"It's going to totally affect doctors," says Baton Rouge orthopedist Dr. Jimmy Lalonde. "It's going to hurt them."
By a 3-2 margin, the appeals court agreed with the plaintiffs' argument that the original $500,000 cap set by the 1975 Legislature to control malpractice premiums had to go since it failed to meet the constitutional standard of "adequate remedy" for victims of medical malpractice. The reason it failed to meet the standard, according to the court's majority opinion, is because inflation has whittled the present value of the cap down to $160,000 and possibly even less. In Louisiana, non-economic damages refer to lost wages as well as pain and suffering. The state has no cap on future medical costs for malpractice victims.
Physicians and others appalled at the Third Circuit's ruling say that without the cap, trial attorneys smelling the potential for even bigger payoffs will be emboldened to file more lawsuits than ever before, and jury awards could go over the top. The resulting pressure on insurers to raise premiums should alarm ordinary Louisianans, they say, since doctors won't want to practice here. They also claim access to health care ' especially in "high risk" specialties like obstetrics and trauma medicine ' will suffer as a result.
Or not. Oliver Schrumpf, the Shreveport trial lawyer who convinced three of five Third Circuit judges that the cap was unconstitutional, disagrees that doing away with it automatically means soaring insurance premiums and a physician exodus. "That's an assumption," he says. "It's an argument used by the insurance industry. The system works. It'll work better if there aren't any caps."
Schrumpf believes juries have the power to lower damage awards if they think they're too high. Also, Louisiana's medical review panels ' which examine malpractice claims for validity before they're allowed to go to court ' favor doctors since the panels themselves are made up of physicians.
Joan Burmaster, legal counsel for the Louisiana Medical Malpractice Insurance Co., the largest malpractice insurer in the state, doesn't see it that way. Neither does the Louisiana State Medical Society, which represents doctors. "Of course we're disappointed by the decision," Burmaster says. "We're concerned the effect is going to reduce access to health care."
With so many physicians and nurses having left the state since Katrina and Rita, Louisiana doesn't need more excuses for those remaining to leave, Burmaster says. She hopes the Louisiana Supreme Court will reverse the Third Circuit ruling and re-establish the cap. As for the issue of the cap being adjusted upward to compensate for inflation, Burmaster points out that future medical expenses have no cap ' something nobody talks about.
"Medical expenses of a patient injured by medical malpractice are compensated as long as the patient needs them," she says. "That's a tremendous benefit that doesn't get mentioned."
Lalonde, while opposed to removing the cap, says the inflation issue has merit.
"There is a reasonable argument there," he says. "It's what some of the states have done. That is a compromise that should be worked out."
Shreveport physician Jeff White says a cap on damages is critical for access to health care in Louisiana. The state's doctors ' especially in high-risk specialties ' are already "paying all we can ask them to pay." But White believes the time has come to raise the cap to some degree.
The issue of whether caps really have any effect on malpractice premiums continues to be hotly debated around the country. Burmaster points to Texas as proof that caps work. That state, in response to rapidly rising malpractice premiums, in 2003 implemented a $250,000 cap on non-economic damages.
Since then, premiums in Texas have plunged dramatically ' by 30 percent, according to some accounts. This would seem to give plenty of ammunition to proponents of capping damages, though critics argue that coincidence doesn't necessarily indicate correlation, saying falling premiums in Texas have more to do with timing and market forces than with caps.
The Texas cap was in response to what the American Medical Association termed a malpractice "crisis" taking place there and in several other states. Between 1999 and 2002 in the Lone Star state, malpractice premiums rose 135 percent. However, a March 2005 study from the University of Texas at Austin School of Law found big spikes in premiums were not caused by rising payouts on malpractice claims or rising jury verdicts. Instead, in terms of the number of claims filed and damages paid out, the Texas tort system between 1988 and 2002 was remarkably stable.
An August 2003 report from the U.S. General Accounting Office concluded that, based on the limited data available, states with caps on damages for pain and suffering experienced slower growth on average than states with lesser reforms. At the same time, the GAO couldn't determine how much the variation in claim payments and premiums was attributable to damage caps versus other types of tort reform, or state laws regulating the premiums rate-setting process. The GAO identified another potential factor: market forces, including the "level of market competition among insurers and interest rates that affect insurers' investment returns."
Whoever's closer to being right, both sides in the debate have plenty of studies and statistics to back up their arguments, which tends to muddy the water tremendously. It breaks down roughly along these lines: plaintiffs' lawyers and consumer advocates on one side; physicians, hospitals and insurers on the other.
What is certain is that Louisiana's malpractice argument isn't over. Until the final decision is made, the $500,000 limit remains part of a law that requires a state board to review medical malpractice claims before lawsuits based on those claims can be brought to court. In that system, doctors participating in a Patient Compensation Fund are responsible for paying the first $100,000 of a malpractice judgment; the fund covers the remaining $400,000.
The case is likely headed for the state Supreme Court, which can uphold the Third Circuit ruling, reverse it or refuse to hear the case altogether. If the higher court upholds the Third Circuit's decision, it may be just a matter of time before the Legislature comes up with another cap on damages and the whole battle starts over again. The Illinois Supreme Court has twice ruled caps unconstitutional and is preparing to grapple with the question a third time.
"The [Louisiana] Legislature can adopt a new one," Schrumpf says.
This story originally appeared in Baton Rouge's Business Report.
New menu items ready for the Lenten season
The Cane Fire Film Series screens “MaidenTrip” on Monday, March 10, at the AcA.
Acadiana's nightlife guide.
The vibe of the tribe done modern
The Louisiana Workforce Commission said Friday that initial claims rose to 2,125 from the previous week's total of 1,964. There were 2,887 initial claims during the comparable week in 2013.
The Board of Elementary and Secondary Education has stalled action on a $3.5 billion annual school funding formula due to state lawmakers by March 15.
The New Orleans Saints have yet to make it official as of this writing, but popular wide receiver Lance Moore has reportedly been cut by the team to free up salary-cap space on the roster.
While two medical marijuana bills are slated for the upcoming legislative session, what some Louisianans might not know is that the plant was approved for therapeutic use by state lawmakers in 1991.
The agenda is shaping up to be lighter than in previous years. But Jindal is term-limited, with fewer than two years remaining in office, and he saw his last big initiative — a proposed rewrite of Louisiana tax law — collapse without getting a vote in 2013.
Sharper has been held without bail because of an arrest warrant issued by Louisiana authorities accusing him and another man of raping two women.
Here's your daily look at late-breaking national and international news, upcoming events and the stories that will be talked about Friday, March 07, 2014:
Two Lafayette men have been revealed by police as the infamous duo behind a caper that shook our fair city to its core.
She’s the daughter of the legendary Johnny Cash, but she’s been a gifted artist in her own right for three decades, and she’s coming to Lafayette.
The Lafayette Parish School Board has received a second letter of demand related to last year’s insurance debacle, this time from Key Benefit Administrators claiming it’s owed $93,000 from the school system.
Acadiana's nightlife guide.
The Louisiana coastline is vanishing faster than mappers can keep track.
A bill that would have overridden local ordinances prohibiting public and private employers from discriminating against lesbian, gay and transgender people has been pulled within less than a week of being filed.
The panel that selects nominees for a controversial New Orleans area flood control board — a board that is suing more than 90 oil, gas and pipeline companies — is set to discuss legislation affecting its independence.
State prison officials cannot keep secret the seller and manufacturer of the two drugs purchased for executions at the Louisiana State Penitentiary, a federal judge ruled Wednesday.
State lawmakers will not appeal a judge's ruling that it was improper to use $3.7 million from a probation and parole officers' retirement fund to balance the state's operating budget.
Prepare yourselves for sun
Acadiana's nightlife guide.
Conservatives have been losing their minds over this satirical bit on the Colbert Report.
Due to the chaos of Mardi Gras and the weather, the entry deadline for this year's INDesign Awards has been extended by one week.
The Lafayette Parish School Board leaves a lot to be desired, but is scrapping the election process in favor of an appointed board the answer?
Queen Evangline and King Gabriel ruled Tuesday night
The House approved legislation Tuesday night to roll back a recently enacted overhaul of the federal flood insurance program, after homeowners in flood-prone areas complained about sharp premium increases.
IND Style does Gabriel
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The NFL has formally designated New Orleans' Jimmy Graham as a tight end for the purposes of his franchise tag value, which is now set at $7.05 million next season unless Graham and the Saints subsequently agree on a long-term deal.