Malpractice reform debate coming to Kentucky

Forty years ago, as a lobbyist for the Insurance Institute of Indiana, Frank Cornelius helped persuade the state legislature to pass what was acclaimed as a pioneering reform of medical malpractice law — a $500,000 cap on damage awards and elimination of all damages for pain and suffering.

Fourteen years later, as the victim of malpractice during and after routine knee surgery, he was left wheelchair-bound and tethered to a respirator and a morphine drip.

Writing in The New York Times in an op-ed piece headlined “Crushed by My Own Reform,” he told how his lifetime medical expenses and lost wages were projected at $5 million, money he could never recover, thanks to his own handiwork.

“Make no mistake, damage caps are arbitrary, wholly disregarding the nature of the injury and the plaintiff’s pain,” wrote Cornelius, who died the next year. “They extend unwarranted protection to the medical industry and remove the only effective deterrent to negligent medical care.”

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In their coming legislative session, Kentucky lawmakers are poised to enact their own version of what proponents call tort reform, now that Republicans have taken control of the House for the first time in 95 years, giving the GOP both chambers.

On its website, the Kentucky Chamber of Commerce says, “It is time for Kentucky to say enough is enough to the personal injury lawyers who prey upon our healthcare providers and cost the rest of us a lot of money.” And House and Senate leaders proclaimed at the chamber’s legislative preview conference this month that malpractice reform is among their highest priorities.

Supporters of tort reform, like Louisville emergency room Dr. Robert Couch, say “sky-is-the-limit” liability forces physicians to order unnecessary tests and procedures and that eliminating such defensive medicine would reduce health care costs.

He also said the fact Kentucky is surrounded by states that have all enacted damage caps and other restrictions makes it harder to recruit doctors to the commonwealth.

But opponents say reducing liability could increase costly medical errors, lowering the quality of care and increasing costs.

Experts say that medical malpractice costs account for such a minuscule amount of the nation’s total health care bill – only 2 percent by some estimates – that reforms have virtually no impact on the bottom line for patients.

While most studies have shown that caps and other medical malpractice changes reduce insurance premiums for doctors, by amounts ranging from 23 percent to 31 percent, researchers at the University of Alabama at Birmingham’s Center for Health Policy have written that “legislators should consider whether they benefit consumers enough to justify limiting recoveries for those most seriously injured by malpractice.”

As Kentucky AARP President Jim Kimbrough said in an interview, “The jury system has worked fine in this country since before the country was even established, so why change it?”

State lawmakers are likely to delay consideration of damage caps until 2018 because approving them would require a constitutional amendment, which couldn’t be put on the ballot until next year, Senate Majority Leader Damon Thayer said. Kentucky’s Constitution says the General Assembly “shall have no power to limit the amount to be recovered for injuries resulting in death, or for injuries to person or property.”

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Instead, lawmakers are likely to consider an array of other measures, including providing confidentiality for hospital staff peer review of doctors – Kentucky is one of only two states that doesn’t protect it – and medical malpractice review panels, which would screen claims against various medical providers, including hospitals.

The plaintiff and defendant would each nominate one doctor, and those doctors would select a third. The panel would hear evidence, then issue an opinion on whether negligence occurred and if it did, whether it caused the patient’s injuries. Regardless of the finding, the plaintiff could still file suit and proceed to trial, but the panel’s finding would be admissible.

Couch, the ER doctor, and other proponents say panels would weed out frivolous suits while accelerating compensation to patients who deserve it.

But peer-reviewed university studies, including one in the Journal of Legal Medicine, have found that screening panels have not reduced the number of claims, litigation costs or malpractice insurance premiums, while they have caused protracted delays.

Nearly two-thirds of the states once required such panels, but the number has dropped below half, University of Delaware law school professor Jean Eggen wrote in a 2013 article. Some were struck down by state high courts while others were abandoned because of the process took too long.

New Albany, Ind., lawyer Pete Palmer, who has represented plaintiffs and defendants in medical malpractice cases and now mostly mediates them, said panels “sound good” but the 180 days in which they are supposed to do their work often stretches to two years – or longer – and that’s before cases go to court.

“You end up litigating twice,” said Valparaiso trial attorney Steven Langer, a past president of the Indiana Trial Lawyers Association, who said he’s had cases before panels for as long as five years.

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AARP’s Kimbrough said that especially for elderly plaintiffs, “justice delayed is justice denied.”

Bills to create medical review panels died in the last three sessions of the General Assembly, and House Democratic leaders foiled most tort reform proposals over the past three decades.

Those efforts reached a crescendo in 2004, when the American Medical Association included Kentucky on a list of 20 states considered to be in a “medical liability crisis” because of an unfavorable medical liability climate and the growing threat of patients losing access to care because of physicians threatening to leave the state.

But that crisis, if it existed, seems to have abated, as medical malpractice claims have abated across the U.S., including in Kentucky, according to the National Practitioners Data Bank, to which all claims must be reported.

Cory Meadows, director of advocacy and legal affairs for the Kentucky Medical Association, said Kentucky doctors still pay higher than average insurance premiums but concedes “you don’t see as wild fluctuations as in the past.”

The AMA no longer tracks the medical liability environment by states, spokesman Robert Mills said in an email.

The amount paid on medical malpractice claims in Kentucky, including cases that were settled, declined $20 million in inflation-adjusted dollars from 2005 to 2015, according to the Data Bank, while the number of claims paid in 2015 declined to 134 from 150 five years earlier.

►READ MORE: Patient loses all but for the blink of an eye

Only 1 percent of 1,667 claims from 2005 to 2015 were for $2 million or more, and only 5 percent were for $1 million to $2 million. Medical and insurance groups note the figures only include claims that were paid, not ones in which doctors prevail, which still cost money to defend.

Large verdicts at trial against doctors and hospitals are even rarer, according to the Kentucky Trial Court Review, which tracks all civil verdicts. There were only five this year and two in 2015. Since 1998, medical providers prevailed in nearly four of every five trials.

In 2014, the Florida Supreme Court struck down that state’s caps in wrongful death cases, saying in a 5-2 vote that the notion of a “bona fide medical malpractice crisis … is dubious and questionable at the very best.”

The court reversed the results in a case in which a 20-year-old woman bled to death following a cesarean section. A jury awarded $750,000 in damages to each of her parents and $500,000 to her newborn son. The damages had been slashed to $1 million total under a state law that limited non-economic damages, like pain and suffering and loss of consortium, to that figure.

The court said the caps “offend the notion of equal justice under the law,” saving a modest amount for the many by imposing devastating costs on the few – those who are most grievously injured.”

Reporter Andrew Wolfson can be reached at (502) 582-7189 or awolfson@courier-journal.com