Health Care Plan Skirts Malpractice Issues : Medicine: Clinton’s proposals address few legal concerns. Doctors want to see caps on damage claims, but trial lawyers say the system works fine as it is.

Ronda Scribner, a school librarian from Oklahoma, was recovering from a hysterectomy in a Tulsa hospital when an orderly made a careless mistake.

Without checking her wrist tag, he awoke her and wheeled her to the lab for an ultrasound test. In fact, the patient in the next bed was scheduled to be tested.

Scribner was hooked up to the machine before a technician discovered the error. Angry and in pain, she was taken back to her bed. A week later, she needed further surgery to repair ruptured sutures, a complication that she blamed on the mistaken trip to the lab.

But she and her attorneys won a measure of revenge. They sued the Hillcrest Medical Center and urged the jurors to “send a message” to “rich” hospital administrators who take a “lackadaisical attitude” toward their patients.

The verdict did just that: $100,000 in actual damages for Scribner’s pain and suffering, and $10 million in punitive damages.

In March, the Oklahoma courts upheld the verdict but reduced the total by $5 million.

The judgment in the Scribner case, which is expected to be upheld by the U.S. Supreme Court next week, illustrates how a major cost to the American medical system will go largely unaffected by President Clinton’s health care reform proposal.

While the Administration’s plan seeks broad changes in the nation’s medical system overall, it makes relatively few modifications in the legal aspects of the system as it affects doctors, hospitals, medical labs, insurers and drug manufacturers.

“We are sort of disappointed,” said Dr. Robert McAfee, a surgeon from Portland, Me., and president-elect of the American Medical Assn.

“In our meetings with the First Lady and with Mr. (Ira) Magaziner, we had been promised real, substantive change. But we haven’t seen anything yet. The things they are talking about are not big-ticket items,” McAfee said.

For years, groups representing the medical Establishment have urged Congress and the Supreme Court unsuccessfully to put financial limits on jury awards against all parts of the health care business, from makers of new vaccines and medical devices to doctors who deliver babies.

Some states have set some limits of their own. California, for example, limits damages for “pain and suffering” to $250,000 in medical malpractice cases. But in most states, health care providers remain vulnerable to huge liability verdicts.

A recent survey by Lewin-VHI, a medical consulting firm, estimated that doctors and hospitals pay premiums of $11.2 billion per year to shield themselves from malpractice claims. In addition, the survey said, doctors spend an estimated $20 billion a year or more on unnecessary tests and procedures to protect themselves from lawsuits.

Most lawyers for health care providers have applauded Clinton’s proposals to limit medical malpractice lawsuits as a “reasonable beginning,” although they hope Congress will go much further.

The draft of Clinton’s health care bill proposes several changes in the law. They include:

* Abolishing double recoveries in malpractice cases. In most states, injured persons can win damage verdicts to pay for their medical costs, even if those costs already have been paid through insurance or workers’ compensation. This practice dates back to a time when few people had insurance coverage.

* Requiring a medical specialist to certify that a physician erred before allowing a malpractice claim to go forward. This could eliminate frivolous or unwarranted lawsuits, its proponents say.

* Requiring that disputes be heard by arbitrators first. This could eliminate costly trials, although the Clinton proposal would permit a dissatisfied party to go to court afterward.

* Limiting attorney fees to 33%. In some complicated and long-running cases, the lawyers for the injured plaintiff demand 50% of the final award.

* Creating a national data bank to track malpractice claims and spot doctors who are repeat offenders. This could help licensing boards to take action against incompetent physicians.

While none of these proposals would dramatically lower costs for the health care industry, officials of medical groups say they are pleased that the federal government will seek some changes. In the past, leaders on Capitol Hill have said that it was up to the states to change their liability laws.

“We’re really quite heartened that President Clinton saw the need to do something about medical liability. That’s a breakthrough in itself,” said Kenneth Heland, associate director of the American College of Obstetricians and Gynecologists.

But most officials also say that Clinton and Congress should tackle the issue of big damage claims. They favor three proposals:

* A limit on damage awards for “pain and suffering.” Everyone agrees that injured people should be fully compensated for actual costs of their injuries, but the health care providers favor a California-style limit on jury verdicts for “non-economic damages.”

* Shielding manufacturers of new drugs or medical devices from liability damages if their products were approved by the federal Food and Drug Administration. The RAND Corp. think tank in Santa Monica has endorsed this proposal in issuing a major study of the liability system in cases involving pharmaceuticals and medical devices.

* New limits on punitive damages, possibly by tying the amount to the actual damages. In the federal antitrust laws, for example, Congress specified that the damages would be three times the amount of actual or proven damage.

Currently, juries in most states are given wide discretion to select an amount for punitive damages, often after considering the assets of the person or company being sued.

In the Scribner case, the patient had $2,716 in actual costs, the bill for her hospital visit to repair a hernia after the sutures ruptured. But her attorney, W.C. (Bill) Sellers Jr., urged jurors to consider the value of the entire medical center--an estimated $110 million--in setting punitive damages.

Even though the jury verdict was reduced by $5 million, the punitive damages are still 1,840 times greater than the patient’s actual expenses, the hospital said in its appeal to the Supreme Court.

Corporate lawyers say that punitive damages operate like a lottery, allowing a few plaintiffs to recover huge awards. The threat of a possible punitive verdict also forces many companies to agree to big settlements, they say.

Consumer advocates and trial lawyers counter that punitive damages are needed to deter big companies from wanton wrongdoing.

They also say that the liability system is not broken and does not need to be fixed and that malpractice costs make up only a small part of total health care spending.

“There isn’t any relationship between the cost of health care and medical malpractice costs, so we don’t understand why this is even being discussed,” said Washington attorney Barry Nace, president of the Assn. of Trial Lawyers of America.

Sellers, an attorney from Sapulpa, Okla., said that hospitals and doctors should be forced to pay damages when they ignore the welfare of their patients.

“We’re not animals in a veterinary clinic. We’re people,” he told jurors in his closing argument.

With accumulated interest, the Scribner case will cost the Hillcrest Medical Center more than $8 million, Sellers said.