?page=all&r=full

Legislation that would scrap the current litigation-based system for resolving medical malpractice claims in Georgia would replace it with a government bureaucracy that would drive up costs, the bill’s opponents said Wednesday.

Skin Edge, a lobbyist representing MAG Mutual Insurance Co., Georgia’s largest medical malpractice insurer, cited a New York University analysis of the legislation that predicted having a review panel of doctors rather than juries award compensation to medical malpractice victims would cost up to $43.9 million a year.

“We’re talking about a government takeover of the medical malpractice system … [with] more claims, higher costs, more taxes and more bureaucracy,” he said.

“This concept has never been tried anywhere in the United States,” added Joe Cregan, MAG Mutual’s general counsel. “[It’s] an experiment with no observable data or track record.”

Georgia insurers, many physician groups and trial lawyers have joined forces opposing medical tort reform legislation introduced in the state Senate last winter that would create a new compensation system based on the nearly century-old workers compensation process.

On the other side supporting the bill are Patients for Fair Compensation, a nonprofit founded by an Atlanta-area health-care staffing firm executive and the business community, notably Bernie Marcus, co-founder and former CEO of The Home Depot Inc. Marcus recently co-founded the Job Creators Network Foundation, a pro-free enterprise nonprofit.

A key point of contention in political and academic circles over the bill is whether it’s constitutional.

On Wednesday, Frank Vandall, a law professor at Emory University, told a Senate subcommittee the legislation is unconstitutional because it would deprive medical malpractice victims in Georgia of their right to a trial by jury.

He based his argument on a Georgia Supreme Court ruling in 2010 that overturned a provision in a 2005 tort reform law passed by the General Assembly that set a $350,000 cap on non-economic damages in medical malpractice cases.

“If they threw out a cap on a small portion of the jury trial system, even more so will they toss out something gets rid entirely of the right to a jury trial,” Vandall said.

Two former state attorneys general already have weighed in on the issue before the subcommittee. Mike Bowers agreed with Vandall’s take on the question back in September.

But a month later, Thurbert Baker testified that the bill is constitutional. He argued the legislation would set up an entirely new system of determining compensation for medical malpractice victims, as workers compensation did in Georgia back in 1920.

Since workers comp passed constitutional muster, Baker concluded, the proposed malpractice compensation system would be upheld as well.

Another issue that has come up during hours of hearings during the last several months is whether the current system needs to be fixed.

On Wednesday, Bill Clark, director of political affairs for the Georgia Trial Lawyers Association, said malpractice insurance premiums have gone down since the 2005 tort reform law, the doctor-to-patient ratio in Georgia is at an all-time high and doctors win 92 percent of medical malpractice cases.

“If I’m a doctor, and I’ve got a .920 batting average, why would I want more?” Clark asked.

But Alfredo Ortiz, president of the Job Creators Network Foundation, said the current litigation-based system is a major driver of soaring health-care costs hitting businesses’ bottom lines.

“Health insurance hyperinflation is literally eating up raises and take-home pay,” he said. “For businesses, health care is a significant cost center.”

The subcommittee is expected to issue a report with its recommendations on the legislation before the 2014 session of the General Assembly convenes in mid-January.