Legal Reforms Ease Costs for Malpractice

States such as California that have instituted reforms in response to soaring medical malpractice costs have helped alleviate--although not eliminate--the malpractice crisis, according to a new General Accounting Office study of six states released Monday.

The report said that, although insurance costs and claims have continued to rise across the nation, they increased more slowly in some states where reforms have been enacted. The reform measures often include limits on both attorneys fees and awards for non-economic losses, or so-called “pain and suffering.”

California’s 1975 legislation, for example, “has helped moderate increases in the cost of malpractice insurance and in the size of . . . awards,” the report said. Further, the fact that the law has survived several constitutional challenges will ensure that it has a “greater effect in the future,” according to the report, the third of five planned by the congressional watchdog agency to examine the medical malpractice situation.

‘No Easy Answer’

Rep. John Edward Porter (R-Ill.), who released the report, and Richard Fogel, assistant comptroller general, said at a press conference that the reforms--which are opposed by many lawyers--are not sufficient to solve the rising cost of malpractice premiums for physicians.

“The bottom line is there is no easy answer, or fix, to the malpractice insurance problem,” Fogel said. “Changing the tort system alone is not the answer (although) it will certainly help.”

The report suggested that other areas for reforms be considered, among them “changing the way public bodies and peer groups regulate health care providers,” finding more effective ways to regulate the insurance industry and “developing realistic consumer expectations about the health care delivery system.”

While the agency made no recommendations, Fogel praised such measures as shortening the statute of limitations for filing malpractice suits, reimbursing defendants who are the victims of frivolous suits, allowing large awards to be paid in installments instead of in a lump sum and limiting the liability of defendants who played a small role in the actual malpractice injury.

‘Fairly Good Model’

Fogel said that the California law is a “fairly good model” to study because “they started earlier--they enacted more tort reforms in response to the crisis in the ‘70s. We’ve had more time to see what’s happened in California.”

The California law, among other things, established a contingency fee schedule for attorneys’ fees, imposed a $250,000 limit on the amount recoverable for “pain and suffering” and imposed stricter limits on the time period in which claims could be filed after the discovery of a problem.

The GAO report cited a May, 1985, California Medical Assn. study that estimated savings in malpractice claim costs ranging from 8% in 1976 to 49% in 1985.

The other states studied were North Carolina, Indiana, Arkansas, Florida and New York.