Capping the election damages

As an electorate, we made some bone-headed decisions Tuesday. Any consolation for Oregon ending up the right color at the end of the night was eroded by the statewide ballot measure returns.

The shame of the successes of Measures 36 and 37 is only surpassed by the devastating long-term consequences each amendment will have on the future of Oregon. The myopic avarice of 37 and the bigoted prejudice of 36 stand in contrast to the progressive mindset on which Oregon prides itself.

But things could have been significantly worse.

When I found out late that night that Measure 35, which would place an arbitrary cap on malpractice settlements, was winning, I threw my hands up in disgust. Along with Measure 37, it had the greatest potential to hurt those among us least able to afford it. Thankfully, the measure ended up losing. Let’s look at the bullet we may have just dodged.

The Yes on 35 argument went like this: First, prohibitive malpractice insurance costs are driving doctors out of Oregon, thereby decreasing access to care. Second, the skyrocketing costs of health care are largely due to nefarious trial lawyers and their “frivolous” lawsuits. Third, placing a cap on “non-economic” damages will lower insurance premiums, and thus health-care costs.

According to the Eugene Register-Guard, Public Citizen found that the number of doctors in rural Oregon actually rose by 11.9 percent between 2000 and 2004, thanks in part to the high percentage of rural patients on the Oregon Health Plan. To offset this somewhat, the State offers SAIF fund relief to insurance companies who insure at lower rates.

In a report for the Oregon AFL-CIO COPE Board, Elizabeth Engberg, research coordinator for the SEIU, shows that the three main cost-drivers of malpractice insurance are frequency, and size, of claims, and income earned by the insurance companies. She cites a study by the Harvard Medical Practice showing that only 25 percent of malpractice suits go to trial. Of these, nine of 10 are decided without a jury. Only 10 percent of the remaining claims, less than three in 1000, are settled by a jury in favor of the patient.

Caps also seem to have no effect on the frequency of claims. Despite a $500,000 cap, Louisiana still has twice the number of claims the national average would suggest. Engberg concludes, “[T]here is no state-by-state data to correlate a cap on damages with…a resulting reduction in malpractice premium costs.”

In reality, of every $100 spent on health care, only 40 cents go to malpractice costs. Hospital care and doctor pay add up to $51, and prescription drugs tack on another $10.

The presence of actual human error is unavoidable. In 1999, the Institute of Medicine published a report estimating that 44,000 deaths per year were the result of correctable human error — at a cost of $17-29 billion annually. Primarily, however, it’s a question of insurance reform. There is nothing to force insurance companies to lower their premiums — certainly award caps offer little incentive. We’d have a lot better idea what was going on if the insurance companies were forced to reveal the data they use to adjust premium rates.

Finally, we’ve got to think about what “noneconomic damages” are. “Economic damages” primarily have to do with lost earnings. Because of this, awards won by minors, homemakers, and retirees fall largely within the category of “non-economic damages.” If your treatment is paid by Medicaid or Medicare, non-economic damages are the only ones you’ll receive.

It would have been a travesty to leave our fellow Oregonians with arbitrarily limited legal recourse in so vital a situation.

Riggs Fulmer can be reached at [email protected]