Medical 'reform' hard to assess

Sun Staff

Gauging the savings in future malpractice costs - the key goal of a reform bill rushed through a special legislative session - is a virtually impossible task, experts say.

MedChi, the state medical society, and the Maryland Hospital Association are scheduled to present their assessment of the legislation at a press conference today.

Gov. Robert L. Ehrlich Jr. has promised that an outside actuary hired by the state will follow with its assessment of the bill, which he has vowed to veto.

But experts warn that aside from a steep cut in malpractice insurance premiums scheduled to take effect this year, a lack of data and varying circumstances make it much more difficult to evaluate provisions designed to rein in future costs through changes in the legal system, insurance regulation and patient safety requirements.

State lawmakers are counting on the long-term reforms to eventually reduce the number of malpractice cases that are filed as well as the amounts paid in settlements and court awards.

In the process they hope to moderate the rising insurance premiums doctors say are threatening their practices.

"It's hard to predict how any particular intervention is likely to stabilize premiums," said William M. Sage, a physician who is also professor of law at Columbia University and who is conducting a study of malpractice reforms.

For example, no one knows precisely how many wrongful death judgments there were in Maryland last year that would have been subject to the lower monetary cap set by the bill.

And there are no precedents on which to base projections of the impact of other provisions, such as an enhanced system to collect data on medical errors.

Cheye Calvo, a policy analyst for the National Conference of State Legislatures in Washington, said lawmakers in different states often ask how much savings in malpractice costs can be generated by particular reforms, but that impact can vary from state to state.

"You're dealing with a unique set of circumstances," he said. "You can't just plug in a new number. It's impossible to predict with any degree of confidence how it will affect future costs."

Part of the difficulty stems from limitations in the data, such as in cases of deaths that resulted from malpractice, Calvo and Sage said.

While the bill would cut in half the maximum that could be paid in non-economic damages from malpractice, Maryland, like most other states, has no public source of data on how much money is paid out annually.

Medical Mutual Insurance Society of Maryland, the doctor-owned insurer that covers most of the state's physicians, has made public data on verdicts and settlements. But that data doesn't distinguish between death cases and others, or show how much of each payout was for non-economic damages that would be subject to the cap.

The state Health Claims Arbitration Office flags death cases, but collects data only on filings, and not on whether they ultimately resulted in a court judgment or settlement or no payment at all.

Payouts in all malpractice cases are reported to the board that assesses discipline against doctors, but its information isn't public. And most payouts result from settlements rather than court verdicts, and settlements generally include confidentiality agreements.

Some states collect more data than others, Calvo said. For example, in Missouri "you're able to look and say, 'had the cap been in existence, these verdicts would have been reduced.'" The bill would expand claims data collection in Maryland.

Sage said there's no complete data comparing premiums in different states - data that could give an indication of how certain types of reforms affect the rates doctors pay. "I've never actually seen statistics about premiums I believe," he said.

Ehrlich has repeated promises to veto the bill because it extends a 2 percent premium tax to health management organizations and because he believes reforms in the legal system don't go far enough. He officially received the bill yesterday, giving him until next Monday to sign it or to follow through on his veto threat.

The governor has commissioned an actuarial analysis, which will "score" the costs and benefits of some provisions of the bill.

"The governor believes the scoring will confirm his view," said Donald J. Hogan Jr., an Ehrlich staff member. And those views, Hogan said, are that the bill is "short on necessary reform, long on tax increases and long on insurance reforms that are not helpful."

Hogan said he expected that the actuaries would project cost impacts for some features of the bill, but would not be able to score some areas, such as changes in collection of medical error data.

At their joint press conference today, the Maryland Hospital Association and MedChi, the professional organization for the state's doctors, are expected to say whether they want the governor to sign the legislation. Their comments will be based on a careful reading of the bill, but not on projections of future cost savings.

"I would be surprised if anyone could do a detailed job assessing the actuarial impact, given the time frame," said T. Michael Preston, executive director of MedChi.

"We're just trying to figure out what we know, what it does, and what our members think," said Nancy Fiedler, senior vice president of the Maryland Hospital Association.

Fiedler said the association distributed the bill to its member hospitals and to lawyers, and would base its comments on the bill's language.

Preston said not every bill can be subjected to detailed and rigorous cost-benefit projections. "Judgments about policy and legislative impact are made all the time on an impression of whether you're making progress," he said.

Some groups have already lined up for and against the Maryland legislation.

The American Insurance Association, a Washington trade group, called the bill's reform provisions "watered-down and ineffective."

In particular, the insurers objected to creation of a people's counsel who would represent consumers when insurance regulators consider malpractice and homeowners' insurance rates.

Other comment was positive.

"The surgical community urges Governor Ehrlich to sign this bill," said Dr. Scott E. Maizel, president of the state chapter of the American College of Surgeons.

"Without a doubt, this bill is a compromise for all concerned. In the final analysis, however, passing it will at least allow physicians to return to caring for their patients, even if it is just for a few more years."

Dennis O'Brien, a Towson attorney who is a spokesman for the Maryland Trial Lawyers Association - a group which said there was no pressing need for legal reform - said he was sorry to see "a cap on widows and orphans" in the bill, but that overall, it was "a good compromise, for the most part."

He said his association wouldn't be making a recommendation to the governor about signing the bill. "He's not going to listen to anything we say anyway," O'Brien said. "The governor was on TV last week calling us 'vultures.'"

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