Looming Medical Malpractice Issues

1. Looming Medical Malpractice Issues Leadership Conference Hilton Capitol Center Saturday, February 22, 2008

2. The Cap La. R.S. 40:1299.42(B). B.(1) The total amount recoverable for all malpractice claims for injuries to or death of a patient, exclusive of future medical care and related benefits as provided in R.S. 40:1299.43, shall not exceed five hundred thousand dollars plus interest and cost. • A health care provider qualified under this Part is not liable for an amount in excess of one hundred thousand dollars plus interest thereon accruing after April 1, 1991, for all malpractice claims because of injuries to or death of any one patient. (3)(a) Any amount due from a judgment or settlement or from a final award in an arbitration proceeding which is in excess of the total liability of all liable health care providers, as provided in Paragraph (2) of this Subsection, shall be paid from the patient's compensation fund pursuant to the provisions of R.S. 40:1299.44(C). (b) The total amounts paid in accordance with Paragraphs (2) and (3) of this Subsection shall not exceed the limitation as provided in Paragraph (1) of this Subsection.

3. La. Const. art. I, sec. 3: §3. Right to Individual Dignity. Section 3. No person shall be denied the equal protection of the laws. No law shall discriminate against a person because of race or religious ideas, beliefs, or affiliations. No law shall arbitrarily, capriciously, or unreasonably discriminate against a person because of birth, age, sex, culture, physical condition, or political ideas or affiliations. Slavery and involuntary servitude are prohibited, except in the latter case as punishment for crime.

4. Regarding heightened equal protection scrutiny of caps, the Supreme Court of Louisiana has stated: Article I, Section 3 commands the courts to decline enforcement of a legislative classification of individuals in three different situations: (1) When the law classifies individuals by race or religious beliefs, it shall be repudiated completely; (2) When the statute classifies persons on the basis of birth, age, sex, culture, physical condition, or political ideas or affiliations, its enforcement shall be refused unless the state or other advocate of the classification shows that the classification has a reasonable basis; (3) When the law classifies individuals on any other basis, it shall be rejected whenever a member of a disadvantaged class shows that it does not suitably further any appropriate state interest. With the adoption of these guarantees Louisiana moved from a position of having no equal protection clause to that of having three provisions going beyond the decisional law construing the Fourteenth Amendment. * * * Sibley v. L.S.U. Board of Supervisors, 477 So.2d 1098, 1107-1109 (on rehearing) (La. 1985).

5. The statutory prohibition against a malpractice judgment in excess of 500,000 dollars classifies individuals because of their physical condition. The law on its face is designed to impose different burdens on different classes of persons according to the magnitude of damage to their physical condition. The statute creates two classes: one, a group of malpractice victims each of whom has suffered damage that would oblige a defendant under our basic law to repair it by paying in excess of 500,000 dollars; another, a class consisting of victims whose damages would not require an award over this amount to make individual reparation. Victims in the former class are prevented from recovering for all their damage, while those in the latter class are allowed full recovery. Damage to the physical condition of each malpractice victim is the primary element of his damage and a primary cause of his being assigned to one of the two classes. Thus, the statutory classification disadvantages or discriminates against one class of individuals by reason of or because of their physical condition. * * * Sibley v. L.S.U. Board of Supervisors, 477 So.2d 1098, 1107-1109 (on rehearing) (La. 1985).

6. Jane Sibley clearly fits within the class of individuals disadvantaged by the statutory classification. Accordingly, the state or the LSU Board is obliged to show that there is a good reason for the statutory classification, that is, that the legislative classification substantially furthers a legitimate state purpose. • Sibley v. L.S.U. Board of Supervisors, 477 So.2d 1098, 1107-1109 (on rehearing) (La. 1985).

7. La. Const. art. I, sec. 22: §22. Access to Courts Section 22. All courts shall be open, and every person shall have an adequate remedy by due process of law and justice, administered without denial, partiality, or unreasonable delay, for injury to him in his person, property, reputation, or other rights.

8. Regarding adequate remedy guarantees, the Supreme Court of Louisiana has stated: From this history, we conclude that in adopting art. 1, § 22, the Constitutional Convention did not intend to limit the legislature's ability to restrict causes of action or to bar the legislature from creating various areas of statutory immunity from suit. * * * The constitutional guarantee providing for open courts and insuring a remedy for injuries does not warrant a remedy for every single injury; it applies only to those injuries that constitute violations of established law which the courts can properly recognize. […]We interpret art. 1, § 22 to be a mandate to the judiciary of this state rather than a limitation on the legislature. Article 1, § 22 guarantees that the courts will be open to ensure an adequate remedy by due process of law; however, where, as here, a person has no cause of action that is a vested property right, this constitutional provision affords no substantive relief. Crier v. Whitecloud, 496 So.2d 305, 309-310 (on rehearing) (La. 1986).

9. La. Const. art. I, sec. 2: §2. Due Process of Law Section 2. No person shall be deprived of life, liberty, or property, except by due process of law. La. Const. art. V, sec. 1: §1. Judicial Power. Section 1. The judicial power is vested in a supreme court, courts of appeal, district courts, and other courts authorized by this Article.

10. In 1992, the Supreme Court of Louisiana found the cap constitutional: As an offset to the Act’s $500,000 limitation, Louisiana now offers most severely injured by medical malpractice three benefits: (1) greater likelihood that the offending physician or other healthcare provider has malpractice insurance; (2) greater assurance of collection from a solvent fund; (3) payment of all medical care and related benefits. Compensation and full medical care for those grossly injured by medical malpractice are legitimate social interests, which are furthered by the malpractice legislation. The discrimination in the Act against those with excessive injuries is accompanied by a quid pro quo: a reasonable alternative remedy has been provided. See Bazley. Since the legislature’s statutory solution to the medical malpractice problem furthers the state’s purpose of compensating victims, it is not constitutionally infirm. Overall, the Louisiana Medical Malpractice Act represents a reasonable but imperfect balance between the rights of victims and those of healthcare providers. It does not violate the state or federal constitutions. (Underlining added.) Butler vs. Flint Goodrich Hospital, 607 So.2nd 517, 521 (La. 1992), cert. den., 508 U. S. 909, 113 S.Ct. 2338, 124 L. Ed.2d 249 (1993).

11. Arrington v. Galen-Med, Inc. and Taylor v. Clement: 2 Grounds: 1. The value of the cap has gone down - $500,000.00 in 2003 worth only $160,000.00 in 1975 dollars. 2. The statutory admission of liability provided at the MMA has been eroded. La. R.S. 40:1299.44(C)(5)(e): (e) In approving a settlement or determining the amount, if any, to be paid from the patient's compensation fund, the trier of fact shall consider the liability of the health care provider as admitted and established where the insurer has paid its policy limits of one hundred thousand dollars, or where the self-insured health care provider has paid one hundred thousand dollars.

12. The Judge in Arrington and Taylor found the cap constitutional, but stated: The erosion of the only benefits to the plaintiff’s “liability” being admitted against the Fund once the health care provider had settled with the patient and the fact that the “cap” amount of $500,000.00 which was created in 1975 is now eroded to approximately $160,000.00 in today’s dollar value. This means that the Act is no longer giving the equal “quid pro quo” to the plaintiff and has eroded their rights to the point where they have none. This should addressed by the legislature.

13. The plaintiffs appealed to the Court of Appeal, Third Circuit, which found the statute unconstitutional vis a vis guarantees of adequate remedy, quoting the Trial Court’s Reasons for Judgment and discussing the power of the judicial branch of government. We took writs to the Supreme Court of Louisiana which reversed the ruling of unconstitutionality on procedural grounds, because the plaintiffs had not asked the Trial Court to find the cap unconstitutional vis a vis adequate remedy. Both cases are in the Trial Court awaiting a Sibley hearing.

14. December 2007 – Sibley hearing in the same Trial Court in a different case – Joe Oliver vs. Magnolia Clinic: Our expert actuary testified and was not contradicted: 1. that if the cap on the recovery of medical malpractice damages provided at La. R.S. 40:1299.42(B) were abolished entirely then LAMMICO’s annual medical malpractice insurance premium for the average Louisiana physician would rise immediately from $10,272.00 to approximately $40,761.00; 2. that if the cap were abolished entirely then LAMMICO’s annual medical malpractice insurance premium for a Louisiana neurosurgeon would rise immediately from $41,088.00 to approximately $163,044.00; 3. that if the cap were abolished entirely then LAMMICO’s annual medical malpractice insurance premium for a Louisiana OB/Gyn would rise immediately from $23,624.00 to approximately $93,750.00;

15. 4. that if the cap were abolished entirely then approximately 184 Louisiana physicians insured by LAMMICO would have liability in excess of the cap; 5. that a significant effect of the cap is to keep medical malpractice insurance premiums in Louisiana at a lower, more affordable level; 6. that a significant effect of the cap is to increase the likelihood that medical malpractice insurance companies in Louisiana will remain solvent;

16. 7. that a significant effect of the cap is to increase the likelihood that the offending Louisiana physician or other healthcare provider has malpractice insurance; 8. that a significant effect of the cap is to increase the likelihood of collection from a solvent fund in Louisiana; 9. that the uncertainty in estimating reported but not paid losses and in predicting incurred but not reported losses is significantly greater in the medical malpractice line of insurance, so a cap on medical malpractice damages is particularly effective.

17. Our expert medical economist testified and was not contradicted: 1. that from 1975 through 2006, the dollar cost of medical goods and services increased 1.97 times faster than the dollar cost of non-medical goods and services; 2. that because of the difference in the increase of dollar costs over the years, a patient severely injured as a result of medical malpractice is economically better off recovering medical malpractice damages in Louisiana in 2007 than in 1975; 3. that from 1975 to the present, the health benefit received from medical care has steadily increased.

18. 4. that because of the increase in health benefit, a patient severely injured by medical malpractice is physically better off receiving unlimited medical care pursuant to the Medical Malpractice Act in 2007 than receiving unlimited medical care in 1975 and later; 5. that the increases in medical malpractice premiums that our expert actuary testified would occur if the cap were abolished would cause a substantial increase in the overhead costs of any medical practice and would cause physicians to move to states with caps, thereby reducing the access of Louisiana residents to health care.