Bush Calls for Curbs on Medical Malpractice Suits

President Bush called on Congress on Thursday to impose stringent restrictions on medical malpractice lawsuits as a step toward curtailing escalating health-care costs, a key goal in his domestic agenda.

“Excessive jury awards will continue to drive up insurance costs, will put good doctors out of business or run them out of your community,” Bush told health-care professionals and administrators at the University of Scranton.

Before his speech, he visited a hospital affiliated with a medical center in nearby Wilkes-Barre that on Monday settled a $7-million lawsuit stemming from the death of a 72-year-old patient who suffered irreversible brain damage after a breathing tube was improperly inserted.

Under the president’s plan, damages in such cases would be limited to $250,000.

Critics of the proposal argue that a cap on compensation for a patient’s “pain and suffering” would be unfair and allow poor medical practice to go unpunished.

“Our medical liability system is broken,” Bush said, “and therefore a lot of Americans don’t have access to affordable health care.”

He said the increasing cost of malpractice premiums was making it difficult for medical groups to fill vacancies and was forcing doctors to close private practices and retire, join hospital staffs or move to states where costs were lower. In addition, he said that fear of lawsuits was leading to the practice of “defensive medicine,” in which costly tests are run on patients not for medical reasons but to protect a doctor from lawsuits.

Arguing that irrelevant factors were driving up health-care costs, Bush said: “Those unnecessary costs don’t start in the waiting room or the operating room; they’re in the courtroom.... There are too many lawsuits in America, and there are too many lawsuits filed against doctors and hospitals without merit.”

Bush is likely to face a fight in Congress. Last summer, the Republican-led House narrowly approved a plan similar to Bush’s proposal, but the Democratic-controlled Senate never considered it.

This year, Sen. Edward M. Kennedy (D-Mass.) already has threatened to fight the president’s proposal with a filibuster, if necessary. While Republicans hold 51 seats in the 100-member Senate, they need 60 votes to overcome a filibuster.

Kennedy and other Democratic senators said in a letter to Bush that his plan would deprive seriously injured patients fair compensation and do nothing to guarantee that doctors could obtain malpractice insurance at a fair price.

“The real beneficiaries of these proposals would be insurance companies, not patients and not doctors,” they said.

In addition to restricting the amount of money a jury could award a victim or a victim’s family for noneconomic damages, such as a patient’s “pain and suffering,” the president’s proposal would:

Limit punitive damages to unspecified “reasonable” amounts;

Provide the payment of judgments over a period of time, rather than in a lump sum, which Bush argues would make sure the money was available when the patients needed it, but which also would be less of a financial shock to the insurer making the payments;

Limit the length of time in which a lawsuit could be filed;

Reduce the amount a doctor would be required to pay if a plaintiff received other payments from an insurer to compensate for losses;

Make sure that defendants pay the share of judgments that is proportional to their fault.

The $250,000 limit for noneconomic damages would not restrict the amount that could be recovered for economic damages, such as lost income, or for costs of medical care.

The dispute over malpractice insurance hinges on unresolved debates over whether the increased costs are driven by lawsuits or by factors seemingly distant from health care, such as the financial health of insurance companies that invest premiums in stocks and other financial instruments.

It also evokes deep emotions involving the rights of patients and their families when doctors make mistakes that cause grievous damage, as well as anger over what Bush and others have portrayed as “frivolous” suits that tie up the courts.

And it is likely to resound in the political debate of the approaching presidential campaign.

Sen. John Edwards (D-N.C.), who has declared his interest in running for the Democratic presidential nomination, made a fortune as a plaintiff’s lawyer before entering the Senate. Indeed, Bush’s remarks -- while not directed at Edwards -- did not put the senator’s former profession in a kindly light.

In a response that was prepared and made public a day before Bush spoke, Edwards said the president was “once again standing with his insider friends in the insurance industry and standing against seriously injured children and families.”

He added: “The truth is the insurance industry has done poorly in the market and is simply passing those costs on to doctors and patients.”

Another potential challenger to Bush in 2004, Rep. Richard A. Gephardt of Missouri, the former House Democratic leader, called the Bush plan “heartless.”

“If the president is serious about addressing the rising cost of medical malpractice insurance rates, he should focus his efforts on reforming the insurance industry and reining in its control over our health-care system,” Gephardt said.

The administration cites as a model California’s experience since putting a $250,000 limit on noneconomic damages in 1975. Late Thursday, Sen. Dianne Feinstein (D-Calif.) said that after the Martin Luther King Day recess, she would introduce malpractice liability reform legislation based on the California law.

But consumer advocates in California disputed the arguments of Bush and Feinstein in support of caps, and said stable malpractice premiums in the state were the result of regulated insurance premiums passed by voters in 1988 -- not the 1975 caps on jury awards.

An analysis by the Santa Monica-based Foundation for Taxpayer and Consumer Rights found that malpractice premiums in California increased 175% in the 10 years after the award limits were passed. From 1988 to 2000, after insurance laws were changed, malpractice premiums in the state dropped 8%, compared with an average 25% increase nationally.

“Strong insurance regulation, not arbitrary caps on injured patients’ recovery, is the only way to bring medical malpractice insurance rates down,” said Douglas Heller, senior consumer advocate for the foundation.

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Times staff writers Vicki Kemper and Richard Simon in Washington contributed to this report.